Resources and Canada’s First Nations

Following intense debate over Canada’s use of its own natural resources and the conduct of its mining companies abroad, the Canadian International Council is curating a project on natural resources over the next five weeks to examine Canada’s future policy environment for domestic resource extraction, energy security, and international regulatory standard-setting. The project will glean its insights from a variety of stakeholders from government, the private sector, and nongovernmental organizations in order to present a number of perspectives to better explain the challenges that we face moving forward and to delve into some of the controversial aspects of international, national, and provincial politics.

Below is the first response from Professor Andrew Grant of Queen’s University discussing what he considers the greatest challenge facing policymakers in Ottawa vis-à-vis Canadian policy concerning natural resources (transportation, extraction, regulation, geopolitical, etc.).

One of the greatest domestic challenges facing policymakers in Ottawa concerning natural resources is the relationship with First Nations communities. Issues relating to transportation, extraction, and regulation in cases ranging from the Northern Gateway pipeline to the ‘Ring of Fire’ to more modest extractive resource projects often have a bearing on land belonging to First Nations communities. It is not surprising that First Nations groups would like greater control over the scope of extractive projects on their lands. Yet governance challenges abound, ranging from the sheer number of First Nations (greater than 600) as each group possess differing positions towards what types of natural resource extraction are acceptable to varying capacity to enter into negotiations with extractive firms. Another complication is the fact that natural resource governance falls under provincial rather than Ottawa’s jurisdiction, which is further compounded by the tendency of First Nations groups to look to the federal government and the Supreme Court of Canada to safeguard treaty and land rights.

One of the greatest external challenges facing policymakers in Ottawa in the context of natural resources is geopolitical (though, of course, transportation, extraction, regulation, and the like possess their own unique challenges). Russia’s controversial annexation of Crimea highlights how quickly geopolitical wrangling can grow to include natural resources as Ukraine lost more than $10 billion worth of oil and gas fields and natural resource sector businesses. Meanwhile, Canadian investment flows to Russia’s natural resource sector have been restricted in the aftermath of the Canada-Russia diplomatic dispute over the status of Crimea. Similar diplomatic rows can emerge at any time, which will place different policymakers in Ottawa at cross-purposes with one another.

In recent years, Canadian government policies concerning natural resources have been criticized for actively encouraging and funding projects that bring together non-governmental organizations (NGOs) with private firms such as IAMGOLD and Barrick Gold. The Canadian government hopes that such projects will enhance corporate social responsibility, boost democratic governance within host countries, and help spur economic growth. Critics of these projects contend that taxpayer money is not only being directed towards for-profit firms but such arrangements also have the potential to co-opt NGOs in such a way that they will be reluctant to identify human-rights and environmental violations of partner companies. Although it is too soon to assess the ultimate effectiveness or the actual drawbacks of such projects, this is a policy initiative that has the potential to evolve into a significant governance challenge.