Getting projects built during the pandemic: The continued importance of relationships with Indigenous peoples

Over the last decade, Indigenous consultation and participation have become vital to successful infrastructure development in Canada. The issues raised by the Wet’suwet’en Hereditary Chiefs in respect of the Coastal GasLink pipeline were frequently in the news in late-2019 and early-2020, for example. Though public attention has been directed elsewhere during the COVID-19 pandemic, Indigenous consultation and participation in infrastructure projects will be crucial to fast tracking any “shovel-ready” projects for development, a key element of Canada’s economic recovery. There is a substantial opportunity for proponents and Indigenous groups who are committed to meaningfully engaging in project development to capitalize on the economic recovery incentives in the COVID-19 context, and to bring projects to successful completion in a timely and cost-effective manner.

What you need to know

  • Indigenous peoples hold rights protected by section 35 of the Constitution Act, 1982 that must be considered as part of project development. In recent years, Indigenous consultation and involvement in projects have been a prominent issue on many infrastructure projects and part of the public discourse.
  • To spur economic recovery, the federal and provincial governments have rolled out various forms of economic stimulus, including in relation to infrastructure development. For example, in October 2020, the Government of Canada announced that $10 billion of the Canada Infrastructure Bank’s (CIB) $35 billion in funds will be made available for projects related to: a) clean energy generation, storage, and transmission between provinces and to remote and Indigenous communities; b) increasing broadband connectivity in under-served communities; c) agricultural irrigation; and d) electric vehicle charging.
  • The desire to fast-track “shovel-ready” projects makes meaningful consultation with Indigenous peoples even more important. Whenever a government permit or other measure may impact Indigenous rights, the duty to consult arises. Project proponents will need to budget time in the development schedule for the consultation process as early as possible and on an ongoing basis to ensure a meaningful two-way dialogue.
  • We increasingly see Indigenous communities more centrally involved in the successful development, construction and operation of infrastructure projects. A key corollary to successful consultation and engagement can be ensuring that Indigenous peoples share in the economic benefits of infrastructure projects—what is referred to by some as economic reconciliation. There are various means by which this can be achieved, including equity participation and employment, training and procurement opportunities as well as the more traditional means of benefits and royalty agreements. These measures may serve to align interests in a manner that minimizes risk and accelerates project development on a path to successful completion and operation.

Discussion

Consultation during the pandemic

Whenever a government permit or other measure may impact Indigenous rights, the duty to consult arises. What is required depends on the context, chiefly the scale of potential impacts on Indigenous rights.

Though the duty to consult is held by the Crown, the conduct of consultation is often delegated in whole or in part to a project proponent. To take advantage of the opportunity presented by the current desire to fast track “shovel-ready” projects, a proponent will need to plan its consultations from an early stage. Below are some fundamental principles that, in our view, underpin successful consultations:

  • Know who the potentially-affected Indigenous communities are, and their current situation. In the context of COVID-19, this includes understanding particular public health circumstances arising from the pandemic (virtual meetings and correspondence may play a greater role), and any additional resource constraints that the group may face as a result of resources being devoted to COVID-19 response.
  • Take the time to understand each Indigenous community’s objectives, and how those objectives can be met, in a manner responsive to the specific context of the Indigenous community, rather than through generalized measures.
  • Ensure a meaningful two-way dialogue aimed at minimizing the impacts of the project on each Indigenous community and their rights.
  • Pay close attention to the individuals involved in consultations on behalf of the Indigenous community (i.e., Elders, elected Chief and Council, hereditary leaders, economic development officers, land users, etc.) and the government (i.e., Ministers/political staff, civil service).
  • Work closely with the relevant government authorities and Indigenous communities to address the most difficult issues.
  • Build relationships with potentially-affected Indigenous communities based on mutual respect and trust, that will span the life of the project. Those relationships will benefit the project most in the long term.
  • From the perspective of a proponent, recognize that certain projects will not garner support from some Indigenous communities, and be prepared to understand the risks of proceeding in that circumstance and the criteria for walking away from the project.

Economic reconciliation

Project proponents and Indigenous communities may want to consider various forms of Indigenous economic participation in a project. Opportunities may arise to partner with Indigenous communities which are eager to place themselves in a position to benefit from the economic recovery and related government initiatives. This can complement and assist the consultation process, as the Indigenous community will see that the project will benefit them, thereby aligning interests. It also helps to ensure that Indigenous communities benefit from Canada’s economic recovery.

Economic participation may take a variety of forms. A proponent may consider Indigenous employment and procurement opportunities on a project, and/or benefit agreements providing funds to the Indigenous group (either as a one-time payment or payments made over a number of years) that may be used for initiatives of their choice.

A proponent may also consider royalty payment structures, or an equity partnership with one or more potentially-affected Indigenous communities. The latter can be structured directly or through an Indigenous-led special purpose vehicle (see for example, the Wataynikaneyap Transmission Line Project). These structures are becoming increasingly common, and generally assist in garnering support for the project and benefiting nearby communities.

These approaches may minimize the risk of a challenge to the validity of permits, which even if unsuccessful may cause significant cost and delay to the project. Consideration should also be given to dynamics between the Indigenous group(s) that a proponent enters into an agreement with and potential impacts on consultations with other Indigenous groups.

A focus on meaningful consultation with potentially-affected Indigenous communities, and exploring opportunities for economic participation in the project, may take some additional time in early stages. Ultimately these tools are more likely to align interests in a manner that minimizes risk, and builds robust relationships that can support project development through successful construction and operations phases. These tools can be important in making a project truly “shovel ready”.

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

© 2020 by Torys LLP.
All rights reserved.

Tags:

Get in Touch