Among the Truth and Reconciliation Commission’s Calls to Action are those calling for economic reconciliation. Through the growth of Indigenous employment, business partnerships and home-grown companies, Indigenous communities are seeking to reduce poverty and gain economic independence.
A recent survey by CAPP shows that in 2019, oil sands producers spent $2.4 billion in partnerships with Indigenous supply chain companies (a 52% jump from 2017) and Indigenous workers make up 7.4% of the oil and natural gas industry workforce (more than double the national average).
Energy Examined host Tracy Larsson delves into these numbers with CAPP Indigenous Policy Advisor Courtney Levesque-Thomas, including what they mean for these communities and the future.
Tracy: Hello. You are listening to the Energy Examined podcast. Welcome. The Canadian Association of Petroleum Producers, or CAPP, recently released a survey looking at Indigenous participation in the oil sands supply chain. The information shows some interesting trends in how industry and Indigenous businesses and communities are increasingly working together. To talk more about this, we are joined by Courtney Levesque-Thomas. She is an Indigenous policy advisor at CAPP. Hi Courtney, welcome to the podcast.
Courtney: Hi, thanks for having me.
Tracy: Before we get into more of the specifics, can you start by telling us about some of the broader trends demonstrated by the survey?
Courtney: Yes, so what we’re actually seeing more broadly is that Indigenous participation in industry is increasing and even the supply chain, while we were experiencing a downturn in the market, we saw the Indigenous supply chain and the procurement to Indigenous businesses continue to steadily increase from 2017 to 2019. So, this really shows for us that there are some real opportunities for Indigenous communities and the oil and gas industry to work together.
Tracy: And why is that important to keep track of?
Courtney: Well, we know that responsible development contributes to overall reconciliation and Indigenous self-determination by supporting the growth of sustainable Indigenous communities. And economic prosperity is a key factor in that sustainability. So, the trends that we saw in the survey show that industry can be a driver for economic prosperity for Indigenous communities, which can champion positive, tangible change for the people within those communities. And really for industry, this emphasizes a continued shift towards deeper engagement with Indigenous communities and the importance of utilizing local expertise from a skilled and invested workforce.
Tracy: What can you tell me, Courtney, about the companies who participated in the survey?
Courtney: Yes, so the companies that participated in the survey were CAPP member companies that operate in the oil sands. And interestingly enough, these companies are responsible for over 95 per cent of Canadian oil sands production.
Tracy: OK, so let’s get into some more of the specifics then, and maybe we’ll start with the procurement aspect. What does it show about the role of Indigenous-owned companies in the supply chain to the oil sands?
Courtney: So, as we touched on before, what it shows is that the inclusion of Indigenous businesses in the oil sands continues to grow in both spend and supplier numbers. From 2017 to 2019, the total procurement spend to Indigenous companies was approximately $5.9 billion. And interestingly enough, the proportion of Indigenous spend compared to overall capital expenditure continues to also increase. In 2019, we actually saw that Indigenous businesses represent approximately 11 per cent of the total procurement spend from oil sands producers. And just to give a couple more specific numbers to 2019, in that year, about $2.4 billion was spent on procurement from Indigenous businesses, which was 60 per cent higher than what we saw in 2018 and 53 per cent higher than in 2017. When it comes to supplier numbers, the number of Indigenous suppliers grew from 263 in 2017 to 275 in 2019. So, all these numbers really just help to showcase that steady growth that we have seen over the course of that three-year period.
Tracy: And so, what kinds of businesses are we talking about then when we hear supply chain?
Courtney: So, the types of businesses we’re referring to are those that support the lifestyle — or lifecycle of a project, including the project planning phase, construction to operations and reclamation. What we were seeing in the survey and what we have seen in previous surveys is that typically it’s within camps and catering, equipment services and maintenance, construction and engineering services are some of the top categories that Indigenous businesses largely represent in the oil sands.
A couple of great examples of successful Indigenous businesses in the oil sands includes Fort McKay Group of companies, which is fully owned and operated by the Fort McKay First Nation band and was actually established in 1986 with just six employees and a single janitorial contract. And since then, has grown to provide a range of diverse services and products to companies operating in the oil sands. The great thing is that their success goes right back into the community in both revenue and opportunity.
As well, when we think of successful companies in the oil sands, we can’t help but think of Mikisew Group of companies. Since 1991, this organization has also grown to be one of the leaders in the oil sands with respect to site services, maintenance, logistics and construction. One of their key objectives has been to foster responsible development, while powering sustainable economic progress in their community and beyond. They’ve also been recognized as a leader in hiring and retaining Indigenous employees. And the great thing is this isn’t just for Mikisew Cree First Nation, but also employees from Indigenous communities across Canada.
