Dearth of aboriginal-owned businesses is bad for resource firms – by Barrie McKenna (Globe and Mail – June 23, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

OTTAWA — Connie Saliwonczyk is a rarity in Canada – an aboriginal female entrepreneur and a firm supporter of the Northern Gateway pipeline.

Her endorsement of Enbridge Inc.’s pipeline is born out of naked economic self-interest. Her company, based in Alberta’s Frog Lake First Nation, operates various oil patch service vehicles, including a vacuum truck for cleaning up small oil spills. She would be in line to bid for work if the pipeline gets built.

“As a businessperson, it would definitely benefit me,” she said. “And it benefits people on the reserve because I hire First Nations people. For me, it’s showing people that anybody can do it.”

Ms. Saliwonczyk notwithstanding, Northern Gateway now faces a potentially drawn-out legal fight with First Nations, primarily in B.C., that could stall or even block the pipeline, thwarting the dream of getting oil sands crude to the Pacific Coast and on to Asian markets.

Even the federal government, which conditionally approved the project last week, has acknowledged that Enbridge “clearly” has work to do to bring many First Nations on side.

It isn’t just about consultation and winning support. Longer-term, governments and resource companies need to demonstrate to individuals in First Nations communities that they have a real economic stake in resource development.

And until there is a critical mass of aboriginal-owned businesses – ready and able to seize opportunities – securing First Nations buy-in on resource projects will continue to be a tough sell in Canada.

Too little has been done to build aboriginal businesses from the ground up – in part, because access to capital is so difficult. Banks are notoriously reluctant to lend to would-be aboriginal entrepreneurs, who are often short on experience, rarely have a credit history and can’t put up real estate as collateral because direct home ownership generally does not exist in First Nations communities.

More typically, resource companies have worked to win support for their projects by dangling temporary jobs and cash for high-profile community investments, including hockey rinks and other local infrastructure. To its credit, Enbridge has offered First Nations a 10-per-cent share of the pipeline and up to 15 per cent of pipeline construction jobs.

If pipelines, oil projects, mines or logging operations are going to go ahead, First Nations must derive more enduring benefits. And the key lies in the thorny notion of ownership – of land, of resources and of the businesses that stand to gain from their exploitation.

For the rest of this column, click here:


Comments are closed.