/Alberta’s $1-billion Indigenous Opportunities Fund may widen gap between rich and poor First Nations groups

Alberta’s $1-billion Indigenous Opportunities Fund may widen gap between rich and poor First Nations groups

CALGARY – The inspiration for Alberta’s new $1 billion fund for Indigenous business investments came from the successes of real-world First Nations business ventures, but some of those Indigenous groups are warning the provincial government to look closely at the details in their plan to ensure widespread participation in the initiative.

The intent of the recently announced Alberta Indigenous Opportunities Corp., a $1-billion fund from the province for Indigenous business investments, is “so good” but the law creating the fund needs to be more focused and some details clarified, said Paul Poscente, CEO and chair of Backwoods Energy Services, an oilfield services company owned by the Alexis Nakota Sioux Nation west of Edmonton.

“One of the biggest constraints in Indigenous business is access to capital and I think the intent of the fund is to address this but I think they need to be very careful that they’re not going to actually create a wider gap,” said Poscente said, adding that there are a handful of wealthy First Nations communities in the province that will have the business acumen to access the funds.

“Those few communities that have real business teams and have real capacity to access this corporation, it’s going to be their bank, and the gap between those and the have-nots are actually going to get wider,” Poscente said, adding that the Alexis Nation, which purchased Backwoods in 2015, is among the First Nations in the province with business teams and expertise in place to leverage the fund.

“We’re going to be knocking on (the fund’s door) every day,” he said, but added that he wanted to see other First Nations groups be successful as well.

He also said the province needs to be careful that it’s not directly helping First Nations analyze or vet potential investments because that could create a liability, potentially, by recommending business ventures that aren’t successful.

Alberta is home to a range of successful Indigenous businesses, including the Fort McKay Group of Companies, which is owned by the Fort McKay First Nation and services the oilsands, and non-energy-related businesses such as Peace Hills Insurance, owned by the Samson Cree Nation in central Alberta.

The provincial government is aware that some First Nations and Metis communities have less capacity to either pitch or analyze potential business ventures than others, and the province is creating a separate $6-million fund for “capacity building” for those smaller Indigenous communities, Alberta Indigenous Relations Minister Rick Wilson said in an interview.

Wilson said the goal of the fund announced earlier this month is to allow First Nations across the province to participate in mid- to large-size business ventures.

“We do have other tools in the toolbox to help with small projects as well, but this is for mid- to large-size projects and energy sector projects, which could be oil and gas, could be mining, could be forestry and could be renewables projects as well,” Wilson said.

The inspiration for the fund came from successful First Nations business ventures that already exist in the province, including the Fort McKay First Nation and Mikisew Cree First Nation investment of $503 million in a stake in oil storage tanks from Suncor Energy Inc. in 2017, Wilson said.

So far, he said, the government has heard from First Nations looking to invest in pipelines, wind projects and hydroelectricity projects. “This is going to be a game changer for them,” he said.

My goal is to leverage (the fund) four times

Alberta Indigenous Relations Minister Rick Wilson

Wilson said his goal is to have a board in place for the Crown corporation by late fall and to have some project funding announcements at some point in the spring.

“Our whole goal is to take this and to leverage it. My goal is to leverage it four times,” Wilson said. “If this turns out good, we could look at increasing it,” he said of the initial $1-billion investment.

The Alberta Indigenous Opportunities Corp. is one of a number of new funds launched by Alberta’s United Conservative Party government, which ousted the NDP in an election in May.

The province created a $10-million Indigenous Litigation Fund in August to help Indigenous groups challenge laws or government decisions that hamper the development of the province’s energy industry.

The fund is primarily aimed at challenges to Bill C-48, which the Liberals passed earlier this year, banning oil tankers off the northern portion of the British Columbia coast.

Wilson said the government has been reviewing a number of applications to access the litigation money and will be announcing funding “in the next few weeks.”

Financial Post

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