Last month at the Indian Resource Council Canada’s True Reconcili-Action conference in Toronto, Jason Kenney delivered a great keynote address, summarizing not only the back story of the Alberta Indigenous Opportunities Corporation (AIOC) but also his continuing work behind the scenes for its development.
Jason Kenney, well known for his long political career in federal and provincial politics, now a senior advisor at Bennett Jones had some great insights into the formation of the AIOC and how its relevance is resonating across Canada. But ultimately, he wanted to examine how we can take the progress that has been made in the economic inclusion of Indigenous people in Canada through the AIOC’s programs and take it to the next level.
Kenney described the challenging economic climate that gave rise to the AIOC, characterized by the inability to get major energy projects across the finish line, a climate fraught with indigenous frustration and opposition to major resource projects.
Kenney’s solution to these roadblocks was to convene a meeting between representatives of the Crown in Alberta, his cabinet and 47 First Nations Chiefs. He was following up on his election promise to create a $1-billion Indigenous Opportunities Corporation (rebranded from the Aboriginal Opportunities Corporation).
“We went around that table and heard the voices from all of those First Nations, Kenney said. “ And I can tell you, I think at least 45 of them spoke up and said that they supported responsible resource development. Now we see dozens of communities across the country getting involved in major projects enthusiastically because they now have a meaningful, long-term, real ownership stake. So we changed the model, we changed the paradigm. Perhaps not enough, much more work has to be done. But we should celebrate the progress we’ve made.”
Kenney credits the dramatic change in circumstances that has followed to three major advances. The first advance he recognized was:
“The growing generation of visionary leadership in Indigenous communities – leaders who realize that to move from poverty to prosperity, from dependency to self-reliance, from the old broken model of the Indian Act to self-government and economic sovereignty requires full participation in the economy… and that means the resource economy.”
Kenney identified the second significant factor as the growing awareness of business leaders to actively listen to First Nations and Indigenous communities and integrate them as equal partners on a commercial basis and make them part owners in major projects. He applauded the new leadership that has changed the model in recent years.
Thirdly, he recognized that governments are always the last to get the message and are finally waking up.
“Finally, we’ve seen some governments in this country at least begin to realize that the old Indian Act model is outdated. The resource model where the federal government would collect the royalties, the revenues from on-reserve oil and gas projects and sort of dribble it out, like a paternalistic father- the colonial Indian Act model. Instead, a new model has begun to develop, where governments are trying to fill the gaps to allow for Indigenous ownership of major projects and resources across the economy. And I’d like to boast that I think the best example of that has been Alberta’s Indigenous Opportunities Corporation – the AIOC.”
Kenney affirmed that the biggest barrier to Indigenous participation and ownership in major projects is access to credit. He promoted replicating the AIOC model across Canada and in Ottawa to massively expand the pool of capital that is available and bridge the gap of access to credit. Kenney credited Stephen Buffalo, President and CEO of the Indian Resource Council with asking for the new approach from the provincial government that allows for First Nations to become what Kenney calls “ real players in the Canadian economy.”
“I realized the biggest barrier to Indigenous ownership was access to capital for First Nations that don’t have fee simple ownership,” Kenney explained. “ They don’t have equity that they can get assessed by a bank. They don’t have much in the way of a balance sheet and often don’t have much in terms of financial dealmaking expertise or experience. So I thought, what if we took the Alberta Heritage Fund, and set aside initially a billion dollars to be available for financial backstop loan guarantees and other instruments? I explained to potential skeptics that if we were ever going to get pipelines built, to have a future for resource industries, we needed the full and enthusiastic participation of Indigenous people and that means ownership.”
Kenney was pleased to see that the Government of Alberta announced a tripling in the credit facility to $3 billion, which was his intention when he created the program. Kenney has also actively challenged other provinces (like BC) to follow Alberta’s lead and he mentioned speaking specifically to Ontario’s Minister of Indigenous Relations Greg Rickford about an Ontario version of the AIOC. Saskatchewan also has a version of the program. He’s invited the federal government to create a similar program but recognizes that one of the barriers at the federal level is their habit of getting into endless consultations.
“We need governments to begin in policy and legal terms, to recognize the positive rights that First Nations have to economic development,” Kenney said. “It’s not just the duty to consult First Nations. It doesn’t just mean the right to say no. It also means when they say yes to projects, to ownership, to revenue- it has to be respected, which is why my government created the Indigenous Defense Fund to underwrite legal challenges by First Nations who had not been consulted when projects were killed- like some of the First Nations who supported Northern Gateway.”
