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Indigenous loan program a step forward

The Trudeau government has another key climate policy decision on its plate, but this time it collides with Indigenous reconciliation, another of its signature policies.

A multibillion dollar loan program to allow Indigenous entrepreneurs to buy equity in resource projects is about to be unveiled, perhaps as early as Finance Minister Chrystia Freeland’s economic update on Tuesday. For the Liberals, the question is whether loans would be available for oil and gas projects — or whether limiting loans to only other cleaner resource projects would be another, unnecessary roadblock to Indigenous economic self-determination.

The climate file has become a liability for the government. A three-year pause on carbon pricing on home heating oil predictably gave rise to demands for relief on all home heating methods across the country and played into the hands of Conservative leader Pierre Poilievre. The prime minister and his environment minister, Steven Guilbeault, have vowed to hold the line with no more carve outs, but a private member’s bill awaiting Senate approval would remove the carbon price for farmers who use natural gas or propane to heat buildings or dry grain. Now comes the Indigenous loans program and the competing imperatives of phasing out fossil fuel subsidies and facilitating self-determination for First Nations. Canada’s Indigenous population is younger and growing faster than the population as a whole, but almost 12 per cent live in poverty and their unemployment rate is significantly higher than the rate across the country. Accessing capital is more difficult. Because of the Indian Act, land or property cannot be used as collateral for loans.

A national loans program would move beyond what is available under the federal infrastructure bank and build on the success of Indigenous loan programs in Alberta, Saskatchewan and Ontario. The Trudeau government has long promised to phase out fossil fuel subsidies and a loan program would normally fall into the category of a subsidy — except the government has given itself an out by declaring that its policy on subsidies does not apply to projects that include Indigenous participation.

In British Columbia, the Haisla Nation is the majority owner of Cedar LNG, a planned LNG export facility developed in partnership with Pembina Pipeline Corp. LNG is a fossil fuel, although it is often sold as a cleaner alternative to other fossil fuels. Crystal Smith, chief councillor of the Haisla Nation, says the Cedar project will be “one of the cleanest, greenest projects in this country, if not the world.” She said respect for the environment is at the heart of Indigenous culture. The bigger question, she says, is the need for Indigenous communities to own equity in projects as drivers of Indigenous economies within the country.

In a letter to Trudeau, four major Indigenous organizations said a national loans program would be a major step toward reconciliation and self-determination.

“We would highlight that the inclusion of oil and natural gas as an eligible project type is critical to the prosperity of many Indigenous nations in Canada, some of whom are pursuing partnerships in traditional oil and gas and in Canada’s emerging liquefied natural gas sector,” the letter says. It also warns such an exclusion would be contrary to the United Nations Declaration on the Rights of Indigenous People. “This program cannot be driven by an “Ottawa-knows-best” policy approach — the judgment of Indigenous Nations about projects to pursue must be respected.”.

The government can insist on stringent emissions targets on any oil and gas projects which would allow a range of projects to go ahead. It could also place tougher conditions on any loan that is being used for a fossil fuel project and it must also guard against these projects pushing cleaner initiatives further down the list of eligible loans — or off the list altogether. On balance, there is no compelling reason to limit the range of projects available to Indigenous investors. To do so would only reinforce the paternalistic structure this country is trying to move beyond. Indigenous self-determination and reconciliation should carry the day.





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