Indigenous-led group promises $6.9B TMX pipeline bid within week

An Indigenous-led group plans to offer to buy a majority stake in the Trans Mountain oil pipeline from the federal government this week or next — a deal that could help Prime Minister Justin Trudeau mitigate election-year criticism from environmentalists.

The group, called Project Reconciliation, aims to submit the $6.9 billion offer as early as Friday, managing director Stephen Mason told Reuters, and start negotiations with Ottawa two weeks later.

Project Reconciliation was founded by Delbert Wapass, a former chief of the Thunderchild First Nation in Saskatchewan, and has invited Indigenous participation from B.C., Alberta and Saskatchewan. Its office is in Calgary.

The group said the investment will alleviate First Nations poverty, a watershed for Indigenous people who have historically watched Canada's resources enrich others.

The project would twin the 1,150-kilometre-long Trans Mountain pipeline from Edmonton to Burnaby, B.C., helping resuscitate an industry depressed by low prices and congested pipelines. It would nearly triple the pipeline's capacity to an estimated 890,000 barrels a day and increasing traffic off B.C.'s coast from approximately five tankers to an estimated 34 tankers a month.

Trudeau's Liberal government bought the pipeline last year after its former owner, Kinder Morgan Canada, gave up on trying to get the expansion approved.

The federal government has already been touting First Nations participation. A deal ahead of the October election could ease criticism from voters who have complained of broken promises on the environment and aboriginal rights.

Still, not all First Nations groups are on board. Some in British Columbia have pledged to keep fighting expansion of Trans Mountain, even with blockades and protests, saying ownership makes no difference to the risk of oil leaks.

"The greatest hope the government can have is they neutralize this topic. Imagine if a multinational gets ownership of the pipeline, or an Indigenous consortium. The Indigenous [option] is way less provocative," said Ken Coates, professor of public policy at University of Saskatchewan.

When Trudeau approved the Trans Mountain pipeline expansion in June, he said his government would immediately consult Indigenous communities on how they can benefit, including potentially buying the pipeline.

'Vocal minority' 

Mason declined to say how many Indigenous communities support Project Reconciliation.

"There is a vocal minority [against the project]. The majority are in favour especially if they have material ownership and a place at the table that allows them to be involved with environmental aspects," Mason said. "If we own it, chances are we can quiet down the opposition."

Project Reconciliation hopes to buy 51 per cent of the pipeline this year for $2.3 billion and roughly half the expansion project for $4.6 billion. It would finance the deal through bank loans underwritten by commitments from oil shippers.

The federal government would retain 49 per cent.

Once expansion is complete, it intends to invest $200 million of annual proceeds into an Indigenous sovereign wealth fund.

"We have conversations about climate change. But tell me at what level climate change is a discussion when we have a lot of our people who are starving," Delbert Wapass, Project Reconciliation's executive chairman, told a packed crowd at Calgary's Petroleum Club in late June.

'Template for the future'

Indigenous people who support buying Trans Mountain say it offers a rare opportunity to own money-making oil infrastructure.

Before Chief Tony Alexis was born, Trans Mountain was built underground on Alexis Nakota Sioux Nation traditional land located 85 kilometres northwest of Edmonton, where the pipeline starts.

In the 66 years since, the community has received no benefits, Alexis said, only risk. Now it could cash in.

"Our people have been ready to be in business for a long time," Alexis said. "If we do this right, this is going to be a template for the future."

Alexis is co-chair of the Iron Coalition, another Indigenous-led group seeking to buy between half and 100 per cent of the pipeline once it is built in 2022.

The Alberta-based group is discussing options with banks and plans to direct future profits to Indigenous groups in the province that join.

Iron Coalition is co-chaired by Chief Calvin Bruneau of the Edmonton-area Papaschase First Nation and president Ron Quintal of the Fort McKay Métis in northern Alberta.

Communities plan appeal

At the other end of the pipeline, some Indigenous communities in British Columbia are digging in for a fight.

"Our sacred obligation is that we are stewards of this land, this water and our people," said Chief Leah George-Wilson of Tsleil-Waututh First Nation, based along Burrard Inlet opposite Westridge Marine Terminal where Trans Mountain ends.

Tsleil-Waututh plans to appeal Trudeau's approval of Trans Mountain's expansion over concerns about spills and tanker traffic, George-Wilson said.

Coates, the University of Saskatchewan professor, said Indigenous participation in the pipeline could allow Trudeau's Liberals to retain more urban votes that will be critical to the election's outcome.

The government is already promoting Trans Mountain as a means to improve Indigenous lives.

"Meaningful economic participation by indigenous peoples is an important way to respect … people who are actually impacted along the line," Finance Minister Bill Morneau said last month.

Conservatives have not decided how they would sell the pipeline if they win the election, said Conservative MP Shannon Stubbs, who represents the Alberta riding of Lakeland and has criticized the government over natural resources issues.

The Alberta provincial government said it welcomed interest from Indigenous communities in becoming partners in the energy sector.

British Columbia Premier John Horgan and his NDP government opposes the pipeline expansion, however, and provincial Environment Minister George Heyman said Indigenous ownership would not change its concerns about spills.

Opponents are planning litigation, blockades and protests, said Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs.

"Who owns the pipeline is not the issue. It's what goes through the pipeline," he said.