Natural Resources Committee on April 9th, 2019

[Nick Whalen, Liberal, St. John's East, NL]

Thank you very much.

[The Chair, Liberal, James Maloney]

Ms. Stubbs.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thanks to all our witnesses for being here.

This last part of the conversation I think is also attached to similar concerns. We've all heard repeatedly about sufficient capacity and resourcing, even for participation in the regulatory review process. Certainly, indigenous communities engaging with companies and resource proponents for development is clearly a long-standing challenge, which obviously governments of all stripes will have to contend with. They are a key part in continuing to improve indigenous consultation on major resources projects, about which I know we are all concerned.

Mr. Ross, I have a couple of questions related to some of the comments you made in your presentation. You talked about the importance of empowering individual first nations through ensuring they have information to make informed decisions about resource proposals, and the priority to reduce poverty and increase jobs for indigenous communities.

You touched on something that I think Canadians are hearing more and more about, related to this potential disagreement between elected leaders of indigenous communities and other forms of leadership, such as hereditary leaders.

Mayor John Helin of the Lax Kw'alaams Band was here at committee on February 5. He talked about the other point you made, how the foreign-funded, anti-energy activists were undermining the economic ambitions of first nations who want to develop their own resources. In his case, they came into the community and sowed division among community members and band leadership. They were claiming and posing publicly as hereditary leaders, in opposition to proposed LNG developments that the elected leadership supported.

The chiefs' council of the Lax Kw'alaams put out a letter that said, they “[do] not sanction inviting professional protesters from non-governmental organizations, and non Lax Kw'alaams First Nations members into their traditional lands in breach of ancient tribal protocols. [...] The unauthorized action by this renegade group has created needless confusion, damages tribal unity, and is insulting to tribal members.”

In the context of best practices for indigenous engagement, I think there are many Canadians, and maybe even elected people, who question whether or not this is happening and is actually a thing. However, we've heard about it repeatedly from indigenous leaders.

Do you have any suggestions on how a government could effectively go about sorting out the various leadership structures and figure out who's actually speaking on the will of the communities?

Also, do you have any views on how it impacts first nations communities when governments impose policies and laws that were explicitly requested by foreign-funded activists, for example, the oil shipping tanker ban, Bill C-48, against the preferences of the locally impacted communities?

[Ellis Ross]

Okay, that's two questions.

I don't think government can do anything in terms of elected versus hereditary. Every community is going to have to figure that out for itself, because every community has evolved to a certain extent in terms of their leadership. Some have gone entirely towards elected leadership. Some have stayed with their hereditary. Some have actually created some sort of parallel co-operative process for that.

Even aboriginal people don't understand the difference between elected leadership versus hereditary. I've been to communities where members were questioning me on what I was doing. They didn't even understand the fundamentals of the Indian Act. They didn't understand that band councils just did not have authority to spend money that came from Ottawa. This speaks to the ignorance and apathy that band members have.

In amongst this confusion there's always an opposition group that will not support council no matter what. It doesn't matter what you do. You could have signed the best agreement in the world, they are still going to oppose it. I will give you an example. In the last LNG vote I had in my community, after very many votes our last LNG agreement came in at 92%, the highest rate we ever had....

By the way, if you want to see how out of control this can get, I suggest you find a court case that came out six or seven years ago called Wilson v. Switlo. That was my band. It tore our community apart. When you read the evidence in that you will not believe some of the things that happened and some of the things that were stated in my community. One of them was a letter saying that this person from the United States was actually mandated to bring 200 Gurkha soldiers into my little village to keep the peace. This is what we were trying to deal with. We can see this spreading across B.C. if not Canada because these foreign influence people come, they find the division point and they build on that. They have no interest in the community or the members themselves. I don't think government really has a part to play in it.

By the way, before I get to your second part, in terms of capital, I think there's a way for the federal and provincial governments to get involved with capital, not directly with money but actually think about an accommodation of the rights and title and say we can accommodate your capital needs through a loan guarantee as long as we know that the risk is so low that neither party is going to lose out. The business plan is there. In my accommodation to the first nations people as a fiduciary as well as the Crown, I'll give up a loan guarantee. That can solve a lot of problems with investors who are worried about investing with first nations.

I forget the second part of your question.

[Shannon Stubbs, Conservative, Lakeland, AB]

It was on the impact on first nations' ability to pursue their own economic development opportunities when a government imposes legislation requested specifically by foreign-funded activists, like the oil shipping tanker ban in Bill C-48.

[Ellis Ross]

When I talk about what happened in Kitimat here, we're really talking about what happened in the last 12 years. That's a really short, condensed time frame to change the mentality and approach of first nations towards major project development. We've evolved. We've evolved so quickly. The new leaders coming up are more educated. They can read. They can write. They've been to business school. They're seeing the world in a different light.

