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Alberta

ONE RELATIONSHIP AT A TIME:  THE PATH TO PROJECT SUCCESS

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8 minute read

ONE RELATIONSHIP AT A TIME:  THE PATH TO PROJECT SUCCESS

Infrastructure development is full of risks, which are managed in a number of ways. Risk management might sound cold and impersonal, but it has the potential to incent real human connections and build genuine relationships. Key risks may have leading practice on how best to mitigate, transfer, ignore or hold those risks, but when it comes to energy development across Canada, meaningful consultation and accommodation is non- negotiable. As most are well aware at this point, the Crown must consult and accommodate where Aboriginal or Treaty rights are impacted. Far from being a mandatory ‘checkbox’ in the process of project development, the undertaking of engagement and relationship-building holds the potential for mutual benefits for both the project and the impacted First Nations, Inuit, or Métis community.

Genuine relationship-building is a solid foundation for partnership on energy projects, to the benefit of both parties. This partnership can take the form of Impact Benefit Agreements (IBA) Mutual Benefit Agreements (MBA) or equity participation arrangements, among others. Both IBAs and equity arrangements have the potential to grow economic and social prosperity, but determining which approach is the best fit will be influenced by the priorities and capacity of both the developer and the Indigenous community.

In both these common approaches there are similar objectives:

  • Compensation for and mitigation of potential impact
  • Influence or control over project design and development
  • Securing benefits for the community
  • Securing social license
  • Working towards consent and support of the project
  • Reduced risk of opposition or disruption
  • Improved financing as a result of managed risks

Both also reflect an underlying premise that it is no longer acceptable to develop resources or energy infrastructure in a manner where impacts fall to one party, and benefits to the other.

When comparing and contrasting IBAs and equity arrangements, some key considerations are the degree of potential impact, the capacity and interest of the community in the project’s development and management, the project’s term, risk tolerance of either party, and financing and funding opportunities.

Impact Benefit Agreements between a project developer and impacted Indigenous community formalize project benefits sharing. Often, these IBAs will provide some employment, training, and contracting opportunities, but the economic benefits will often be tied to the project’s degree of impact to traditional lands and lifestyle (e.g., land impacts, hunting and gathering impacts, etc.). Regardless of how well the project is performing, the IBAs will guarantee a steady revenue stream to the Indigenous community. This can be a safe bet for risk adverse councils but holds the potential for serious revenue inequity in the case where the project is successful and very profitable.

Pivoting from partnership to ownership, equity participation agreements clearly scale the revenue sharing between the project developer and community as the project success and profitability increases. If the energy project does well, the First Nation, Inuit, or Métis equity partner is also going to do well and see greater revenues. The inverse is also true. In these equity arrangements, which are becoming more prevalent in the eastern provinces, the Indigenous partner has a greater say in project operations, as they are a shareholder. It also arguably provides more security to the developers, as the Indigenous partner is a proponent of the project, and no longer a potential opponent. Both partners would look to maximize the economic benefits of the project, while minimizing the adverse economic, environmental and social consequences flowing from the project. Without focusing too much on the direct revenue arrangement, equity arrangements will often also include guaranteed or preferential opportunities for contracting, procurement, employment and training.

To be clear, in either an IBA or equity arrangement model, the duty to consult and accommodate is neither negated nor automatically fulfilled. But the relationship between developer and community becomes formalized and clearer, adding transparency and certainty to an otherwise risk-filled process.

Managing project risk is a mandatory part of project development. But the means of managing risk holds so much potential for empowerment, leadership, and benefit. Project success and economic development are not an end in themselves, but rather a means to an end – the end being healthier and more prosperous First Nations, Inuit, and Métis communities, and Canada as a whole. All the while moving the dial on reconciliation through real connections, business developments, and cultural education – one relationship at a time.

Robyn Budd was a 2019 member of the Energy Council of Canada’s Young Energy Professionals program and was a Manager in KPMG’s Global Infrastructure Advisory practice, based in the unceded territory of the Musqueam, Squamish, and Tsleil-Waututh nations (Vancouver). She was also the Leader of KPMG’s National Indigenous Network.

