By:Hina Farooqi

In 2016, Canada officially adopted the United Nations Declaration on the Rights of Indigenous People.  One of the declaration’s principles states that signatories affirm that Indigenous control over developments affecting Indigenous lands and resources will strengthen their institutions. Each element of the declaration contributes to the overall goal of the reestablishment of the nation-to-nation relationship that has been eroded through Canada’s history.

One of the ways Canada seems to be seeking to meet this goal is through programs that encourage Indigenous ownership of energy production projects. Recently, Lumos Clean Energy (Lumos), published the results of a review of their database of energy projects. Lumos president, Chris Henderson, hopes that by partnering with Indigenous communities, Canada can begin to “walk to talk of reconciliation”.

The review found that Indigenous participation in the energy economy has risen rapidly over the past two decades. Indigenous participation in 152 medium-large scale renewable energy projects were in operation as of October 2017. Lumos defined participation as including ownership, partnership, royalty agreements, and lease agreements. Projects with limited benefits were excluded. The review also found that the generating capacity of projects with Indigenous partnerships represents nearly one-fifth of overall “green” energy production.

In a report by CBC, the regional chief of Manitoba, Kevin Hart, summarizes the intuitive connection between renewable energy and First Nations: “Through our teachings we've always been taught to be stewards of the land. First Nations people can be champions when it comes to clean and alternative energy moving forward."

Next Steps to Improving Partnerships

The average put forward by Lumos is for Indigenous partners to hold approximately 25% ownership. However, there is a range when it comes to how much benefit and ownership Indigenous partners maintain. For example, Dokis First Nation owns a 40% share of the Okikendawt Hydro project. The project brings in up to 4 million dollars in revenue annually. Since the Quebec government has committed to buying the hydro for 40 years, the nation is estimated make millions of dollars in profit. The former chief of Dokis First Nation, Denise Restoule, comments, “You feel now that you're not restricted to try to run a First Nation on just the funding from the federal government, which is never sufficient."

In contrast, for some other projects, Indigenous benefits are structured as one-time payments or Impact Benefit Agreements (IBA). For members of Batchewana Nation, an IBA was never an option when it came to the Bow Lake Wind Farm, with members asserting that if their territory is going to be used, it is important for them to be stakeholders.[1] An important next step to ensure fair relationships with First Nations is to strive for more equity in negotiation, ownership, and benefit distribution.

Another way to improve Indigenous benefits for these project is to strengthen on-going employment. Lumos estimates that construction-stage employment totals 15,000 Indigenous people employed. On-going employment is much more modest. Lumos estimates that 300 Indigenous people are currently employed in co-owned or investment facilities.  The key to raising this number is training and apprenticeship programs. Lumos predicts the number of Indigenous people employed in clean energy facilities will rise to 400 within 8 years because of training programs.

The Importance of Government Supports

The rise of Indigenous ownership in the energy industry can partially be attributed to government incentives. For example, the Alberta Indigenous Green Energy Development Program provides funding for communities to acquire an ownership stake in the renewable energy sector. In Ontario, the Green Energy Act of 2009 brought in a Feed-in-Tariff (FIT) program. The FIT program is open to a variety of participants including First Nations, who apply for a contract to generate renewable energy, and sell it to the province at a guaranteed price for a fixed term. Ontario also introduced the Aboriginal Adder incentive that provided an extra 1.5 cents per KWh for projects with greater than 50% Aboriginal participation. However, in a December 2016 directive, the Energy Minister announced that 2016 will be the final FIT application period. This leaves the future growth of Indigenous owned projects uncertain in Ontario.

In summary, Indigenous ownership in the energy sector has the potential to contribute to the reestablishment of a nation-to-nation relationship with First Nations. To stimulate these partnerships, government programs that provide funding for Aboriginal communities and incentives for energy companies to partner with these communities, need to be maintained. Further, the partnerships must extend to ongoing employment and equal economic benefit.

Hina Farooqi is a second-year law student at Osgoode Hall Law School.

 

[1] Dayna Scott et al, “Chinodin Chigumi Nodin Kitagan: The Bow Lake Project as an Exercise of Inherit Jurisdiction by Batchewana First Nation” (2017) Working Paper