Now that we've caught up with the rest of B.C. and Canada, B.C. and Canada seem to be going the opposite way. Members of first nations are now saying, “I'm getting very good benefits from this project. I'm getting a job. I'm getting revenues. I'm getting training. Now, what can I do next?”

A lot of first nations in northwest B.C. see the export of energy as the next big step. In fact, there's a group down in the Lower Mainland that's actually negotiating equity in the Kinder Morgan project. The Nisga'a Treaty, the northwest treaty in my region...they don't want to see that tanker ban. Lax Kw'alaams were out long ago thinking they didn't want to see the tanker ban. They see that as the next step.

The evolvement has happened so quickly. I think these first nations leaders are expecting more from their governments in terms of what kind of policy and legislation is coming down that affects their economic development dreams.

[The Chair, Liberal, James Maloney]

I'm going to have to stop you there.

Mr. Cannings.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you all for being here today.

I'm going to start with Mr. Sullivan and the Gwich'in.

You touched on the Mackenzie Valley pipeline history and you mentioned that it was a failed project, or at least it never came to pass.

I wonder if you could comment on the evolution of best practices with regard to indigenous engagement in these projects. The Mackenzie Valley pipeline process was—and I think still is—seen as revolutionary in its time for the amount of engagement: going to every community, having hearings in the indigenous languages in each community. The outcome was not that it shouldn't proceed, but it was a 10-year moratorium to let the land claims agreements proceed.

Could you elaborate on something that you went through very quickly? In the nineties there was a new process. We started with an old process—big foreign international companies—and then in the nineties there was something else.

I'll give you some time to talk about where you see that things should go in the future.

[Grant Sullivan]

While the Mackenzie gas project did fail in the end—it didn't come to fruition—a lot of different factors played a role.

That being said, the Gwich'in gained a lot of capacity. When you look at the Inuvik wind project, for example, the Government of Northwest Territories put out two tenders to develop the feasibility work. The Neets'aii were in a position to bid on that work because of our past experience with that process. Part of that bidding process, the feasibility study, also included community engagement. We are now leading the way in that for the government, as opposed to it coming in from us. We learned some very valuable lessons there in how things should be done and could be done.

What we've learned through that process, though, is a saying: “If you've been to one indigenous community, you've been to one indigenous community, and that's it.” What it really comes down to is spending time, money and effort in those communities, to listen to the people, hear what they're saying and learn how to respond to them—fundamentally, what they want to see out of it.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

To pick up from that in terms of each community being different and unique—something that I think Mr. Whelan touched on as well—you have differences of opinion between communities on one project. This can happen, as we've seen, when you have linear projects like oil pipelines. Communities that are perhaps closer to the jobs in the oil patch would see the benefits, and communities on the coast would see the disadvantages.

It's perhaps the opposite for gas, where you have lots of job opportunities on the coast and a lot of the ecological problems happening more in the interior.

I'm thinking of the Gwich'in and Old Crow. I've spent a bit of time in Old Crow, and I know the history and the importance to them of the caribou migration. Here you have the caribou that move from one part of the world to another, and you have the Gwich'in people in the Yukon, as I understand it, opposing the opening of the Arctic National Wildlife Refuge to oil and gas exploration. The indigenous people in Alaska have come out in favour of it. They see the benefits to them, I assume.

Can you comment on how to come to a decision when you have these opposing views of a single project?

[Grant Sullivan]

Using the Mackenzie Valley gas project as the example, to the north of the Gwich'in are the Inuvialuit. They would have received the majority of the jobs.

To address that, we went back and looked at the equity position. In my comments, there was the allotment of the 33%. While the majority of the jobs would be happening north of us, there would still be long-term benefits derived from the pipeline itself. That's fundamentally what we want to get to. It's not just about the immediate jobs procurement that happen in the rush; it's about the long-term development of these projects.

That's what we really want to see; that's what our communities want to see. I'm sure when you were in Inuvik it was probably booming, but currently.... It goes up and down. What we want to see is that nice, consistent, long-term revenue stream coming into us, so that those jobs are there and we can develop the capacity we need to develop.

That's the approach that we want to get to.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

What is the situation with the caribou in Old Crow?

[Grant Sullivan]

For the situation with the caribou, it's not all indigenous. The Gwich'in nation as a whole have opposed the development of the drilling in ANWR, but there are different indigenous groups within Alaska that have that view as well. That being said, too, for the Mackenzie gas project, we would be one of the proponents in that project, and we can then help shape how that project is being developed and those critical areas that need to be protected.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Right.

You mentioned the wind projects and solar. We've talked a lot in this committee about getting northern and remote communities off diesel. How far along that path would those projects bring Inuvik?

