On a hot Friday afternoon in late July 2018, nine identical shovels stood upright in freshly tilled dirt, ready for their photo op. Donning white hard hats, a group of politicians, corporate officials, and Enoch Cree Nation leaders had gathered at a groundbreaking ceremony tied to the Trans Mountain expansion. Trans Mountain has been a linchpin of Canada’s oil industry since it was built nearly seventy years ago, and its expansion on the First Nation’s land—a project that would extend the existing pipeline, for exports, from Alberta to the Port of Vancouver—would triple daily capacity to 890,000 barrels of oil.
Breaking ground would be the easy part. From the time it was proposed in 2013 by then owner Kinder Morgan, a Texas-based oil-and-gas corporation, the Trans Mountain expansion faced widespread resistance. First Nations like Tsleil-Waututh, located on BC’s coast, knew their territory would bear the brunt of increased tanker traffic. And, for citizens worried about the realities of climate change, building a lifeline for Canadian oil seemed a noxious mission. As opposition from First Nations, the BC government, municipalities, and environmentalists fuelled court cases, blockades, and rallies, Kinder Morgan’s shareholders grew uneasy. In August 2018, just a month after the Enoch Cree ceremony, the company withdrew from the project, selling its stake to the federal Liberal government for $4.5 billion. The purchase was temporary, the government said. It intended to find a new buyer.
This year, the price tag for the expansion project jumped 70 percent to $21.4 billion after a series of events, including the pandemic and flooding along the pipeline route, drove up construction costs. While announcing the price increase at a press conference, deputy prime minister Chrystia Freeland hinted at some form of Indigenous ownership. “We will announce the next step toward that important objective later this year,” she said. It seemed an idea whose time had come. After over a century of exclusion from the oil industry, Indigenous people would finally take the helm.
One person who would lead the charge was sitting in his home office, just a few kilometres away, during the July photo op. A former CEO of a resort and casino owned by the Enoch Cree, Robert Morin is a descendant of the Papaschase First Nation, which, in the eyes of Canada, no longer exists. After settlers pushed the bison—a pivotal animal in the Papaschase’s economy—to near extinction in the late 1800s, the First Nation withdrew to a small reserve in what’s now the city of Edmonton. As the town expanded, the government forced the Papaschase from their reserve and stripped them of their treaty status through a bureaucratic sleight of hand. Morin’s parents moved to Enoch Cree, where he grew up. He now calls Enoch home, but he never forgot the imprint of Canada’s lucrative dispossession over 100 years ago. The original Trans Mountain pipeline, pumping out over 250,000 barrels of oil daily, cuts across the Papaschase’s former reserve.
Last year, Morin became chairperson of Project Reconciliation, an Indigenous-led consortium vying for ownership of Trans Mountain and its new pipeline. “I had no choice but to get involved,” he says. Incomes among Enoch Cree members are well below the national average. And, with just under half of his home community in Enoch Cree Nation under the age of twenty-five, Morin is worried about adequate housing in the years to come. Funding for child welfare services also concerns him. With a name that crystallizes its ambition, Project Reconciliation offers a potential solution: financial independence from a government that has caused intractable harm. “If you have that extra wealth and that extra opportunity in revenue, you’re not depending upon the services of the government,” says Morin. Right now, those services are falling short, just as they have for over a century. If it goes through, Project Reconciliation could be the largest single Indigenous-owned energy investment in North America.
“We’ve survived here as First Nation people,” he adds. “We’ve been suppressed. And we’ve been pushed aside for the majority of the years that Canada has been a country. I think we have an opportunity here to change that.”
In the past decade, reconciliation has become a political sound bite and an aspirational mantra. In 2015, the Truth and Reconciliation Commission defined it as “establishing and maintaining a mutually respectful relationship between Aboriginal and non-Aboriginal peoples.” Critics of the term believe that the relationship remains too fraught to be fixed. They note that “terra nullius” (or land belonging to no one) was written into Canada’s founding legal doctrine, allowing colonists to ignore the original inhabitants. The idea still shapes the country’s laws. When First Nations try to affirm their collective rights enshrined in the constitution, they face what, in a 2018 speech, former justice minister Jody Wilson-Raybould called a “prove it” mentality. This often involves expensive court battles that demand reams of evidence of past occupation—evidence that has often been weakened or erased by colonialism itself. In other words, what is there to reconcile if respectful relations never existed?
In the midst of this reckoning, Project Reconciliation is driven by a simple premise: by buying into resource development on their lands, Indigenous peoples can narrow the wealth-and-power gap that exists with settlers. Project Reconciliation isn’t alone in this belief. Sixteen First Nations have tentatively agreed to a 10 percent stake in the Coastal GasLink pipeline under construction in northern BC. This year, a group of twenty-three First Nations and Métis communities signed a deal with Enbridge to buy a $1.12 billion minority stake in a network of pipelines in northern Alberta.
