Torys Business Brief: Tapping Canada’s infrastructure potential to rebuild the economy—and its relationship with Indigenous peoples

Torys Business Brief focuses on key issues and actionable knowledge for businesses to emerge from the COVID-19 crisis resilient and well-positioned for the future. Each episode of Torys Business Brief features in-depth, accessible interviews with Torys lawyers, moderated by Munk Debates convener Rudyard Griffiths. These episodes are accredited for CPD purposes.

A spotlight has been shone on project development in Canada as a potential instrument of post-crisis economic renewal. In this episode, partners from across the firm speak on how the pandemic has brought projects in Canada to a turning point, and how government, industry players and Indigenous communities can work together to rebuild Canada’s economy.

Infrastructure partners Mark Bain and Tara Mackay discuss the scope of challenges in a new environment where investor risk appetite has shifted: how will projects be prioritized and financed; and what models and structures will be used to deliver them? Partners Valerie Helbronner and John Terry share their thoughts on the changing nature of projects with Indigenous involvement, and how an influx of projects during recovery presents an opportunity to advance the goals of reconciliation with Indigenous peoples in Canada.

A full episode transcript follows.

Rudyard Griffiths (00:02): Hello, and welcome to Torys Business Brief. My name is Rudyard Griffiths. You may know me as the convener of the Munk Debates where we bring together some of the world’s sharpest minds and brightest thinkers to debate the big issues of the day. As the host of Torys Business Brief, my role is to provide you, the listener, with compelling conversation about the legal challenges that COVID-19 pandemic presents for businesses and business leaders.

RG (00:30): We’re all taking stocks of the ongoing effects of the pandemic. As the world continues to respond, businesses have wide ranging issues to consider. This podcast will equip you with actionable knowledge your business can use to emerge from the current crisis, resilient and ready to thrive. To do this, I’ll be drawing on the expertise and insights of the lawyers working at the firm named Corporate Law Firm of the Year by Chambers and Partners, Torys LLP.

RG (01:28): On today’s Business Brief, we talked to Torys Toronto partner, Mark Bain, and Torys New York partner, Tar Mackay. They’ll provide their thoughts on project development in the future of infrastructure projects, both in Canada and the United States, after COVID-19.

RG (01:46): Mark Bain is one of Canada’s leading infrastructure and project finance lawyers and is also the chair of The Canadian Council of Public-Private Partnerships. He is the head of Torys Public Private Partnership Practice and co-head of the firm Infrastructure and Energy practice. Mark has acted on more than 80 major public-private partnership transactions within industries as diverse as healthcare, power, telecom, education and justice, among others.

RG (02:15): Tara Mackay’s practice focuses on corporate and commercial transactions and major capital projects, including public-private partnerships. She represents private developers, public authorities, lenders, construction contractors and service providers in all aspects of the implementation of large-scale infrastructure and similar projects.

RG (02:37): Mark, Tara, welcome to Torys Business Brief.

Tara Mackay (02:41): Thank you.

Mark Bain (02:42): Thank you.

RG (02:44): I’m really looking forward to our conversation with you about infrastructure because this is going to be a big part of the post-COVID-19 recovery. Set the scene here a little bit for us. And Mark, maybe I can start with you. Why do you think there has been, even pre-COVID-19, but especially over the last couple of months, a really renewed, almost laser-like focus, especially in the part of government, on infrastructure as part of the post-COVID-19 strategy for economic recovery?

MB (03:16): Sure, happy to chime in. So, I would say the history of infrastructure in Canada mirrors that really in many countries across the world that there were major periods of infrastructure investment, post-wars, and things like that. And those were recovery style programs, but we had a bit of a lull. We had two or three generations’ worth of infrastructure not being built and going to the bottom of the pile. And that has started to hurt economies.

