First Nations oil and gas sector blasts Guilbeault for lack of consultation on new subsidies framework

Stephen Buffalo, president and CEO of the Indian Resource Council of Canada (IRC), is not applauding the federal government’s recent announcement that subsidies will continue to flow to First Nations to support their economic participation in fossil fuel activities.

The continuation of those particular subsidies was one of six exemptions outlined in Canada’s framework for eliminating inefficient fossil fuel subsidies. The framework was released July 24 by Environment and Climate Change Minister Steven Guilbeault. Also identified as an exemption are subsidies that provide an essential energy service to remote communities.

The framework is in response to Canada’s 2009 commitment to phase out inefficient fossil fuel subsidies as part of a commitment with other G20 countries. Such subsidies, says the 2009 G20 communique, “encourage wasteful consumption, reduce our energy security, impede investment in clean energy sources and undermine efforts to deal with the threat of climate change.”

Starting in 2028, the federal government will eliminate tax breaks, financing and loan guarantees for fossil fuel projects that don’t reduce emissions.

Indigenous economic participation will continue to receive federal program and expenditure support (or measures), says the framework, as long as “the main beneficiary of the funding or measures are Indigenous peoples.”

The announcement allowing those continued subsidies “scared me more than anything,” said Buffalo. “You never know what the federal government's going to do and, for the most part, they're doing this without consultation with First Nations.”

IRC was founded in 1987 by chiefs representing oil and gas producing First Nations. Its mandate is to advocate for federal policies that improve and increase economic development opportunities for its 130-plus members. While the organization has representation from across the country, the majority of its members are located in western Canada. The organization is headquartered at Tsuut’ina Nation in southern Alberta.

The government’s actions contradict the United Nations Declaration on the Rights of Indigenous Peoples and Canada’s own United Nations Declaration Act (UNDA), which mandates Canada to consult and cooperate with Indigenous peoples, said Buffalo.

UNDA also commits the federal government to review all new legislation through an Indigenous lens.

“(This framework) is just being put before us and then that's the fear, because the government is really trying to implement policies without talking to the actual grassroots people,” said Buffalo. “It just seems we keep having these arguments over and over again.”

Larry Kaida, an IRC advisor and assistant to Buffalo, says the framework is an example of Canada’s continued patriarchal approach to interacting with First Nations.

“If asked, we could have told them that when they punish the fossil fuel industry, there will be ripple effects on Indigenous folks who have many joint ventures with industry,” said Kaida.

Buffalo points out that First Nations now have “better relationships with industry more than ever” and are benefitting beyond the usual opportunities of employment, spinoff companies, and contracts.

Deeper relationships have been realized in equity ownership in numerous oil and gas projects, as well as ownership in infrastructure, such as pipelines, he says.

At the end of July, the Alberta Indigenous Opportunities Corporation (AIOC) announced a loan guarantee of $103 million to Northern Lakeland Indigenous Alliance (consisting of Buffalo Lake and Kikino Métis settlements and Saddle Lake Cree, Heart Lake and Whitefish Lake First Nations) to acquire approximately 43 per cent interest in Access NGL Pipeline System operated by Wolf Midstream Canada.

“(These are) revenue streams that nations never had before…This is self-sustaining,” said Buffalo. “Those are going to get some sort of an impact,” from the framework.

Both Buffalo and Kaida also express concern with the lack of details that accompanied Guilbeault’s announcement.

“The hard part is what's the real action behind a lot of these things? They're trying to make it sound like everything's going to be good when it's going to be very difficult to access certain things,” said Buffalo.

For instance, he says, it is unclear if allowing subsidies that benefit Indigenous economic participation will give Indigenous-led groups an upper hand in ownership of the Trans Mountain Pipeline expansion. The federal government bought Trans Mountain in 2018 for $4.5 billion with the intention of selling it.

A number of First Nations and Métis-led groups have expressed interest in purchasing Trans Mountain pipeline, which is presently undergoing a 1,150-km expansion. The Trans Mountain pipeline is Canada's only pipeline system that carries oil from Alberta to the West Coast.

“We have to pursue these opportunities to meet the needs of our people and to meet the needs that the federal government doesn't want to touch,” said Buffalo.

If Canada is serious about economic opportunities for Indigenous peoples, he adds, then the federal government would consider establishing something similar to AIOC, which recently doubled its commitment to $2 billion to backstop loan guarantees for Indigenous-led projects in natural resources and other areas like agriculture in Alberta.

“I know there's a few of us that are planting the seeds of that type of…initiative or policy that the federal government can do,” said Buffalo.

Much of Canada’s support to the fossil fuel sector comes from Crown corporations and commercially viable loans. These are not included in the new framework.

Kaida is concerned about the future of the Site Rehabilitation Program, which saw federal funding of $1.72 billion funneled through the provinces through to the oil field service contractors to undertake well, pipeline, and oil and gas site closure and reclamation work at abandoned and orphaned well sites.

“Some in Ottawa still believe this was a subsidy. We saw this as land stewardship and job creation. If industry benefited, so be it,” he said.

Buffalo said the program had First Nations “in the driver’s seat,” able to set priorities and direct companies to where they wanted land reclaimed. Approximately $131 million was spent by First Nations for work on abandoned well sites and to clean up reserve lands.

“Yes, you saw industry see some benefit as it took liability off of their balance sheet, but I think the most important thing is that the First Nations were cleaning the land themselves,” he said.

As First Nations populations are growing, more land is needed, Buffalo says, and the rehabilitation program provides for some of that additional land.

Kaida is concerned that subsidies earmarked for Indigenous projects and for remote communities that still rely on diesel and gas to power their generators will end up going to bureaucracy “as they normally do. Very little trickle down to those that need it the most.”

Buffalo views the new framework as Canada’s move to get rid of the oil and gas sector.

“No one can tell First Nations about environmentalism and protection of Mother Earth. We know.  But in the same sense, we have to find ways to balance protecting Mother Earth and yet having an opportunity to make our lives better as First Nations,” said Buffalo.

Local Journalism Initiative Reporters are supported by a financial contribution made by the Government of Canada.