Northern Gateway opens the door to economic opportunities for Aboriginal communities

As the largest infrastructure project ever undertaken between the two provinces, the proposed Enbridge Northern Gateway Project would bring economic opportunities to Aboriginal and non-Aboriginal groups across northern British Columbia and Alberta.

When it comes to providing new opportunities for Aboriginal communities, Enbridge’s proposed Northern Gateway Project promises to break new ground by providing an unprecedented level of long-term economic benefits.

Northern Gateway
Enbridge has introduced a ground-breaking Aboriginal Benefits Package to create local and regional economic opportunities and to foster long-term sustainability.

“We’ve tried to carefully consider inclusion of Aboriginal communities from an economic perspective in the short, medium and long term. The economic package we’re offering is multi-faceted and significant,” says Morgan Yates, Enbridge Northern Gateway Vice President of Aboriginal and Stakeholder Relations.

Currently the project is the midst of hearings led by a federal Joint Review Panel (JRP), established by the National Energy Board and the Canadian Environmental Assessment Agency. If approved, Enbridge will build the 1,170-kilometre twin pipeline from the Edmonton area to the Pacific coast. The pipeline will carry Alberta crude oil to the port town of Kitimat, B.C. for shipment to growing Asian energy markets.

As part of project consultations, the company continues to actively engage about 50 Aboriginal groups along the proposed pipeline corridor in Alberta and interior and coastal areas of British Columbia.

Yates says feedback from these outreach activities has helped shape a proposed economic package that could provide over $1 billion in economic opportunities to the Aboriginal communities.

“Communities have told us, ‘Don’t just focus on the transitory benefits of pipeline construction.’  They want to be able to access long-term revenues from the project. So, we’ve worked diligently to come up with an economic package that addresses that aspiration,” says Yates.

As part of what Yates calls the package’s “foundational element,” the company is offering communities an opportunity to take a share of a 10 per cent equity in Gateway. To encourage participation, Enbridge is structuring the equity so that Aboriginal groups can secure financing at favourable rates.

“We’re offering Aboriginal communities an opportunity to own a stake in the project and to share in the annual revenue it produces, right from the first year of operations,” says Yates.

So far, almost 60 percent of Aboriginal communities along the proposed route have accepted an equity position in the pipeline. Half of the equity units taken up have gone to groups in British Columbia, and the other half to groups in Alberta.

Yates estimates the equity ownership in total will generate about $280 million in net income to Aboriginal communities over the project’s first 30 years.

In addition to the equity offering, Enbridge has committed to hire qualified local workers, with Aboriginal people expected to comprise about 15 per cent of regional construction employment. Northern Gateway staff will work to identify direct and indirect employment opportunities for members of neighbouring Aboriginal communities. The company expects that combined employment, procurement and joint venture opportunities will reach about $400 million in value over three years during pipeline construction.

“We’re offering access to procurement opportunities in a substantive way. This will be governed by stringent, proactive Aboriginal participation plans that our prime contractors will follow closely,” says Yates. 

While the project is still in hearings (the JRP process is expected to finish in 2013, when the panel will make its recommendations to government), Yates and his staff continue to stay in close touch with Aboriginal leaders, updating them on the regulatory process and/or discussing potential economic opportunities. Recently, discussions have focused on investments in training.

“We’re looking at ways to connect Aboriginal communities to federal and provincial grants and ensure they can get training opportunities,” says Yates. “These are not exclusive to Gateway or pipelines. We believe that by investing now in building a more skilled, higher capacity regional Aboriginal workforce, Aboriginal people will be ready to participate in Gateway or other opportunities.”

Yates says that ongoing discussions between Enbridge and interested communities are also identifying other potential economic benefits.

“We’re starting to explore customized opportunities that might involve locating pipeline facilities onto reserve lands in order to position their communities to receive tax benefits. We’re also working to better understand the businesses and joint ventures that either exist in the communities or could be developed, and to see how they would fit with procurement opportunities,” says Yates.

To further awareness of pipeline benefits, the company is inviting Aboriginal leaders to an October 10 energy summit in Vancouver hosted by the BC Chamber of Commerce. The one-day forum will present a series of speakers and panels discussing the financial benefits, environmental challenges and community engagement for proposed oil pipeline projects in Western Canada.

“This will allow communities to see a broader spectrum of our industry,” says Yates. “We want to continue the dialogue on how communities might be able to participate in our project and how they might be able to work with different industry players.”

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