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Bands of First Nations a hurdle to $650-billion in Western Canada oil and gas

In British Columbia, there are currently seven major oil and gas projects proposed, affecting an estimated 56 of the 198 First Nations in the province, says a report.

JOHN LEHMANN/The Globe and Mail

There are more than 600 major resource projects worth $650-billion planned in Western Canada over the next decade but relations with First Nations may be a major hurdle for those developments, says a new report by the Fraser Institute.

Every one of those projects will affect at least one First Nations community, said the report released Thursday by the right-leaning think tank based in Vancouver.

"There is not a single oil or gas project under proposal in Western Canada that does not affect at least one First Nations community, and the willingness of these communities to participate in energy development can be the factor that determines the success of a project," said the report.

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In British Columbia, there are currently seven major oil and gas projects proposed, affecting an estimated 56 of the 198 First Nations in the province, it said.

In Alberta, five proposed oil projects touch 44 per cent of aboriginal communities and though only two projects are in the works in Saskatchewan, those two projects impact 23 per cent of all First Nations in the province, the report said.

The aboriginal community is among the fastest growing in the country, expanding 45 per cent from 1996 to 2006. The non-native population during that same time frame grew by eight per cent.

But these communities, largely located in remote and rural areas, have a staggering unemployment rate of approximately 23 per cent, compared to 7.1 per cent for the nation as a whole, said the report written by the institute's Ravina Bains and Kenneth P. Green.

"If you look at the actual geographic location of where these communities are located, in many cases there aren't any other economic development opportunities around them," Bains said.

It's a potential labour force with an investment in the project's success, she said – if they are willing partners, that is.

"Yes there are obstacles in place, but we're at a unique point right now in terms of the demographics of these communities, in terms of the young population, that we can really tap into and make sure that we cultivate," Bains said.

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Those obstacles include education. Fewer than half of First Nations' youth successfully complete high school, compared to approximately 80 per cent of non-native youth.

Willingness is another.

"Despite the potential for economic prosperity, there are many First Nations' communities that are opposed to resource development," the report said.

Among the seven projects proposed in B.C. are Enbridge's Northern Gateway and Kinder Morgan's Trans Mountain oil pipelines – two projects facing potential failure because of First Nations opposition.

Bains said there is hope for reconciling First Nations and the resource industry.

She cites the Haisla Nation's participation in the Douglas Channel Energy Partnership and the Kitimat liquefied natural gas project with Chevron and Apache. The band is also involved in the BC LNG proposal and the Shell Kitimat LNG Terminal, but opposed to the Northern Gateway pipeline.

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The report makes five recommendations for fixing the relationship between business and First Nations, including better communication and transparency from the outset, and developing an understanding of the communities involved.

Bains said government also has a role to play in clarifying the duty to consult, and addressing the education gap.

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