MB (03:43): It made people realized, if you can’t get around, you can’t get goods to market, your economy is going to falter. So, there’s been a renewed enthusiasm for infrastructure in Canada and worldwide over the last 10 years or so. And I think programs have started to mobilize. Markets got a lot more momentum. The rise of the public-private-partnership market has been good for that in terms of getting infrastructure projects to market and get them financed, think about the long-term aspects.

MB (04:11): And we’ve had sustained momentum I think across Canada over the last 10 years or so in delivering projects that way. I think what has happened with COVID, we’ve eliminated some of the underlying problems even though we’ve had good momentum. We need to figure out how to get projects to market faster. We need to shift our focus a little bit for things that have proven to be critical during COVID, healthcare, infrastructure, telecommunications or broadband infrastructure, that sort of thing.

MB (04:40): And I think coming out of COVID, we’re likely to see the same sorts of things we have seen when prior programs have been rolled out to try and mobilize the economy, to try and stimulate economic activity. So, I think we will see certainly as part of the coming stimulus program once we get after the stabilization of health and people’s personal welfare, I think attention will quickly turn to infrastructure as an ideal candidate for economic stimulus.

RG (05:08): Thanks, Mark. And Tara, when it comes to you in talking with your clients who are either engaged in infrastructure projects right now or contemplating them, or either funders, builders, or government, they are in the background, so critical to regulatory approval. What are some of the top of mind issues that you see are new in those conversations now that we are in the post-pandemic phase of discussions around infrastructure versus the types of conversations you were having late 2019, early 2020?

TM (05:43): Yeah. I mean, I think everyone right now is trying to figure out how to allocate risk related to this pandemic and future pandemics both in projects that are currently underway and projects that are in the procurement phase. So, certainly, there have been many claims launched. And the public and private sector are discussing how to deal with the current impacts of COVID on construction projects, on projects that are in operation.

TM (06:20): Trying to figure out for projects that are in the procurement stage, how to deal with new concerns raised by the lenders related to COVID. Certainly, there’s been disruption in the project finance markets, changes in pricing, hesitancy on the part of funders to move forward without additional protections related to COVID. And naturally, I think governments are pushing back a bit on taking the entirety of the risk.

TM (06:53): So, I think right now, there are a lot of conversations happening again, both on purpose projects that are underway and on projects that are in procurement as to how the parties can equitably deal with the impacts of this pandemic.

RG (07:09): Great insights, Tara. Mark, Tara brings up something interesting here for us to dig into a little bit, which is a cart and horse problem that it’s clear is going to emerge after this pandemic: that the balance sheets of municipalities and provinces have been hardest hit, very significant deficit spending underway, potentially long-term impairment of those municipal and provincial balance sheets. That leaves the federal government as the critical player here and future infrastructure projects.

RG (07:43): Yet, these projects do have to unfold in that municipal-provincial context. That’s where the regulatory authority is often embedded and where the challenges around approval and the interlinkages between infrastructure goals and policy hit the proverbial road to speak. What’s your feelings about how that conversation is going to play out in the months and now years to come?

MB (08:10): I think it’s a great point. And I think it’s going to unfold probably faster than people are ready for. I think you’ve identified properly that we have a bit of a conundrum that most of our infrastructure assets, at least in the Canadian marketplace, are owned and operated, and regulated at a municipal level, then the provincial, then the federal level. Most of the infrastructure is not federal, but the financial capability of those governments is really in the reverse order.

MB (08:39): And you’re quite right, the municipal finances are severely strained right now. Province is also very strained, and the federal government, although strained, has more room to move than others. I think what we’ll see is some permutation of rules of moving around a little bit. And the conundrum of the money being in the wrong place or the money being in a place that is mismatched with the asset, has been there for little while.

MB (09:01): I think if I was to enter a superset of your question, I think the private sector has tons of capital that is very enthusiastic about this area. And it hasn’t always been deployed very well either. So, we’ve got enormous pension funds, for example, keen on the sector, but we can’t find a place to invest. So, I think the conversation is both intergovernmental, and as between private and public sector, are going to reveal some new or altered model for the times ahead for financial capacity is, in some way, released to be deployed where it’s most needed, which is at that municipal level.