[Grant Sullivan]

Right now we're looking at doing the two commercial properties.

Inuvik is a small microgrid. It's only about 3.4 megawatts. It's not a huge community; there are only 3,200 people. That being said, how much greenhouse gas we emit per capita far exceeds the rest of Canada because all our electric generation is based on fossil fuels. The wind project, for example, was looking at reducing the total diesel consumption by 80% in the community. That's significantly huge. With the solar projects, we're looking at saving roughly 25% of the commercial buildings' annual consumption. They are significant numbers for a community that pays 76¢ per kilowatt.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

[The Chair, Liberal, James Maloney]

Mr. Hehr.

[Kent Hehr, Liberal, Calgary Centre, AB]

I'd like to thank the witnesses for coming and for this very compelling testimony. It has sparked my interest in numerous areas, but in particular I'd like to start with Mr. Ross.

Mr. Ross, you started out by saying how you saw agreements being interpreted by the courts—from Haida on down the line to where we are now—through a section 35 lens. You're trying to understand how free, prior and informed consent under UNDRIP fits in. I tend to see the issue a little more like you do—that these agreements and the duty to consult and accommodate will be looked at more through the section 35 lens.

I note the language of the more recent cases and how the courts are telling us to grapple with issues that come up from indigenous peoples in their negotiations on what an energy project would look like.

Did LNG Canada, in your view, take suggestions from the community, then change its plans and move forward? What did that look like? You said it's successful in your view, but were there instances where it had to go back and forth a number of times?

[Ellis Ross]

Oh yes, definitely. The difference in what LNG Canada did versus the projects before them was that even before they went through the environmental assessment process to apply for a certificate, they came to us. They talked to us. We laid out our concerns at a very high level, because that's what an environmental assessment does. They incorporated that into the environmental assessment process in their application.

When we got word back from the B.C. government asking us if we had any concerns about the application, we told them that it's already there, so let's get to the next step. After that, they'd do it under the permits they needed to explore their issues on the ground for the environmental assessment certificate. They came to us.

This is the value of a protocol with the proponent as well as a separate protocol with the government. Instead of just waiting for that permit to come through to our office to inform a referral, we'd always have our interests already addressed in the application itself. It saved a lot of time.

I know that companies spend a lot of time and money doing this, and I know the provincial government did the same thing, but it sure got us to the finish line a lot quicker. We were actually the main first nation to deal with. We had the shipping, the terminal and the pipeline all in our territory. Everybody else just had the pipeline or the shipping. Even the shipping was big.

I want to add something. In terms of the process with LNG Canada, it wasn't all left up to government, in our case. In some cases, it was up to us—the first nation—to reach out to other first nations that opposed the project and were only looking for benefits. We included them in our benefits under the umbrella of the IBA we signed, if they would actually sign on and support the project. This is a hands-on approach that has to be taken.

I know the Crown has the duty to consult and accommodate at the end of the day, but there are a number of different protocols that can help these projects along, in terms of best practices.

[Kent Hehr, Liberal, Calgary Centre, AB]

Your recommendation is early engagement: before you draft your plans, consult with the indigenous groups and that will guide the process going forward.

[Ellis Ross]

That is correct, without a doubt. The only way this works is if the first nations leadership in question has constant communication with their own membership. I know you can't legislate that. I know you can't put it into a policy, but it's a question I ask all the time when first nations people ask me about how to address this. I ask them, “What is your communication plan to membership? Is it in person, email or Facebook?” Some these issues are confidential. That matters a lot.

[Kent Hehr, Liberal, Calgary Centre, AB]

Okay.

My question for Mr. Sullivan is on some of these smaller projects. I can see how capital can be raised with a large project, say a pipeline, or something to that effect, because it has long-term benefits. For some of these smaller projects, is it more difficult to raise capital? What practices should governments or indigenous bands look towards, in doing any recommendations?

[Grant Sullivan]

Raising the capital isn't the problem. The business case for the wind project is fantastic. It's a good, solid business case. It's the way the system is set up as the territorial governments administer it. There isn't an opportunity for us to even be at the table with them and have those discussions.

In the ideal world, the solution would be a territorial government, the federal government and the first nations working together on these small projects. It's not a small project for Inuvik. It's $40 million coming into Inuvik. That's a lot of jobs for us. The capital is not the problem, but then the GNWT is cutting us out, saying, “Well, we'll offer you a debt-financing package at the same rate we're allowed to get, which is basically 3%.” There are not many first nations out there with a balance sheet strong enough to support a 3% debt-financing position.

[Kent Hehr, Liberal, Calgary Centre, AB]

Given that, government should be more flexible in possibly working with them on debt financing directly to the first nation. Would you not say that's probably the ticket?

[Grant Sullivan]

Yes.