Indigenous communities need a strong oil and gas industry, too

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Greg Desjarlais is Chief of the Frog Lake First Nation

The entire Canadian economy is being hit by the COVID-19 pandemic, but one of the hardest hit is the oil and gas industry. Demand is plummeting as people stay home and avoid unnecessary travel. On top of that, a price war between Russia and Saudi Arabia has flooded the market with supply. The result has been huge cuts to production and the slashing of billions of dollars in spending. This is catastrophic for all of the workers and companies who depend on activity in the industry for their livelihoods.

Canadians often think of First Nations as opposed to oil and gas, but dozens of us produce oil and gas on reserve, generating millions in royalties, while many more – more than a hundred nations – receive revenues through Mutual Benefit Agreements with pipeline and upstream project proponents.

In my own community of Frog Lake First Nation, we have been producing oil and gas since the 1970s, working with multiple Canadian and foreign partners. Business had already been slowing because of a combination of new federal regulations, lack of pipeline capacity and low global commodity prices. Our reserve has been producing oil at a tenth of its peak in 2012, and that was before the novel coronavirus hit. We have already lost millions in royalties in the past few years because of the price differential for Canadian oil, and are bracing to lose even more. Those royalties are used to fund our own cultural, recreational, health and education programs, as well as held in trusts for future generations. They provide us with economic sovereignty. The collapse of the oil and gas industry is a crisis for us.

Equally important to royalties are the jobs and contracts that First Nations typically negotiate when large projects go ahead. In good years, the industry as a whole will spend billions of dollars in procurement with Indigenous businesses, for example in trucking, catering and construction. In fact, the larger oil sands companies have each procured more from Indigenous businesses over the past 20 years than the entire federal government put together, over the same time period. That’s one of the reasons why Indigenous businesses are 40 times more likely to be involved in the extractive industries as the average Canadian business.

On top of that, about 12,000 Métis and First Nations people are employed directly in the sector. Indigenous people often seek employment in the oil and gas industry because they are good-paying jobs. Indigenous workers earn on average three times as much in oil and gas compared with the average salary of all sectors: $143,459 vs. $47,596, according to Statistics Canada. If these dry up, there won’t be a lot of other good employment options waiting for us in our regions.

Even those First Nations who aren’t directly involved in oil and gas activities will be severely affected by the downturn in the energy industry. Many First Nations’ economic development corporations have diversified toward transportation, tourism and hospitality. The reduction in industry spending on conferences, business travel and catering will affect them significantly.

Frog Lake First Nation has been an advocate for the completion of the Trans Mountain Pipeline with Indigenous ownership, as well as a supporter of both Enbridge’s Line 3 and Keystone XL, for which Alberta has announced financial support. This will help get Frog Lake’s oil to tidewater and expand the market to get a fair price for our product once again. But we also need federal support for the oil and gas industry – now – to recover from the financial effects of the coronavirus.

An oil and gas bailout is not about helping CEOs. It is about helping the workers, small business and communities that depend on this industry for our well-being and prosperity. Frog Lake has prided itself on becoming financially independent over the years as a result of our extensive business engagement. It is not easy to have to ask the government for help. But this is an unprecedented situation.

There will not be an economic recovery without an oil and gas recovery. Canada doesn’t have the luxury of abandoning a sector that provides hundreds of thousands of jobs and billions in government revenues. Ensuring the industry is supported will be one of the most important strategies for boosting Indigenous economies in the aftermath of the pandemic. I am certain my fellow chiefs with oil and gas production would be willing to sit with government to develop a recovery plan that works for First Nations alongside the oil and gas industry, to help us all thrive once more.

Let’s unite as a country to bring about the healing among us, not only from COVID-19 but the division that seems to be befalling us within the national fabric.

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