MB (09:37): We may also see a little bit of a shake-up of statutory powers for municipalities to run deficits or to borrow, to invest in different ways. But in some way, we have to leverage the available resources where the needs are in a way that isn’t perfectly matched right now.

RG (09:55): Thanks, Mark. And Tara, let’s go to you for some insights into what Mark just mentioned, a critical piece here, which is private investors and the extent to which capital is going to have to come in this fiscally-restrained environment post-COVID from these large private institutions, pension funds and others. What do you see out there in terms of maybe either a changing mindset or specific policy changes that could occur, that might help private investment take a larger share of the infrastructure spend in Canada in the coming years?

TM (10:35): Yeah. I think as Mark mentioned, there’s really huge appetite for investment in infrastructure in the private sector. In fact, there’s way more money available than there are good projects available. So, I think what the private sector is going to be looking for in the months and years to come is for the government to bring to market a lot of good quality projects. I mean, there’s going to be a natural tension. I think the private sector is going to shy away a bit from revenue-risk projects, for example.

TM (11:16): They’re going to be looking for safer availability-based projects. The government is going to want to do more revenue deals, more user pay deals because of their limitations. And so, I think we’re going to see some tension there. But I think the private sector is really going to be looking for the government to bring forward these good quality projects that have stable cash flows. And I think, as Mark mentioned, there is tremendous amounts of capital available to invest in this space, but it needs to be in the right projects.

RG (11:58): Mark, let’s go a little bit deeper on that because it is fascinating conundrum. The user pay model is, again, as Tara mentioned, a very attractive model to investors because of the stable revenues. But historically in Canada, we’ve really seen politicians and governments struggle with this idea of user fees to access infrastructure. And I’ll just portray my own bias here, I think we need to grow up a little bit on this, frankly, if you look at the United Kingdom, the United States, where user pay is much more common.

RG (12:32): Do you think Canada could finally get over this hurdle and understand? Actually, there are a lot of public policy goods that come out of user pay in addition to stable revenues.

MB (12:43): I think it’s inevitable. We’ll have to have this adult conversation you’re talking about user pay. And it’s very interesting to see the divide in the Canadian marketplace. I mean, we’re very high emphasis on social networks for things like healthcare and education. We’ve seemed to be totally understanding on things like people paying costs for power and telecom, and things like that. So, we’ve got divided models of the regulated utility on one side where people are quite happy for user pay and just think that’s the right way to do it.

MB (13:15): And then, totally free at point of care. I think as we desire more infrastructure and government’s balance sheets are more fiscally-constrained, I think it’s inevitable. We have to look at some different type of user pay or revenue-risk projects. An example might be one of the things that we’re seeing in the current market is outside major urban areas, broadband is not very good. Because if you leave it totally to the private sector, they just don’t go where there’s no density in order to enable traffic, and government doesn’t do that either.

MB (13:50): So, there are some orphans if you like in the Canadian market that probably can only be served by some combination of public sector, private sector involvement, some aspect of user pay. And if it’s not completely feasible on a cost recovery model to build infrastructure, we should recognize that we already have things like our water system where there’s usually some taxpayer subsidy, and the user does not pay full cost.

MB (14:17): And it may be that we end up with the kinds of joint ventures that haven’t existed before where there’s a more collaborative approach to getting stuff built where it’s needed, where there is some revenue, and where it’s not totally self-financing. And on that, maybe I’ll note the Canada infrastructure bank set up a few years ago had exactly this goal in mind, to find projects that were revenue-generating but not to an extent that they’re completely self-financing, and to bring them to market.

