The Indian Act does not allow Indian lands to be used as collateral to obtain loans or secure investment.
This has made it difficult for First Nations to develop their economies and has kept many in poverty and dependent on government funds.
In October 2019, the Alberta Government introduced Bill 14, the Alberta Indigenous Opportunities Corporation Act (AIOC). The AIOC will lower financial barriers and provide loans to Indigenous groups interested in building oil and gas pipelines from Alberta to the B.C. coast.
In a CBC article about AIOC, Premier Jason Kenney acknowledged that “We’re not going to get the pipeline built unless there is First Nations support and involvement. This helps facilitate that.”
The Edmonton Journal reported that Indigenous groups from outside Alberta can apply if they advance Alberta’s economic interest. Currently, there are 35 Indigenous groups from Alberta and B.C. that support the AIOC as they see it a way to become financially independent and control their own destinies.
Former premier Rachel Notley said the Alberta NDP would support the bill in principle, but worried the AIOC “will place the burden of debt on Indigenous groups.”
Notley has good reason to be concerned. Since the Indian Act does not allow Indian lands to be used as collateral, Indigenous groups that obtain financing through the AIOC will likely be required to repay their loans from profits generated by their oil and gas projects.
While the vision of Indigenous leadership to become financially independent is exactly right, loan repayment will reduce profits generated by the pipeline and may result in marginal financial gain for Indigenous groups.
Moreover, with the climate crises upon us, countries, citizens an corporations around the world are rethinking their energy sources and slowly moving towards renewables. As the climate crises escalates, so too will the energy shift, resulting in decreasing demand for petroleum.
The Financial Post reported that in the past three years, foreign oil firms have pulled their investments from Alberta oilsands to the tune of $3 billion. While many have withdrawn due to the uncertainty of pipelines, other foreign firms cite high carbon emissions and harm to the environment as the reason.
The most recent withdrawal was the Norwegian Pension Fund, which said in a CBC report that petroleum was not part of the future or solution to the climate crises.
With the slow but inevitable global shift towards renewable energy, Indigenous groups participating in AIOC will face reduced petroleum profits over time, making it difficult to repay their loans.
Nations consider themselves to be stewards of the earth and traditionally practiced conservation and sustainable natural resource use. Unfortunately, legislated poverty has forced many First Nations to participate in natural resource development projects not necessarily consistent with their traditional environmental values and responsibilities.
The climate crisis provides an opportunity for First Nations to build their economies through renewable energy and other eco-friendlier projects. This would allow them to maintain their traditional ecological values while becoming financially independent at the same time.
Rather than locking themselves into a petroleum industry that is sure to decline in the long run, it would be strategic for First Nations to ride the wave of climate change and invest in renewal energy and other eco business ventures.
Terry Poucette is an assistant teaching professor at the school of public administration at the University of Victoria, where she also earned her PhD. She is a member of the Stoney Nakoda First Nation Wesley band and her research interests include First Nations governance and Indigenous leadership. Poucette writes Culture and Politics as a monthly column for the Rocky Mountain Outlook and Cochrane Eagle.