Zachary McCue is Founder of The Waabgaag Group, with expertise in renewable, infrastructure, and resource development, specializing in equity participation and impact benefit agreements. He is a proud member of Curve Lake First Nation and is based in Ontario.

Thanks to Todayville for helping us bring our members’ stories of collaboration and innovation to the public.

Click to read a foreward from JP Gladu, Chief Development and Relations Officer, Steel River Group; Former President and CEO, Canadian Council for Aboriginal Business.

JP Gladu, Chief Development and Relations Officer, Steel River Group; Former President & CEO, Canadian Council for Aboriginal Business

Click to read comments about this series from Jacob Irving, President of the Energy Council of Canada.

Jacob Irving, President of Energy Council of Canada

The Canadian Energy Compendium is an annual initiative by the Energy Council of Canada to provide an opportunity for cross-sectoral collaboration and discussion on current topics in Canada’s energy sector.  The 2020 Canadian Energy Compendium: Innovations in Energy Efficiency is due to be released November 2020.

 

Click to read more stories from this series.

Read more on Todayville.

INDIGENOUS CONSULTATION AND ENGAGEMENT AT CANADA’S ENERGY AND UTILITY REGULATORS

The Energy Council of Canada brings together a diverse body of members, including voices from all energy industries, associations, and levels of government within Canada. We foster dialogue, strategic thinking, collaboration, and action by bringing together senior energy executives from all industries in the public and private sectors to address national, continental, and international energy issues.

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Alberta

Alberta mother accuses health agency of trying to vaccinate son against her wishes

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From LifeSiteNews

By Clare Marie Merkowsky

 

Alberta Health Services has been accused of attempting to vaccinate a child in school against his parent’s wishes.  

On November 6, Alberta Health Services staffers visited Edmonton Hardisty School where they reportedly attempted to vaccinate a grade 6 student despite his parents signing a form stating that they did not wish for him to receive the vaccines.  

 

“It is clear they do not prioritize parental rights, and in not doing so, they traumatize students,” the boy’s mother Kerri Findling told the Counter Signal. 

During the school visit, AHS planned to vaccinate sixth graders with the HPV and hepatitis B vaccines. Notably, both HPV and hepatitis B are vaccines given to prevent diseases normally transmitted sexually.  

Among the chief concerns about the HPV vaccine has been the high number of adverse reactions reported after taking it, including a case where a 16 year-old Australian girl was made infertile due to the vaccine.  

Additionally, in 2008, the U.S. Food and Drug Administration received reports of 28 deaths associated with the HPV vaccine. Among the 6,723 adverse reactions reported that year, 142 were deemed life-threatening and 1,061 were considered serious.   

Children whose parents had written “refused” on their forms were supposed to return to the classroom when the rest of the class was called into the vaccination area.  

However, in this case, Findling alleged that AHS staffers told her son to proceed to the vaccination area, despite seeing that she had written “refused” on his form. 

When the boy asked if he could return to the classroom, as he was certain his parents did not intend for him to receive the shots, the staff reportedly said “no.” However, he chose to return to the classroom anyway.    

Following his parents’ arrival at the school, AHS claimed the incident was a misunderstanding due to a “new hire,” attesting that the mistake would have been caught before their son was vaccinated.   

“If a student leaves the vaccination center without receiving the vaccine, it should be up to the parents to get the vaccine at a different time, if they so desire, not the school to enforce vaccination on behalf of AHS,” Findling declared.  

Findling’s story comes just a few months after Alberta Premier Danielle Smith promised a new Bill of Rights affirming “God-given” parental authority over children. 

A draft version of a forthcoming Alberta Bill of Rights provided to LifeSiteNews includes a provision beefing up parental rights, declaring the “freedom of parents to make informed decisions concerning the health, education, welfare and upbringing of their children.” 

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Alberta

Alberta’s fiscal update projects budget surplus, but fiscal fortunes could quickly turn

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From the Fraser Institute

By Tegan Hill

According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.

The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.

For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).

And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.

In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.

This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.

Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.

Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.

Of course, if the government falls back into deficit there are implications for everyday Albertans.

When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.

According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.

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