MB (14:46): So, I think one of the instruments we’ll see for the federal government coming out of this is an emphasis on enlivening the bank to actually deliver more convincingly, more frequently, and at a larger scale on that mandate. They’ve had to bring more revenue-producing projects to market even if they’re not completely standalone like a regulated utility might be.

RG (15:08): Tara, what’s your view on the Infrastructure Bank? I mean, Michael Sabia, the former head of Caisse de dépôt, someone who knows a lot about investing, and the investing needs and requirements of large pension funds, has taken on recently in fact during this pandemic, a leadership mandate from the Prime Minister around the Infrastructure Bank. Does that make you optimistic about what this bank might do? I mean, up to this point, it’s been a bit slow in terms of the promises that were made versus the projects that have been funded.

TM (15:43): Yeah, I am optimistic. I mean, I think the bank, as you say, has been slow to get set up, to get moving, to find projects to invest in. I think this pandemic may, in a strange way, be an opportunity for the bank to get more involved in supporting projects that will help Canada recover from this pandemic. And so, I do have some hope that the bank is going to be able to find its feet and find some projects to support.

RG (16:24): Great. Well, look, we’re coming up to the end of our time together. I just want to give you both an opportunity. Mark, I’ll just start with you, just one or two key points you want to leave listeners with. If they’re going to try to understand the role and importance of infrastructure going forward, and maybe particularly where the work that you do at Torys could be relevant to helping them understand these opportunities and potentially participate in it.

MB (16:53): So, I think the times are interesting because I think what we’re going to see is a bit of a pivot point. I think the role of infrastructure and sustaining economies, particularly during and coming out of a pandemic, I think is going to be increasingly seen as critical. So, we’ve got to figure out a way to get it done. I think the way in which we get it done is the area that the lawyers spend some time on project structuring and trying to invent new ways of doing things, and to try and catch up with the times.

MB (17:23): And I think the times, from my point of view, are our pivot point, times where I think we’re going to change from seeing infrastructure as spending to seeing infrastructure as investment. And I think that has tremendous possibilities for bringing out new and creative ways of delivering the things that we think are so important.

RG (17:42): Great, Mark. Thanks. Well, final word to you, Tara. What do you want to leave the listener with in a sense of opportunities but maybe also challenges too? And what particularly are you able to offer clients who are interested in engaging on infrastructure questions and who want to understand more about this space?

TM (18:08): Yeah. I think there are going to be tremendous opportunities over the near term for infrastructure investors, in particular those who are willing to be a little bit more creative and come to the table with solutions to try to help government figure out how to get these projects done. So, I think we’re going to need to see a lot more collaboration between public and private sector players. I think we’re also going to see new asset classes become much more important.

TM (18:50): Up until this point in time in the U.S., for example, there’s been a lot of activity in the airport space and in secondary education. I think we may see in the short term, a shift away from those projects to different types of projects that may be more appropriate as economies look to recover from this pandemic.

RG (19:14): Thank you, Tara. Thank you, Mark. This has been a great conversation, informative, nuanced. And I’ve certainly learned a lot. So, thank you both for your time today.

TM (19:24): Thank you.

MB (19:25): Thank you.

RG (19:27): Hi. Thanks for listening to Torys Business Brief. For more information on how organizations and business leaders should be addressing the challenges of the COVID-19 pandemic, visit torys.com. Here, you’ll find a wealth of in-depth resources featuring the analysis and insights of Torys lawyers. Again, that website is torys.com/covid19.

RG (19:53): Welcome back to Torys Business Brief. Let’s now pivot this conversation and speak with two Torys lawyers who are experts in Indigenous law.

RG (20:01): Valerie Helbronner and John Terry will share their perspective on the pandemic’s impact on Indigenous communities in relation to project development.

RG (20:12): Valerie Helbronner an infrastructure project lawyer with specific expertise in managing large, complicated, multi-party projects with novel issues. She has led some of Canada’s most innovative and complex power projects spanning over several years on behalf of a range of project participants, including Indigenous groups, project proponents, lenders, investors, contractors and governmental authorities.

