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The potential for economic reconciliation through meaningful Indigenous-industry relationships

This Op-Ed was originally published by Ottawa’s The Hill Times on June 17, 2019. It is written by The Conference Board’s Stefan Fournier and Candice Shaw.

Key Canadian sectors and organizations have a genuine opportunity to improve relationships with First Nation, Inuit and Metis people across the country. And there is an increasingly promising array of developments, tools and frameworks to accomplish this.

With its 94 Calls to Action, the Truth and Reconciliation Commission’s (TRC) final report provides a clear and robust framework for improved relations with Indigenous groups. The United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) offers further guidance on where and how the country can do better. For their part, recent court cases such as Tsilhqot'in Nation v British Columbia that established Aboriginal land title, or Daniels vs Canada, which clarified jurisdictional responsibilities surrounding the Metis, are strengthening recognition and respect for Indigenous rights and interests. Meanwhile, proposed revisions to environmental assessment legislation could also work to establish more equitable, constructive relationships.

These developments and frameworks are typically viewed as pivotal to repositioning the relationship between the public sector (the Crown) and Indigenous groups. But they are also relevant to the actions and roles of other sectors, including academia, the judiciary and businesses. Industry organizations, particularly those with operations and projects on Indigenous traditional territories, may have an especially important role to play.

But what is this role? And why do some see industry as a sector that can significantly impact the country’s reconciliation agenda?

Industry is well-placed to help close the socioeconomic gap facing many Indigenous communities within Northern and remote Canada. In other words, it can contribute to fostering economic reconciliation – a role that is clearly described in the Truth and Reconciliation Commission’s Call to Action 92. Among other things, this Call asks corporations to provide Indigenous peoples with equitable access to jobs, training and education, and to ensure Indigenous communities acquire sustainable, long-term benefits from economic development projects. It also calls on the corporate sector to adopt UNDRIP as a framework for reconciliation, build respectful relationships, and commit to meaningful consultation with communities based on the principle of free, prior, and informed consent.

The relationships, agreements and partnerships that are established between industry organizations and Indigenous groups around major economic development projects are opportunities for implementing Call to Action 92. Major project agreements (MPAs) can address the negative impacts of development, in addition to ensuring Indigenous community access to the benefits derived from economic activity on traditional lands. At the same time, MPAs can reduce the risk to projects for companies through the establishment of “social licence” (i.e. community support), and by enhancing project outcomes via a more certain operating environment and the provision of local labour, services and supplies from Indigenous communities and businesses.

Impact Benefit Agreements (IBAs) have been a common feature of the Indigenous-industry landscape for the last few decades. In addition to addressing unwanted impacts, IBAs typically provide benefits to communities in the form of business, employment and training opportunities as well as financial arrangements. Contemporary IBAs can be both creative and robust, as seen within the mining sector in Canada’s territories. Between 1996 and 2016, the diamond mines in the Northwest territories alone spent $5.6 billion on Indigenous business, with an additional $100 million provided to communities in payments, scholarships, and donations.

But some communities and companies are looking to move beyond IBAs to create full-fledged partnerships. Equity stake agreements (ESAs), for example, foster Indigenous ownership alongside industry partners, such as with Fort McKay First Nation and Mikisew Cree First Nation’s acquisition of a 49% interest in Suncor’s East Tank Farm Development. As with IBAs, ESAs lead to skills development, training and employment. But they also afford access to own-source revenue and opportunities for indigenous partners to acquire higher-level business acumen through direct involvement in the decision-making, operations and management of the business. For businesses, they ensure that the Indigenous partner shares in the risk and has a direct stake in project outcomes.

There are also important spillover benefits with MPAs that can further contribute to Canada’s reconciliation agenda. First, they can foster community capacity development as a result of their associated employment, training and skills development opportunities. The capital generated through projects can be leveraged for investments in community infrastructure and to address other economic and social needs, such as on-the-land programs and youth-support initiatives. Equity participation in projects may also support objectives around Indigenous self-determination by giving communities greater control over their economic development trajectory, decisions that affect traditional territories, and financial independence.

This is not to suggest that agreements between Indigenous groups and industry are necessarily beneficial. Implementation has all too often been a struggle, and organizations have not always acted honorably. Agreements can be a source of division and discord within communities. And they do not inevitably work as intended and can lead to unintended consequences. Equity stake agreements, in particular, can expose communities to significant financial risk and undermine the very autonomy and independence the agreement was intended to produce.

That said, industry nevertheless has a real opportunity to be a leader in contributing to reconciliation. MPAs represent one pathway to seize this opportunity. The work of the Conference Board of Canada’s Council on Corporate Aboriginal Relations, as well as recent research projects (Finding the Win-Win in Major Project Agreements: Lessons From Indigenous Groups and Industry Proponents and Working Together: Indigenous Recruitment and Retention in Remote Canada), demonstrate that when Indigenous groups and industry meaningfully and genuinely work together, certainty for all parties can be enhanced, business and job opportunities increased, community capacity strengthened, and objectives around self-determination and nation-building furthered.

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