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Resource development supports Indigenous self-determination: study

Research shows strong link between Indigenous prosperity and the resource industry, including oil and natural gas development.

A recent report by the Macdonald-Laurier Institute (MLI) strongly links natural resource development with Indigenous independence and self-determination.

The report examines the need for Indigenous self-determination – defined as the ability to earn a good livelihood, generate own-source revenues, and determine and fund community priorities independently – and the pathways to self-determination offered through responsible resource development across Canada. The report looks at oil and natural gas, mining, forestry, hydro and commercial fisheries developments.

Over the past 20 years, Indigenous communities have gained influence in, and derived benefits from, the resource development sector. From impact and benefit agreements (IBAs) to equity ownership deals, Indigenous workers, businesses and nations have become increasingly involved in the resource industry, earning billions in procurement contracts, royalties and revenue in addition to opportunities for education, training, employment and community investment.

Industry leadership

Today, resource development dominates the Indigenous business landscape. A 2016 survey by the Canadian Council of Aboriginal Business found that 39 per cent of Indigenous businesses worked in extraction-related industries such as mining, oil and natural gas. In contrast, according to Innovation, Science and Economic Development Canada, less than one per cent of all Canadian businesses are engaged in the extractive sector. In other words, Indigenous businesses are far more likely to be involved in resource development than the average Canadian business.

MLI notes the oil sands industry stands out as the biggest combined purchaser of Indigenous goods and services. Publicly available data summarized by MLI includes:

  • Suncor has spent over $6 billion on Indigenous procurement since 1999, including $800 million (or eight per cent of its total spending) in 2019.
  • Cenovus has spent $2.9 billion since 2009, including $139 million in 2019.
  • Canadian Natural Resources awarded $550 million in Indigenous contracts in 2019.
  • Imperial has invested $2.6 billion with Indigenous business since 2009.

Pipeline companies have also become major players in Indigenous procurement:

  • Enbridge Line 3 Replacement Project spent a total of $440 million on Indigenous contracting and wages. Enbridge spent over $1 billion between 2014-19 across their liquids, pipelines, and gas transmission businesses.
  • Coastal GasLink has spent $720 million on Indigenous and local contracts by September 2020, and expects to spend $1 billion by the time the pipeline project is complete.
  • The Trans Mountain Expansion project, when complete, will have generated over $1 billion in Indigenous-based contract awards.

By contrast, the federal government’s published Indigenous spending record indicates that of $18 billion in annual purchasing in 2015, the government procured less than one per cent from Indigenous businesses – $93.5 million (Indigenous and Northern Affairs Canada 2019). More recently, progress in the public sector has improved but still lags behind the resource sector, with an average of $440 million in Indigenous procurement in each of 2017-18, 2018-19, and 2019-20 of the federal government’s total annual average spend of $22 billion, representing about two per cent of its spending

Changing perspectives

The report also points out much of the current public and media narrative overlooks past progress among the Indigenous nations, entrepreneurs and workers who choose to participate in resource development. This narrative consistently fails to appreciate that the many Indigenous nations involved in the resource industry have become increasingly knowledgeable but can also face opposition within their own communities.

In a 2019 commentary in the National Post, Dale Swampy, president of the National Coalition of Chiefs, noted, “Indigenous leaders are called on by their people to address poverty in their communities, through better housing, water, education and employment. But when they engage with industry to actually develop some economic development opportunities, they are often called sell-outs. This is made worse because the loudest opponents to working with industry often reside elsewhere and don’t have to face the consequences of on-reserve poverty every day.”

The report concludes that Indigenous participation in the resource sector “… is driven by the near universal desire of Indigenous nations to be self-determining, something that requires not just the legal recognition of rights by governments, but the ability to be economically self-sufficient. Indigenous nations have considerable scope in which to say “no” to development; but most are focused on articulating the conditions under which they will say “yes.”