RG (20:39): Valerie’s recent experience notably includes acting for numerous years as the lead project counsel to Wataynikaneyap Power, a partnership of 24 First Nations and Fortis, all on matters relating to the development and financing of the $1.9 billion Canadian Wataynikaneyap Transmission Project in Northwestern Ontario.

RG (21:03) John Terry is a civil litigator who has appeared as counsel at all levels of court in Ontario, the Federal Court, and the Supreme Court of Canada. His practice focuses on public business and international trade and investment law. John has significant practice in Indigenous matters with extensive experience in Indigenous negotiations and advising project developers and lenders on issues respecting the duty to consult with First Nations. Valerie and John, welcome to Torys Business Brief.

Valerie Helbronner (21:36): Good morning.

John Terry (21:37): Thanks very much.

RG (21:38): An important conversation that we’re going to have for the next 20 minutes or so, and it’s about the impact and the responsibilities around Canada’s Aboriginal communities and infrastructure development in the country. We knew going into this pandemic that this became an issue of truly national concern with a variety blockades in Canada. And now, we’ve had a pandemic. And just in a conversation with your partners, had a sense of really the importance of infrastructure to the economic renewal agenda that the country is going to face in the months and years to come.

RG (22:17): So, I think the ability to spend a bit of time with you to try to square these circles between the interests and objectives, and responsibilities that Canadians have towards First Nations people and the economic objectives, the economic priorities that have been placed on infrastructures, again, one of the key planks in the post-COVID reconstruction agenda.

RG (22:43) So, Valerie, maybe to start with you just to set the scene for us. I mean, what have you seen in terms of the impact of the pandemic on the involvement of Indigenous communities in infrastructure development projects and construction in Canada right now?

VH (23:00): Yeah. Sure, Rudyard. I think it’s interesting to the way you put it of squaring the circle, and I think certainly from John’s and my perspective, that’s absolutely achievable. And these don’t need to be mutually exclusive goals in terms of economic development and engagement of Aboriginal communities. Of course, the involvement of Indigenous communities in the successful development, construction and operation of infrastructure projects, has been taking on an increasingly vital role in our country since before the pandemic in terms of COVID-19 itself.

VH (23:36): It’s critically important to appreciate the particular sensitivities amongst Indigenous communities about infectious diseases. Contact with European settlers and subsequent settlements, as many people may know, brought with them various diseases that Indigenous people had not been exposed to, including smallpox, measles and influenza. And the result was really devastating. And you feel that result is still felt in the communities today.

VH (24:05): So, when you bring in a new pandemic, there’s these increased sensitivities to the results of pandemics. And of course, the leaders in Indigenous communities as they are in all communities, and globally, are dealing with the challenges faced by the pandemic. But some of those challenges can be even more acute in some of our Indigenous communities, particularly those ones that have housing crisis situations, poverty situations and remote communities.

VH (24:36): So, I think it’s fair to say that as a result of this, this has affected the pace of engagement with Indigenous communities on the development of infrastructure projects since the pandemic began.

RG (24:50): Thanks, Valerie. Yeah, that is a really vital and important insight, one that I hadn’t thought about, the extent to which a pandemic to Canada’s First Nations people in some ways represents something different. It has a deep historical memory and echo into some of the darkest chapters in their collective history. So, thank you for reminding us of that.

RG (25:14): John, talk about reminding us of things. I think it’s important to just summarize a little bit for the audience, we all benefit from this. Why Indigenous involvement and participation in infrastructure projects is so important in Canada, and the extent to which it’s now legally and regulatory frameworks hardwired into how many of these large initiatives now have to think about, how they unfold, how they’re planned, who’s involved, the timescales. A whole bunch of important issues that now have a clear Aboriginal lens that they need to be viewed through. Why is that?

