Energy
A federally guaranteed Indigenous loan program is reconciliation progress, but only if it respects Indigenous agency
Roger Marten, right, Chief of Cold Lake First Nations, and Curtis Monias, centre, Chief of Heart Lake First Nation, speak after Cenovus CEO Alex Pourbaix announces an initiative focused on Indigenous communities. Photo from The Canadian Press.
From EnergyNow.ca
Indigenous communities are increasingly becoming partners and owners in major natural resource projects across the country.
Resource Works has been excited to be involved in that movement through our annual Indigenous Partnerships Success Showcase, where we convene Indigenous experts to discuss Indigenous partnerships in major projects and across the Canadian economy.
Under a proposed federal program, even more, Indigenous communities could become partners and even owners in major natural resource projects, from oil to natural gas and liquified natural gas (LNG).
Back in 2010, the proposed Northern Gateway oil pipeline from Alberta to Kitimat offered a 10% equity stake in the project to participating Indigenous groups. Yet despite having significant support, there was also considerable Indigenous opposition to the project. Ultimately, the project was killed when Prime Minister Trudeau banned oil tanker traffic on BC’s northern coast.
Fast forward twelve years, and the Coastal GasLink (CGL) natural gas pipeline and the LNG Canada project are nearing completion. In fact, CGL finished laying the last of its pipe in the ground in October 2023, completing a truly herculean engineering task, the first energy pipeline to the coast in decades. Despite some Indigenous opposition, CGL has the support of the elected councils of all 20 First Nations along the route and has offered an option for First Nations to purchase a 10% equity share in the pipeline.
Coastal GasLink will feed LNG Canada, the largest private sector investment in Canadian history. That project will turn CGL’s natural gas into liquid, where it can be shipped more densely to Asia to help replace coal, especially in industrial applications, and reduce global carbon emissions.
While CGL and LNG Canada near completion, two more proposals for LNG projects in BC are coming onto the scene. A historic first, these projects are led by First Nations: the Cedar LNG project near Kitimat from the Haisla Nation and Ksi Lisims LNG in Northern BC from the Nisga’a Nation.
A third LNG project, Woodfibre LNG, was approved by the Squamish Nation in the first-ever Indigenous environmental impact review and is now beginning construction.
Indigenous involvement – and leadership – in major energy projects has arrived. Indigenous LNG is Canadian LNG, and Canadian LNG has become Indigenous LNG. This is a global first.
Beyond natural gas and LNG, the Trans Mountain oil pipeline expansion project from Alberta to Burnaby is anticipating completion in March 2024. The expansion triples the pipeline’s capacity, the only oil pipeline to Canada’s West coast.
While there has been Indigenous opposition to this project, there has also been support, including formal agreements and billions in contracting deals for Indigenous businesses during construction. In fact, several Indigenous groups are working to acquire an equity stake in the pipeline.
Historic restrictions in the Indian Act mean Indigenous peoples face enormous barriers in raising or borrowing money to finance equity partnerships. Yet the ability to purchase equity in major projects is to enter the big leagues of economic development and wealth generation.
The federal government is expected to announce a guaranteed loan program that will enable Indigenous Peoples to finally bypass these structural obstacles and purchase equity shares in resource projects. Alberta and Saskatchewan already have their own programs, and the federal government has a lot to learn from them, particularly Alberta’s Alberta Indigenous Opportunities Corporation.
Supporters of such programs point out that Ottawa, without spending a cent of taxpayers’ money, could backstop loans to Indigenous communities. It’s a low-risk mechanism and another way to support economic reconciliation.
Unfortunately, there is uncertainty about whether this federal initiative will allow all projects to be supported. There are reports that Ottawa will exclude oil and gas projects from the guaranteed-loan program, in favour of exclusively renewable and green energy projects.
Indigenous groups argue that they can make up their own minds on what to invest in.
Four Indigenous groups have told the prime minister: “This program cannot be driven by an ‘Ottawa-knows-best’ policy approach – the judgement of Indigenous Nations about projects to pursue must be respected. . . . We believe that this initiative is not only a practical step towards reconciliation but an opportunity to demonstrate Canada’s commitment to a just future for First Peoples.”
