The relationship between Corporate Canada and aboriginal people is at a critical inflection point. Until very recently, that relationship was dictated by bottom-line results with little if any engagement of aboriginal communities, which had limited economic and political power. That is changing as these same aboriginal communities are finding their voice and the support of the Supreme Court, which has significantly broadened the scope of aboriginal land rights with last year's Tsilhqot'in decision and shifted the balance of power in the process. The historic judgment builds on the 200 major land rights' cases indigenous people have already won across the country by declaring aboriginal title to lands outside of a reserve. It has also shifted the balance of power.
Natural resources account for almost 20 per cent of Canada's GDP. Many development projects are in the backyards of First Nations, Inuit and Métis communities. Corporations that want to operate successfully in these communities have to consult, accommodate and find new ways of building or rebuilding relationships that have been broken for some time, or risk economic loss.
What better way to do that than to reflect the aboriginal voice at all levels, from the front line to the boardroom? Integrating the values, skills, perspectives and aspirations of Canada's indigenous people will filter through operations to the bottom line. This isn't just good for aboriginal people. It's good for business and the economic health of all Canadians.
A recent TD study shows the direct aboriginal contribution to Canada's GDP is more than $32-billion. Yet, according to the 2014 Canadian Board Diversity Centre's annual report card, aboriginal people hold only 0.8 per cent of corporate board seats in this country, even though the aboriginal community is the fastest-growing segment of the Canadian population, representing 4.3 per cent of the overall population in 2011. This growth, combined with the rich natural resources of aboriginal communities, makes it essential for Corporate Canada to engage them.
It's time corporations reflected on what it would mean to local aboriginal communities to have aboriginal representation on their boards, helping to make decisions on the landscape that affects them directly. Fort McKay First Nation, north of Fort McMurray, Alta., has been able to transition from an adversarial relationship into a partnership with surrounding oil sands companies because those companies found a way to include the community in decision-making. The result: Those businesses are generating $1.5-billion to $2-billion a year in revenue.
Prince Rupert, B.C.,-based Lax Kw'alaams band was recently offered $1-billion from a joint venture led by Malaysia's state-owned Petronas to approve the Pacific Northwest liquefied natural gas project. The offer underscores how rapidly relations between aboriginal communities and Corporate Canada are evolving, as well as what's at stake. It's not always about money and benefits; it's also about process. Canada will only benefit from deals like this if all sides come together and work collaboratively.
Calgary-based Suncor Energy Inc., gets it. It has been recognized for its efforts in engaging and building relationships with more than 150 aboriginal communities and groups across Canada, with silver status in the Canadian Council for Aboriginal Business's progressive aboriginal relations program.
The alternative: when companies are not willing to build relationships and bring aboriginal people to the table to understand their concerns about environmental impact and to help mitigate potential risks, projects are disrupted, costing businesses tens of thousands of dollars a day. We're at a fork in the road. Corporations have a choice: they can work with aboriginal communities to find mutual ways to benefit or be at loggerheads and everyone loses.
The need for corporate boards to represent the people they serve is not a new concept, and the it is one that is gaining traction. The urgency to increase boardroom diversity has gained momentum since the 2008-09 financial crisis, which highlighted the need for enhanced governance, efficacy and competence at the board level. The business case is clear: diverse thought and opinion at the board level leads to better decision-making, improved performance for companies and improved outcomes for the stakeholders and communities they serve. Increasing the number of aboriginal board members sends a profound message: You are important enough to us that we need to have your people helping make decisions on the landscape that affects your community.
Bottom line: Shareholders are demanding more from businesses, boards and nominating committees. To that end, the federal government announced plans in its recent budget to amend the Canada Business Corporations Act to adopt a "comply or explain" framework in order to help increase the number of women on the boards of all federally regulated companies. This builds on what is already in place in Ontario, Quebec, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut and Saskatchewan for public companies. It's an important step, but at the same time we recognize diversity goes beyond gender.
Corporations have an opportunity to make a leap forward in correcting the missteps of the past with aboriginal communities, and to prosper as a result. But it's going to take leadership on both sides to find space for that conversation to happen and to learn how to work together. The boardroom is that space.