JT (25:55): Well, Rudyard, I mean, one of the key factors is of course that many, many of our big infrastructure energy projects are in the north, in rural Canada, and in areas in which there are many, many First Nation communities or First Nations have rights and particular interests in those communities. And what’s happened, and this all stemmed from an important court decision a couple of decades ago, is that there is a requirement, a constitutional requirement, for governments when they’re making decisions about projects that are impacting areas in which First Nations have rights or asserted rights and interest.

JT (26:45): There’s a requirement that they consult with those First Nations. And that’s led to a lot of case law over the past few decades. A number of cases is going right to the Supreme Court of Canada. And those really delineated what’s required in those cases, and it’s clear. And it’s become a key part of infrastructure and energy development now that you need to look at the Indigenous interests in the area. You need to engage with those communities and the representatives of those communities.

JT (27:16): And that includes not just First Nation communities, but in many cases, Métis community as well, and of course in the north, the Inuit. And all of this has meant that for resource projects, and part of this planning, it’s crucial that this would be done right, which means engaging with communities early, approaching them in a respectful manner, ensuring that they have the capacity to engage with the project developer and with the government, and ensure there’s sufficient time for all of this to happen.

JT (27:59): Together with duty to consult, there’s important old legal concepts around the honor of the crown which go back to treaties that are a couple of centuries old in terms of how the Federal Government in particular, the obligation to those to Indigenous peoples, and their treatment of them. And then, more recently as you know, there’s been more and more focus on reconciliation and what reconciliation means.

JT (28:25): And a big part of that just mean economic reconciliation, which of course means bringing First Nation communities, Indigenous communities into the actual project itself, and seen for example, whether there can be equity or other interests in that project. So those are some of the reasons why involvement of Indigenous peoples in Canada has become so crucial in our infrastructure and energy projects.

RG (29:21): Let’s try to quantify this discussion a little bit because I think the issue that our listeners will be most familiar with in terms of how these constellations of challenges and priorities, and legal responsibilities can crystallize, is the Trans Mountain Expansion Project, which has been on the front page of newspapers for well over a year now in terms of issues around Aboriginal consultation involvement. You both have been involved in the reinitiated Aboriginal consultations that were undertaken by the Federal Government on Trans Mountain.

RG (30:00): What’s your sense coming out of those discussions? I mean, should we be concerned that projects like Trans Mountain are, once again, setting a bar too high in terms of Aboriginal involvement that will lead to either authority development or development that really can’t get to market in time in the way that suppliers and others need it to? Or do you think we’re striking a new and important balance that is able to accommodate economic interest with Aboriginal consultation?

JT (30:36): Perhaps I’ll jump in first, and Valerie may want to add some comments. But certainly, the Trans Mountain, which we’re involved in, was a pretty unique project in terms of the level of government engagement and the number of Indigenous groups that were engaged in the reinitiated process that was done over the past year or so … close to 130 different Indigenous groups. And we certainly have been hearing from our clients, Rudyard, that, “Hey, does this mean we have to do the Cadillac version of... the government has this Cadillac version of consultation every time we want a resource project?”

JT (31:16): And I think the way we see it is that, particularly if we look at the Federal Court of Appeals’ decision that found, and this goes back to December of this past year, with the decision in the court in January, found that consultation had been adequate and appropriate. But also, went out of its way to make some general statements, which are key statements to bear in mind in terms of consultation efforts going forward.

JT (31:52): The court emphasized that consultation doesn’t have to be perfect. The key is that it’d be reasonable. The court emphasized that there’s a mutual process that’s involved here where Indigenous communities need to engage with good faith efforts on the government’s part to reach out, and that there can’t be unreasonable delays to try to work projects. And the court also emphasized that it’s not a veto. The consultation doesn’t give Indigenous peoples an ability to veto projects.