If this loan program is created, it should be up to Indigenous peoples to decide what they want to get involved in. If we are in an era of reconciliation, shouldn’t we empower Indigenous Peoples to be decision-makers?
We can do big things as a country when we partner with Indigenous peoples. But we need to ground our policies in a positive framework that builds agency.
For many Indigenous peoples, that starts with charting their own economic destiny, including in natural resources.
Margareta Dovgal is Resource Works’ Managing Director and Event Lead for the Indigenous Partnerships Success Showcase
From Resource Works
The rise of AI and other technologies have pushed energy demand through the roof, and Canada can help power that with nuclear.
Good to see Prime Minister Justin Trudeau pushing nuclear power as a key contributor to meeting the world’s soaring demand for electricity.
“The energy consumption necessary around AI (artificial intelligence) nobody has properly understood yet,” he said. “We have stepped up big time on nuclear.”
He cited Canada’s uranium reserves and progress in building both full-scale CANDU reactors and small modular reactors (SMRs). He said other countries need to “skate where the puck is going” on cleaner energy sources.
“We know that if we are going to meet our net-zero targets around the world, and certainly in this region, nuclear is going to be really part of the mix.”
He stopped short of saying Canada would build more major nuclear reactors for domestic use but spoke about the development of SMRs. Ottawa has previously stated it wants to become “a global leader in SMR deployment.”
Meanwhile, International Trade Minister Mary Ng said Canada is launching a gateway for nuclear development in the Asia-Pacific region. She said growing Pacific Rim economies will face increasing demand for electricity, not just to curb emissions.
“All this followed CANDU licence-holder AtkinsRéalis announcing a “multi-billion-dollar” sale of two CANDU reactors to Romania, the first to be built since 2007. The federal government contributed $3 billion, the company said.
And in one of our Resource Works Power Struggle podcasts, energy journalist Robert Bryce said: “We’re seeing the revitalization of the nuclear sector… There are a lot of promising signs.”
Also from Bryce: “Forty-seven per cent of the people on the planet today live in electricity poverty. There are over three billion people who live in the unplugged world; 3.7 billion who live in places where electricity consumption is less than what’s consumed by an average kitchen refrigerator.”
Policy Options magazine notes how Canada and 21 other countries signed a 2023 pledge to triple nuclear energy capacity by 2050, and says: “The reality would appear to be clear: there is no feasible net-zero future without the deployment of new nuclear power.”
For Canada, it adds: “We have an opportunity to expand our global status, but this requires overcoming years of policy inaction while other nations have modernized their nuclear strategies. To triple our nuclear capacity by 2050, we need clear priorities and unwavering political commitment.”
Earlier this year, François-Philippe Champagne, federal minister of innovation, science and industry, said nuclear power needs to grow for the world’s renewable-energy economy.
“Nuclear, definitely. For me, we have to look at hydro, we have to look at nuclear, we have to look at small modular reactors, we have to look at wind, we have to look at solar.”
Jonathan Wilkinson, energy and natural resources minister, promised to expedite the approval process for new Canadian nuclear projects.
Canada now gets about 15% of its electricity from nuclear generation, mostly from reactors in Ontario.
But the last nuclear reactor to come into service in Canada was at the Darlington station, east of Toronto, back in 1993. No new nuclear project has been approved since then, but multi-million-dollar upgrades are underway at existing Ontario plants.
Heather Exner-Pirot of the Macdonald-Laurier Institute and Jesse McCormick of the First Nations Major Projects Coalition see SMRs and micro-reactors as a plus for rural and remote areas of Canada that now rely on diesel to generate power. Some First Nations are also interested.
However, the two commentators point out that nuclear developers will need Indigenous support and will have to “provide meaningful economic benefits and consider Indigenous perspectives in project design.”
Now, the Wabigoon Lake nation in Ontario has stepped up as a potential host to a deep underground facility for storing nuclear waste.
