Canada Faces Indigenous Opposition Over Study of Pipeline Stake

(Bloomberg) -- Efforts by Canada’s government to hire a firm to do a financial analysis of its Trans Mountain pipeline on behalf of Indigenous communities have rankled at least one of them in British Columbia.

“It’s a joke,” Chief Mike LeBourdais, head of the B.C.-based Western Indigenous Pipeline Group, said in a phone interview about the tender contract. “They are going to advise the Indians on whether buying a pipeline is good or not.”

The government issued a tender notice late last month for a Department of Finance contract “to support participating Indigenous groups in making informed decisions about participating economically in Trans Mountain and participating in the Department’s engagement process,” according to the Dec. 23 document, which was updated this week.

At least three groups of Indigenous communities in British Columbia, Alberta and Saskatchewan have banded together to buy a stake in Trans Mountain from the government, which bought the Alberta-to-B.C. pipeline for $3.5 billion in 2018. The pipeline was nationalized to keep a project to expand the line alive after Kinder Morgan Inc., the original owner, threatened to scrap it amid fierce opposition in B.C.

Prime Minister Justin Trudeau’s government has said it will sell its ownership once the expansion is completed and de-risked and is open to “Indigenous economic participation” in the line. Two years ago, the finance ministry started an engagement process with First Nations communities on economic participation and “nearly all” of the 60 Indigenous groups that participated indicated that additional financial information was needed as a precondition, according to the notice.

Building Consensus

The Western Indigenous Pipeline Group is already working with bankers for its plans, LeBourdais said, adding that he sees little benefit in the government’s proposal. “I have people working in the field drawing up cashflows,” he said.

The finance ministry said it couldn’t immediately respond to an email seeking comment.

The government said it seeks to build consensus on the form of economic participation preferred by the communities and to identify or support the formation of “counterparties” that could represent them in a future negotiation with Canada, according to the tender document.

Construction on the Trans Mountain expansion began last year after more than a decade of court battles and delays caused by opposition from groups including many First Nations in B.C., which see the line as a threat to the environment.

Alberta’s oil-sands producers have struggled for years with a shortage of export pipelines and see the line as crucial for getting their crude to markets in Asia. Some in the oil industry argue that indigenous ownership is a way to both lessen opposition to pipeline projects and provide financial help to those communities.