A report released by Moody’s takes a dive into the shifting landscape of Indigenous involvement in projects ranging from hydro transmission lines to roads, bridges and airports
A major global bond and credit rating company says Canada should expect to see more Indigenous communities becoming key players in big infrastructure projects.
A report released last week by Moody’s takes a dive into the shifting landscape of Indigenous involvement in projects ranging from hydro transmission lines to roads, bridges and airports. The report found that First Nations, Inuit and Métis people are increasingly involved not just as stakeholders but as players in big projects, and that trend is likely to continue.
“I was quite surprised to find how many projects had Indigenous involvement,” said Catherine Deluz, a senior vice-president at Moody’s and the report’s lead author.
In the past, communities tended to be included in projects only as the recipients of impact benefit agreements. For example, a company looking to build a pipeline might negotiate with an affected First Nation for access to its land in exchange for certain benefits, but the communities themselves tended to be more passive players — waiting to be consulted and turning to the courts to block projects if they felt they’d been ignored.
While that paradigm certainly still exists in some cases — especially in resource extraction industries like mining — Deluz said many communities are starting to take the lead.
“Now we see equity participation and in some cases, even an increased role in terms of developing their own projects and inviting the private sector to work with them,” Deluz said.
That shift is hastened by the evolving legal landscape as well, Deluz said. Recent Supreme Court rulings on issues such as seismic testing in Clyde River, Nunavut, and Enbridge’s proposed Line 9 expansion through the Chippewas of the Thames territory are helping to clarify the government and industry players duties to consult and accommodate Indigenous communities.
“I think there’s a lot going on,” Deluz said. “Some people would argue it’s not enough yet, and others might argue it’s too much but certainly the way I look at it is that there is a lot of movement in that area to figure out how to deal with First Nations and Indigenous people when they are projects that affect their land.”
Deluz’s report points to the Wataynikaneyap Transmission project as a leading example of this new approach.
That project, a partnership between 20 northwestern Ontario First Nations and FortisOntario, aims to see an ambitious 1,800 kilometres of new hydro lines connect 17 remote First Nations to the provincial power grid. Those communities currently rely on unreliable diesel generators. Eight of those communities are currently under states of emergency because the power supply is so unreliable.
The project is lead by the First Nations and includes an option for them to buy out FortisOntario and own 100 per cent of the project once it’s completed. That is groundbreaking, according to Deluz.
“It’s going to be a really big test case in terms of seeing whether a First Nation can develop a very large project in Ontario and in Canada, and get the financing lined up for it,” Deluz said.
Margaret Kenequanash is Wataynikaneyap Power’s CEO. She said the goals for the project were two-fold from the beginning: get connected to the provincial grid, and do it on the communities’ own terms.
That meant partnering with a company that was willing to support those goals and transition ownership to the communities once everything is up and running. After a lengthy consultation process, FortisOntario emerged as that company, Kenequanash said.
Right now Wataynikaneyap is still working to raise the required investment to fund the project, but Kenequanash said they are still on track to begin construction in 2018.
“Given the need of our First Nations, I don’t think we have a choice in the matter,” she said.
While the Moody’s report paints a relatively rosy picture of the future for Indigenous infrastructure projects, it also highlighted at least one potential stumbling block: The difficulty Indigenous communities’ face in raising the capital or attracting investors needed to fund major projects.
“The financing avenues for First Nations are pretty fragmented,” Deluz said. There are some options, like Ontario’s Aboriginal Loan Guarantee program, but it’s only for renewable energy projects and it only exists in Ontario. There’s also the First Nation Finance Authority, but it sometimes can’t provide enough to fund major construction projects either, Deluz said.
“They really need to be able to find predictable financing avenues which will allow them to comfortably approach some of these projects,” Deluz said.