Alberta Premier Danielle Smith says she’s willing to work with the feds to get a “portion of Indigenous participation” in the Trans Mountain pipeline.
Smith said she has spoken with federal Finance Minister Chrystia Freeland about putting in place something similar to the Alberta Indigenous Opportunities Corporation (AIOC), which provides loan guarantees for Indigenous Nations to invest in major projects in the natural resources, agriculture, telecommunications, and transportation sectors.
But Smith fell short in committing AIOC loan guarantees for Indigenous nations to buy an equity stake in the pipeline, now owned by Canada, despite announcing on Monday that AIOC’s capacity would increase to $3 billion in 2024/2025, up from $2 billion.
“There’s significantly more British Columbian First Nations…so I think we’ve established this (AIOC) program in order to be able to help the Indigenous communities here, and so I don’t know if it’s in the program parameters to help Indigenous communities in other provinces,” said Smith.
When the AIOC was created in November 2019 by the United Conservative Party government, it was with the intention of providing loan guarantees to Indigenous Nations and groups within the province, however, it was also opened to other Indigenous groups that could advance economic development in Alberta.
Former premier Jason Kenney championed the loan guarantee scheme as a way to attract B.C. First Nations to support the Trans Mountain pipeline expansion, which was to boost the pipeline’s capacity to 890,000 barrels per day from 300,000, carrying oil from Alberta to the Burnaby, B.C. The pipeline is expected to be operational in the first quarter of 2024.
“They’re tired of the old model, which is just benefit agreements” said Kenney at the time. “It’s a relatively small stream of income. I think the game changer for a lot of those First Nations who could potentially get into supporting pipelines, would be, actually, to have an ownership stake.”
Kenney also committed to working with the federal government to replicate the AIOC.
The original $1 billion AIOC loan guarantee budget increased to $2 billion this past year, and in 2022 the projects to be supported expanded from medium- and large-sized natural resource developmentsto the other sectors.
To date, AIOC has backed $511 million in investments benefitting 27 Indigenous communities.
That small amount in loan guarantees at this point in time only means there was “some trepidation” when the Crown corporation initially began, said Indigenous Relations Minister Rick Wilson.
The AIOC operates at arm’s length from the government and reports to Wilson’s department.
“It took some time to get the buy-in from across the province, from the First Nations and Métis communities, and once we got (it)…all of a sudden people are (saying), ‘Oh, this is real,’ and the projects started coming in,” he said.
The AIOC office is vetting more than 100 projects, some of which have been in the works for the past year, said Wilson.
The Indigenous Communities Syndicate, which includes the Enoch Cree Nation, was the first consortium to get AIOC approval.
In 2020, the Enoch Cree Nation and five other First Nations received a $93 million loan guarantee from AIOC for equity ownership in the Cascade Power Project.
“Projects like Cascade Power empower Indigenous communities with newfound opportunities and financial versatility enabling us to reinvest in our communities,” said Enoch Chief Cody Thomas, who described the AIOC as a transformative force for Indigenous communities.
“These initiatives stimulate economic growth, foster job creation, nurture innovation, cultivate generational wealth, which in turn enriches every facet of our province,” said Thomas.
The annual benefits from that project—or any project–have yet to flow back to the Indigenous communities.
It is projected that starting in 2024, “dependent on revenues and different factors”, that Indigenous communities who have been recipient of loan guarantees will receive more than $25 million annually for the next 30 years, said Chana Martineau, hired as CEO for AIOC last year.
“We expect north of $1.2 billion to be flowing into Indigenous communities in our province from the deals done to date. Now there are a number of factors that go in there and any good investment banking professional would give you a big caveat around those numbers, but those are projections. So it’s significant revenue,” she said.
Martineau said her office is starting to be asked if there will be enough money for future projects, so the $3 billion commitment provides that comfort level.
“Taking nine months or a year to bring these monumental transactions forward means that companies are planning today for a year from now and they’re worried,” said Martineau. “Do (they) want to invest that time and that energy in a potential transaction that there might not have enough allocation available? And so the province is saying, ‘We’re here. We’re committed. We are prepared to do these projects long term’.”
By Shari Narine, Local Journalism Initiative Reporter, Windspeaker.com
Original Published on Nov 01, 2023 at 18:47
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