The emergence of indigenous industrial regulation
“To be in business,” Membertou First Nation Chief Terrance Paul told CBC News last month, “you have to play the game first.” You have to play to win and we won. “
The November 9th announcement, in partnership with Vancouver-based Premium Brands Holdings Corp. Buying $ 1 billion in Clearwater Seafoods Inc. through the Membertou and a First Nations coalition seems to have come out of the blue. It was not like that.
The Mi’kmaq nation of Membertou is one of the wealthier First Nations in eastern Canada. Last year, it generated $ 67 million in revenue from diversified interests ranging from fishing to real estate. With this 50% stake in Clearwater, Membertou and its partners will move into a much higher realm in the Canadian corporate universe.
As topical as this story is, it is not an isolated incident. Across Canada, First Nations are making their way into holding positions in key industries. The trend represents a fundamental shift in Canadian corporate culture – one that law firms need to catch up with if they don’t want to miss out on opportunities.
“Everything shows that the political path to reconciliation is slow, but there are easier, more constructive and more direct paths,” said Merle Alexander, director of the Miller Titerle + Company in Vancouver, a member of the Kitasoo Xai’xais First Nation.
First Nations, playing for key revenue-generating real estate, have primarily focused on western Canada so far, but are moving east. Since 2004 – when the Supreme Court of Canada established the Crown’s responsibility to consult the First Nations on projects affecting traditional territory (“Duty to Consult” or DTC) – the Haida Nation has been the largest forest tenant on Haida Gwaii. The division has assets of $ 22 million and annual sales of $ 35 million.
Three years ago, First Nations Fort McKay and Mikisew Cree purchased a $ 503 million piece of the East Tank Farm portion of the Fort Hills oil sands mine near Wood Buffalo, Alberta. Shortly after Membertou announced the Clearwater deal, First Nations celebrated the completion of the Three Nations Energy Project, the largest off-grid solar farm in the country, in Fort Chipewyan, northern Alberta.
In early 2018, the Ontario government announced the sale of 2.4% of Hydro One’s outstanding common stock to a limited partnership controlled by 129 First Nations. A year later, Hydro One announced the completion of a new transmission line through a joint venture between the six nations of the Grand River Development Corporation and Aecon Group Inc. Even if many western indigenous communities are fighting to stop the project to expand the Trans Mountain Pipeline, a coalition of First Nations in the region wants to buy 51% of the shares.
Many of these transactions have one thing in common – it’s not just about profit. Sometimes they are the result of a first nation asserting control over the work on traditional territory. Sometimes they want to close permanent infrastructure gaps. Fort Chipewyan’s solar project is expected to reduce the amount of diesel the isolated community uses by approximately 800,000 liters per year. Often times, they are inspired by the need to reduce unemployment.
Lawyers who want to partner with First Nations on such projects need to understand that the goals of an indigenous company will not be the same as the goals of the average Bay Street Titan, said Brian Hebert of McKiggan Hebert in Halifax.
“In the case of Membertou, for example, the First Nation could try to employ more Mi’kmaq people in the fishery,” said Hebert, who worked for Pictou Landing First Nation in Nova Scotia.
“That’s not what a teacher pension fund, for example, will worry about.”
The first step in understanding what an Indigenous corporate client wants is to acquire cultural literacy – which is much more than familiarizing yourself with Indian law, said Tuma Young, an individual practitioner who studies Indigenous Studies at Unama’ki College in Cape Town teaches Breton University.
“You can’t just come up to them and say, ‘Folks, I can do great things for you on mergers and acquisitions,” he said indigenous peoples applies.
“It is also very important to know how indigenous legal traditions work themselves – how, for example, the Mi’kmaq see collective and individual rights in trading companies. These are things every law firm in the country should understand. “
Law firms across the country are striving to incorporate indigenous cultural literacy into attorneys’ professional development, and the Canadian Bar Association is running an online program in response to one of the calls for action in the Truth and Reconciliation Commission’s final report. The fact that more indigenous lawyers are emerging at universities now gives companies another point of entry, Alexander said.
“The easiest thing you can do is hire more indigenous lawyers. Learn from people with first-hand experience, ”he said.
“I think too many big corporations have some sort of labor law approach to Aboriginal law – the idea that they have to be on the corporate side or the indigenous side, not both. In the long run, litigation related to indigenous rights will decline as those rights are ironed out in court. But many law firms still have the ancient notion that indigenous clients are utterly controversial. “
The happy irony here, Alexander said, is that the DTC process itself could blur the old divide between corporations and indigenous Canada. Governments have largely delegated the work of DTC to the private sector. First Nations have negotiated performance agreements with these companies and received shares in return. They also received a crash course in how these companies work.
“It has brought these businesses and indigenous communities closer together,” he said. “They raised each other. They learn to respect one another and find ways to get things done in their mutual interest – and they find that they have more of those interests in common than they might have thought. “
What does all this mean for the reconciliation project? As the song says, money changes everything. First Nations with reliable sources of income will gain more autonomy and political influence as those sources of income grow.
“Ultimately, economic strength and political power are the same,” said Alexander. “If you can influence the economy of a province, you can influence its politics too.”
“What lawyers need to understand is where the indigenous communities are going,” Young said. “Become the largest fish processors in the world? Absolutely. What else?
“Here in Nova Scotia we have a Mi’kmaw health agency. You’re going to need legal assistance. I wouldn’t be surprised if I saw a judicial system here in ten years. A mi’kmaw bar? Why not?”
Doug Beazley is a regular contributor in Ottawa.