JT (32:33): Certainly, there are some instances where projects may have such a crucial effect on Indigenous territory. For example, we are involved in an OPG project involving nuclear waste depository for low level and intermediate waste in the Bruce Peninsula area. And that was a situation in which OP(G) said, “We’re not going to proceed with this project if the First Nation doesn’t agree.” But that’s a very unusual circumstance.

JT (33:05): And our perspective certainly is that there are processes available if it’s important for governments and project developers to work closely together in ensuring that the consultations will be carried out appropriately. But if all of that’s done, there’s certainly room just to develop projects and to comply with these constitutional obligations.

VH (33:28): Yeah. I would just add to what John is saying, and I agree with it. And one just has to remember in terms of the Trans Mountain situation of course as you say, Rudyard, there’s the headlines. But then, there’s lots of details behind it. The Federal Court of Appeal decision that John is referencing is of course the helpful decision towards the end of the process of the judicial review of the reinitiated consultation process.

VH (33:53): But before that, there was a Federal Court of Appeal decision that had found some issues with the consultation that had been done. And that was what had led to the reinitiated consultation. And it’s really important to look at that decision because that decision was very clear that there were just certain key elements of the consultation that needed to be fixed and addressed. It wasn’t that the whole process was problematic and that everything had to start from scratch.

VH (34:19): Rather, that some key elements had to be addressed. So, the other thing that we focus on when we’re talking with folks about it and its industry clients, its Indigenous clients and its government, is that it goes back to the basics of what John was saying in the first instance, which is, what is the duty to consult rooted in? It’s rooted in a real desire to have a meaningful two-way dialogue, a meaningful two-way dialogue, that’s rooted in respect and a desire to create trust between the parties.

VH (34:54): And I think certainly from my experience, there are a number of projects that have occurred and are occurring in the country today that are a direct result of a robust and properly executed consultation process. And I think what Trans Mountain shows is that when things go wrong, they can sometimes go very wrong and cause a lot of problems that could have been avoided if some of those first principles had been taken into account early on.

RG (35:29): Thanks, Valerie. John, I mean, some listeners may be wondering, has the pandemic had a material effect on the responsibility of governments and corporations to enact the principles and behaviors of the duty to consult? Is that something that’s been suspended or is it ongoing?

JT (35:52): The duty to consult certainly is not suspended during the pandemic. And to the extent to which projects are moving forward during this period, everyone has to bear in mind that the obligation to consult is still there. And that courts will certainly expect both the project developers and governments to comply with it. Some prominent provincial governments have expressly addressed the impact of COVID.

JT (36:23): B.C. and Alberta, for example, have policies that come up with alternatives or suggest alternatives that can be used for example instead of in-person meetings, we have virtual meetings, and those approaches. The thing that’s important to keep in mind though for people who are engaging in consultation with Indigenous people over this period is that, as Valerie was saying, in answer to your first question, you have to ensure that you’re giving respectful space for First Nation communities to deal with the capacity issues that arise because of the pandemic and the effects of the pandemic on their communities.

JT (37:10): And it’s quite reasonable to think that just like in other areas of the economy, duty to consult and fulfilling those duties is going to take a little longer than it normally would.

RG (37:21): Thank you, John, for reminding us of those important points. I think that’s a good segue, Valerie, to come to you to say, beyond the duty to consult, through hard-won experience, you and John have learned some lessons about what the other successful elements are of collaboration and partnership with Canada’s First Nations peoples when it comes to big infrastructure projects. So, I think it’d be helpful for our audience for you to go through some of those for us so we can understand just what they are and why you think that they’re vital to successful collaboration.

VH (38:03): Sure. Well, yeah. As John said, the duty to consult is obviously rooted in the constitutional obligation, and it’s not suspended during this time of emergency. From our perspective, we think that there’s a real opportunity here as governments and project developers, and others look to the opportunities there are with the economic stimulus and incentives. That there’s a real opportunity for those players who participate with and engage with Indigenous communities in a meaningful way.

