'People often ask what economic reconciliation for Indigenous Peoples looks like. This is it,' David Jimmie, president of Stonlasec8 and Chief of Squiala First Nation, said in a statement.Jennifer Gauthier/The Globe and Mail
A consortium of 36 First Nations is buying a minority stake in Enbridge Inc.’s ENB-T British Columbia natural gas pipeline network for $715-million in a bid to secure economic benefits from infrastructure that runs through their traditional territories.
Stonlasec8 Indigenous Alliance Limited Partnership will acquire a 12.5-per-cent interest in Enbridge’s Westcoast gas system, which extends to B.C.’s Lower Mainland from the northeastern part of the province.
Stonlasec8 has secured a $400-million loan guarantee under a program set up by Ottawa last year to ease the way for First Nations, Métis and Inuit peoples to gain equity stakes in major industrial projects. It is the first group to do so.
The partners are launching the alliance as increasing numbers of Canadians voice support for expanding the country’s energy infrastructure in the face of trade tension with the United States.
David Jimmie, president of Stonlasec8 and Chief of Squiala First Nation, said Indigenous participation is critical if Canada aims to build pipelines and other industrial developments.
Through ownership, Indigenous groups across the country are increasingly looking to share in the economic opportunities that such projects generate to move beyond the protests and legal challenges of past years that led to developments getting stalled.
First Nations and the country as a whole benefit from the money that’s generated remaining in local communities to invest in housing, health care, services for elders and other business opportunities, Mr. Jimmie said.
“For years, First Nations communities that haven’t been involved in economic development, or haven’t had own-source revenue, faced challenges of dealing with poverty,” he said in an interview. “Now as we see more success, you see that money staying within local economies and being spent.”
The 36 members of Stonlasec8 will garner equal shares of the returns generated from the Westcoast system after debt-servicing costs, and will have their own priorities for the money, he said.
The deal’s participants said they expect many more such transactions across the country. This one took two years to complete.
“Enbridge has taken the lead in developing partnerships and recognizing the impacts in territories. I think other industries are taking notice – there are other companies that are doing the same,” Mr. Jimmie said.
The Westcoast pipeline system runs 2,900 kilometres from Fort Nelson, B.C., to Huntingdon-Sumas at the Canada-U.S. border. It ships up to 3.6 billion cubic feet of gas a day.
Stonlasec8 declined to give details of its financing for the deal until it closes in the second quarter of this year.
This is Enbridge’s latest tie-up with Indigenous partners. In 2022, the company sold a minority stake in seven northern Alberta oil pipelines to a consortium of 23 First Nations and Métis communities for $1.12-billion.
Last year, the company and Six Nations Energy Development LP announced plans to develop a massive wind farm near Weyburn in southeast Saskatchewan known as the Seven Stars Energy Project.
It is having conversations with Indigenous groups about other potential deals as well, and government programs like the loan guarantees make more opportunities possible, said Cynthia Hansen, president of the Enbridge’s gas transmission and midstream division.
“So I think it’s an exciting time, but it’s going to require us to really have that focused support from the federal and provincial governments as we look to build out this infrastructure and really harness this incredible opportunity that’s in front of us,” she told reporters.
Canada Development Investment Corp. (CDEV), the federal agency in charge of the guarantee program, is in talks with other applicants as well. The timing of future announcements will depend on how advanced projects are and how prepared communities are to participate, said Elizabeth Wademan, CDEV’s chief executive officer.
The federal government in March doubled the amount of guarantees available under the program to Indigenous communities to $10-billion.
“Our intent is to be very active. It is to continue to work with nations and proponents on advancing forward applications, doing due diligence and structuring transactions,” Ms. Wademan said.
It is not the only federal agency supporting First Nation, Métis and Inuit investments. Last week, Canada Infrastructure Bank said it had surpassed $1-billion in funding for Indigenous projects and equity interests, and was set to announce more in the coming months.