As Canada looks to SMRs to meet electricity demand, our country also hopes to sell more uranium to other nations—perhaps with a little help from Russia.
In October, Russian President Vladimir Putin proposed restrictions on Russian uranium exports in retaliation for Western sanctions on Russian oil, gas, and LNG.
That boosted hopes for increased exports of Canadian uranium.
Canada, once the world’s largest uranium producer, is now the world’s second-largest, behind Kazakhstan, and accounts for roughly 13% of global output.
Putin’s threat gave more momentum to the plans underway by NexGen Energy for its $4-billion Rook 1 uranium mine in Saskatchewan.
The Canadian Nuclear Safety Commission has completed its final technical review of the project. Next comes a commission hearing, followed by a final decision on approval.
NexGen is working on detailed engineering plans in preparation for full construction, pending federal approval.
NexGen could push Canada to become the world’s largest uranium producer over the next decade. Other companies are rushing to Saskatchewan to start exploration projects in the Athabasca region, while existing players are reopening dormant mines.
All this follows the commitment by nearly two dozen countries in 2023 to triple their nuclear-energy output by 2050.
And so Britain’s BBC News topped a recent roundup on nuclear power with this headline: “Why Canada could become the next nuclear energy ‘superpower’.”
Grande Prairie. Getty Images photo
From the Canadian Energy Centre
Federal cash grab driving costs for local governments, driving up property taxes
New data shows the painful economic impact of the federal carbon tax on municipalities.
Municipalities in Alberta paid out more than $37 million in federal carbon taxes in 2023, based on a recent survey commissioned by Alberta Municipal Affairs, with data provided to the Canadian Energy Centre.
About $760,000 of that came from the City of Grande Prairie. In a statement, Mayor Jackie Clayton said “if the carbon tax were removed, City property taxes could be reduced by 0.6 per cent, providing direct financial relief to residents and businesses in Grande Prairie.”
Conducted in October, the survey asked municipal districts, towns and cities in Alberta to disclose the amount of carbon tax paid out for the heating and electrifying of municipal assets and fuel for fleet vehicles.
With these funds, Alberta municipalities could have hired 7,789 high school students at $15 per hour last year with the amount paid to Ottawa.
The cost on municipalities includes:
Lloydminster: $422,248
Calgary: $1,230,300 (estimate)
Medicine Hat: $876,237
Lethbridge: $1,398,000 (estimate)
Grande Prairie: $757,562
Crowsnest Pass: $71,100
Red Deer: $1,495,945
Bonnyville: $19,484
Hinton: $66,829
Several municipalities also noted substantial indirect costs from the carbon tax, including higher rates from vendors that serve the municipality – like gravel truck drivers and road repair providers – passing increased fuel prices onto local governments.
The rising price for materials and goods like traffic lights, steel, lumber and cement, due to higher transportation costs are also hitting the bottom line for local governments.
The City of Grande Prairie paid out $89 million in goods and services in 2023, and the indirect costs of the carbon tax “have had an inflationary impact on those expenses” in addition to the direct costs of the tax.
In her press conference announcing Alberta’s challenge to the federal carbon tax on Oct. 29, 2024, Premier Danielle Smith addressed the pressures the carbon tax places on municipal bottom lines.
“In 2023 alone, the City of Calgary could have hired an additional 112 police officers or firefighters for the amount they sent to Ottawa for the carbon tax,” she said.
In a statement issued on Oct. 7, 2024, Ontario Conservative MP Ryan Williams, shadow minister for international trade, said this issue is nationwide.
“In Belleville, Ontario, the impact of the carbon tax is particularly notable. The city faces an extra $410,000 annually in costs – a burden that directly translates to an increase of 0.37 per cent on residents’ property tax bills.”
There is no rebate yet provided on retail carbon pricing for towns, cities and counties.
In October, the council in Belleville passed a motion asking the federal government to return in full all carbon taxes paid by municipalities in Canada.
The unaltered reproduction of this content is free of charge with attribution to the Canadian Energy Centre.
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