VH (38:40): A lot of the focus has been on shovel-ready projects. What we would say to that is, even shovel ready projects of course have to ensure that there’s been meaningful engagement with Indigenous communities in order for those projects to come to completion. So, it comes back to some of those core principles, which on the one hand seems basic. But on the other hand, I think is quite reassuring because it shows that there’s a path forward, which is again, knowing the communities that you’re engaging with, understanding what the realities of those communities are, including the realities of COVID in those communities, what resource constraints they might have. As John referred to, what capacity constraints they might have, what objectives they currently have for their communities as a whole and in the context of COVID. And how they’d like to see themselves getting involved in projects, including in respect of economic reconciliation as John referred to before in terms of ensuring that the benefits of the economic recovery that’s going to come from the stimulus plans, flows to the Indigenous peoples of the country.

VH (39:55): So, I think that governments and developers who are looking to get these shovel-ready projects up and going quickly for the stimulus need to be very focused on those issues. And the ones that I think are focused on those issues will find that their projects do come to fruition in a way that works for everybody.

RG (40:17): Thanks, Valerie. John, I want to give you the last word. And maybe if you could just prognosticate for us a little bit. We went into this pandemic with an important national conversation underway about the involvement of First Nations people in large scale infrastructure projects. We’ve now had the experience of the pandemic, as Valerie rightly points out, in some ways especially acute for many First Nations peoples.

RG (40:46): What’s your sense of where the relationship goes from here? Is this a chance to reset? Do some of these issues just simply not go away and we have to acknowledge that we’re going to have to work through them, and it’s going to be challenging at times?

JT (41:02): My perspective is that there’s a real opportunity here. One of the reasons is of course, through the pandemic, we’ve seen the effect. Although thankfully, many Indigenous communities have been spared the effects of the pandemic. The realities that we’ve seen is that the pandemic has hit certain less-resourced communities more deeply than other communities. And I think it’s been a lesson to all of us about the need to help to narrow the gap between our communities. And in particular to improve, infrastructure and other services in our Indigenous communities.

JT (41:44): And of course, to involve them in economic development. So, I think if anything, there will likely be a renewed appetite I think among all sectors of Canadian society to restart the conversation and to really put some serious effort into involving Indigenous communities, both in the economic side in terms of economic participation in a number of these resource projects. And also, in targeting infrastructure projects at the particular needs of Indigenous communities because there are many.

JT (42:16): So, I really see this coming out of the pandemic, and as governments look to see where the focus should be in terms of infrastructure spending that there are big opportunities here to continue the reconciliation project.

RG (42:32): Well, John, Valerie, thank you for this conversation. And thank you for your important work. We need to get this right. There is going to be a large demand for new infrastructure projects. And we need to ensure that not simply that we’re compliant with the law but that we embrace the spirit of our treaties with our First Nations people with the constitutional law that has been created, and that we move towards as you say, all of this in some spirit of reconciliation that really involves them as coequals, as real stakeholders in the future economic success. Not only their communities but the country as a whole.

RG (43:12): So, Valerie, John, thank you for coming on Torys Business Brief today.

VH (43:16): Thank you.

JT (43:17): Thank you, Rudyard.

RG (43:28): Well, that wraps up this episode of Torys Business Brief. You can read more on some of these issues in the piece, “Federal Court of Appeals Upholds Approval for the Trans Mountain Expansion Project”. You can find this piece by visiting torys.com/insights. On our next podcast and the final podcast for this series, we will speak with Torys partners, Darien Leung and Amanda Balasubramanian, who will discuss the state of the lending market in the wake of COVID-19 from both a Canadian and U.S. perspective.

RG (44:29): Thank you for listening to Torys Business Brief. I’m your host, Rudyard Griffiths.
 
 

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Written Materials:

• Federal Court of Appeal upholds approval for the Trans Mountain Expansion Project

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