Chana Martineau the CEO of the AIOC also spoke at the True Reconcili-Action conference and I caught up with her recently to get her specific responses to Jason Kenney’s keynote.
Martineau confirmed that folks at the AIOC are pleased to see the federal government announce their intention to create a federal loan guarantee program similar to what has been created in Alberta. She confirms the AIOC has backstopped seven project investments by 42 distinct indigenous communities in Alberta which includes 30 First Nations and 12 Metis settlements and says the federal government has sought input from the AIOC on what is behind their success and what advice the AIOC has to give.
“I firmly believe that Indigenous people should benefit from or should participate in the benefit of the projects that are on their traditional territory, not just the risks,” Martineau said. “For too long, Indigenous peoples have been shut out of the benefit and opportunity side and have borne mostly the risks of those project investments. We’re really seeing this as a positive path forward to be able to do large-scale infrastructure projects in a way that only a few short years ago became very difficult to do.”
Martineau is aware of the complexities of relationships between communities. She stressed how the AIOC process aligns their interests so that all sides can benefit from the relationship while the AIOC mitigates the risks through a rigorous due diligence process. The intent is to derisk the financing structure as much as possible to make sure that the revenue streams are flowing, the Indigenous communities can count on them for reinvestment and that the province is protected from the call of a loan guarantee.
“The policy development in this area must be focused on Indigenous economic reconciliation,” Martineau said. “I applaud the Alberta government for creating a program that was dedicated to that goal and didn’t have a bunch of other policy objectives thrown in. Alberta has taken a very entrepreneurial approach and said to us, ‘We want to support Indigenous investment to catch up Indigenous communities into full participation in our economy’. Their approach is ‘let’s make it happen’, as opposed to ‘let’s find ways to not make it happen’, which I think can occur when you have too many policy objectives.”
Martineau has a long career in banking behind her coming into her AIOC role. She says the AIOC has the most robust and proactive loan guarantee program that she has seen in her career – including the other variations of loan programs across the country. She notes that Saskatchewan and Ontario’s versions are very different from Alberta’s. The AIOC has a very proactive approach – gathering all parties at the table and conducting tripartite negotiations. Part of the work is to help structure the best deal that will work for Provincial loan guarantees, including capacity funding for the First Nations and Metis communities to hire their own advisors. The AIOC employs a team of corporate finance experts as well as engagement experts and helps facilitate the entire transaction.
“We provide advice to both sides,” Martineau said. “ …the corporate partner and the Indigenous communities. It is a much more collaborative process and they know in real-time, right away if there’s going to be an issue with obtaining the loan guarantee, as opposed to coming together, doing a whole negotiation, writing all the paper in the agreement, submitting it for an application and then getting a potentially a rejection notice at the end.”
Martineau says Alberta’s program is often the envy of other jurisdictions. Because they want to share the success of the program, the AIOC acts to provide guidance and input to enable other First Nations and Metis communities across the country to be able to access capital in the same way that the nations and communities in Alberta do. The intent is to be a catalyst for Indigenous economic reconciliation in Alberta and beyond.
Another benefit of the program is that it is changing the conversation. Martineau reports that one of the communities in northern Alberta that was recently involved in just one of the AIOC’s transactions has changed the way that they speak to corporate partners. In consultation, the community immediately asked about an equity share – completely changing the nature of the conversation. She reports that some of the corporate partners are looking at doing more indigenous partnerships – a sign of success.
“I think that’s a real sign of success,” Martineau said. “When you when you’ve seen both the Indigenous communities as repeat partners, and the corporate partners looking at reinvesting with Indigenous partnerships through AIOC support- I think that’s a win for everyone”
At time of publishing, First Nations leaders Chief Sharleen Gale, Chief Willie Sellars, Chief Priscilla Mueller, Andrew John and Darrell Beaulieu were calling for a sector-agnostic national/federal Indigenous Loan Guarantee program ahead of the 2024 Federal budget. Pre-budget 2024 consultations concluded on February 9, 2024.
Congratulations go out to the Indian Resource Council Canada for hosting Jason Kenney and Chana Martineau and many other informative speakers at the True Reconcili-Action conference. There is news that another IRC conference in Ottawa may in the works for June 2024.
Maureen McCall is an energy professional who writes on issues affecting the energy industry.