Tracy: How long has CAPP been doing this survey, Courtney?
Courtney: So, this survey has been done since 2015. And this year was the first year that we’ve moved it to be in alignment with our general oil sands survey.
Tracy: So, the oil and natural gas industry as a whole has really been working to build relationships with Indigenous businesses and communities. What can you tell us about that community investment aspect?
Courtney: Yeah, so, I mean, as we know, the relationship between our oil sands companies and the oil and natural gas industry and communities goes beyond just the economics and goes beyond just supply chain. What we also see is that there is a strong investment in the communities themselves and the total funding that we saw in the survey for community investment in the oil sands from 2017 to 2019 was just over $85 million. And so, when we’re talking about community investment, really what we’re referring to is funding that can contribute to community education, employment training programs, environmental initiatives, social and cultural events. Sometimes it’s in-kind investment or it could be physical infrastructure.
Tracy: There’s also been an increase in consultation funding. Can you explain what that is and why it’s important?
Courtney: Yes, definitely. So, consultation funding, when we talk about that, we’re actually referring to payments made by proponents that are intended to support and maintain Indigenous capacity to consult on proposed projects or activities. And again, when we looked at the total funding for consultation capacity to Indigenous communities in the oil sands from 2017 to 2019, it was just over $65 million. So, to go into further detail about what we’re actually talking about when we look at consultation funding, these types of payments include well, they go towards various aspects of the consultation process. So, that could be operational funding for community consultation offices, funding for traditional land use, the traditional knowledge studies, technical reviews of project proposals and site visit.
And I just want to make an important note on consultation funding as well as community investment, and that point is that consultation engagement and investment in communities can come in many forms. So, when we’re talking about this funding, there is no one size fits all for it and that it’s actually quite scalable and dependent on multiple factors. So, usually we look at — or proponents may look at the size and scope of a project. They will work together with communities to review ongoing commitments as well as community needs and interests. And so, I just think it’s important that we’re mindful of that when we look at such numbers as $65 million or the $85 million and know that that’s very flexible funding.
Also, this funding may be used by Indigenous communities to hire their own independent consultants to ensure they acquire the necessary expertise to support their evaluation of a project, as well as any additional studies or assessments that may be required. This also helps to ensure that they can be a full and equal participant in the consultative process.
Tracy: Right, OK. As Indigenous businesses grow their participation in resource development, what are we seeing in these communities then, in terms of Indigenous employment opportunity?
Courtney: Yeah, so like much of the other findings from the survey, we are seeing that employment of Indigenous peoples in the oil and natural gas industry, not just in the oil sands specifically continues to grow. And so, in our most recent data, it was noted that Indigenous peoples represented about 7.4 per cent of industry’s workforce. And so that’s the 2019 number, and this was actually up from 4.8 per cent in the previous year in 2018. Now, when we look at the national statistics, Indigenous peoples represent about 3.3 per cent of total Canadian employment. So, really doing that comparison between the oil and natural gas sector, you’re seeing that it’s more than twice the national average.
Tracy: In looking at all of this information then — the trends and the data, how is this information of value kind-of as we look down the road for industry?
Courtney: So, again, really, I think the value is that it shows, like the findings are showing that this emphasis on the growing trend towards deeper engagement between oil and gas companies and Indigenous communities, and it highlights the fact that over time, the industry and communities, particularly in the oil sands, have been able to build relationships based on mutual trust and respect that go beyond any sort of government policy or regulatory requirement. And I think, you know, I mean, we haven’t seen the impacts of COVID-19 yet. That hasn’t been captured in this survey. But I do feel that as the industry continues to evolve and to develop, so will the relationships between oil sands companies and the communities in whose traditional territory they operate.
Tracy: Courtney, thanks so much for this. Thanks for taking the time to join the podcast.
Courtney: It was my absolute pleasure. Thanks for having me.
Tracy: Well, that’s it for today’s podcast, tune back to Energy Examined regularly for more insight into Canada’s oil and natural gas industry. Be sure to subscribe and share with a friend. In the meantime, you can also check out the Innovative Minds podcast by COSIA. That’s Canada’s Oil Sands Innovation Alliance. You can learn more about some of the exciting developments in environmental innovation in Canada’s oil sands. Search Innovative Minds on your favourite podcast network. Thanks for tuning in. See you next time.