Such arrangements come in the wake of the costly lesson the oil-and-gas industry learned from Indigenous-led resistance. When the Northern Gateway pipeline was proposed for BC’s west coast in 2010, First Nations didn’t just challenge the line itself. They contended Canada had no right to make sweeping decisions about their territories—full stop. As the pipeline’s federal-review panel carried out hearings, the Idle No More movement spread across the country, calling for Indigenous sovereignty over land and water. Facing the spectre of relentless court challenges, the pipeline was soon on the rocks. In 2013, Ottawa-based Macdonald-Laurier Institute, a think tank whose funders include the Canadian Association of Petroleum Producers, recognized the playing field had changed and that partnering with nations was key to the industry’s future. Macdonald-Laurier’s solution was to offer First Nations equity—a financial share—in oil-and-gas projects affecting their territories.
The benefits seemed clear. Unlike the decades-long slog of fighting for title in the courts, negotiating with governments loath to give up control, and the dangerous prospects of asserting jurisdiction through lengthy blockades of roads or rail lines, the results of an Indigenous stake in resource development can be fast and straightforward: as soon as oil flows, money follows.
Those benefits have attracted two other competing bids for Indigenous ownership of Trans Mountain. They include the Chinook Pathways partnership—which seeks co-ownership with Pembina Pipeline Corporation, a Calgary-based company—and Nesika Services, a nonprofit representing communities along the pipeline’s route.
Morin, Project Reconciliation’s chairperson, believes his bid is the best choice. Project Reconciliation is unique, not only in seeking full ownership of the pipeline but also in its plan to direct a share of the profits into an “Indigenous sovereign wealth fund,” which would reinvest in clean-energy projects like carbon capture and storage, ideally transforming pipeline proceeds into a source of self-generating income. Project Reconciliation, says Morin, is “the only project that has talked about changing the revenue and the business component of Trans Mountain.” For an industry that has long treated Indigenous territories as its playground, such a fund could redirect wealth to those it had been taken from.
On the other hand, it remains unclear how certain the benefits of Project Reconciliation really are. To start, its scheme for structuring a possible purchase of Trans Mountain involves plentiful intermediaries. Pipeline companies are like landlords, and oil companies pay rent to use the pipe. Indigenous communities that sign on to Project Reconciliation would step into that role via a limited partnership—a business made up of distinct partners who shoulder different amounts of risk should the project go south. As long as they don’t physically stop the pipeline from running, Indigenous nations are shielded from liability, and the risk of losing money or going bankrupt falls exclusively on the financiers.
But such a scenario comes with a different gamble. The project would be funded entirely by debt in the form of bonds issued by a bank and sold to financial institutions, and that means lots of interest. Before reaping any financial benefits, in other words, Project Reconciliation will need to pay its bills. The biggest of these will be that debt—which, if Project Reconciliation meets the full $21.4 billion asking price, would amount to $1.07 billion annually for twenty years, not including interest. Then there’s the bill for the Trans Mountain Corporation, the government-owned company that is currently building the expansion and that Project Reconciliation intends to hire as the pipeline’s operator. TMC had $364 million in operating expenses last year. Insurance would take another big bite, and even with coverage, events like oil spills would encroach on profits—a relatively small leak from Trans Mountain on Sumas First Nation’s land in 2020 cost the company nearly $18 million to clean up.
Once the deal is in place to purchase the new and existing pipelines, Project Reconciliation’s role will shift to managing the business. It will charge the group of Indigenous nations that sign on $5 million per year for its services. So far, the project—which has a staff of twenty full-time employees—has already spent $4 million, and much of that comes from the retirement savings of Stephen Mason. A non-Indigenous oil-industry executive and consultant, Mason was asked in 2018 by the oil company Husky Energy (today Cenovus Energy) to help organize an Indigenous-led bid for the pipeline. Husky would ship its oil through the Trans Mountain expansion, and it had a vested interest in its success. Mason agreed. “We’ve got to change this,” he says, referring to the ways resource projects have frozen out First Nations. “If I can do anything as I’m nearing the end of my career, I can be part of that transformational change.” Today, Mason remains a major funder of Project Reconciliation. “I’m the bulk of it,” he says, declining to identify “a few” other funders. If the deal ever gets signed, he anticipates getting some of that money back.
After all those costs are factored in, a yet-to-be determined percentage of the proceeds will be diverted to the Indigenous sovereign wealth fund. What’s left will be distributed among the signatory nations as profit—they would receive different shares depending on their proximity to the line. The pivotal question: How much profit can they expect?
It all hinges on tolls—the fees oil companies pay to ship their oil. They are Trans Mountain’s sole source of revenue. So far, eleven oil companies have contracts binding them to toll payments for the next fifteen to twenty years. But their negotiated rates—baked into their contracts since 2013—are locked in below the project’s costs. This is one reason that Trans Mountain anticipates spending on cost overruns at least $10.5 billion more than it can hope to get back in toll revenue. In fact, a recent report found Trans Mountain would need to double its current tolls in order to be profitable—a hike that could negate the lauded financial benefits of shipping oil through the line. “The big problem with this project is that the tolls aren’t paying for it,” says economist Robyn Allan, who adds that, for a pipeline built entirely on debt, rising interest rates only compound that financial crunch.
Dennis Cornelson, Project Reconciliation’s managing director, remains confident the government would subsidize the sale and that shippers not locked into long-term contracts—which make up about 20 percent of the pipeline’s capacity—will shoulder higher costs. “The market has moved up in terms of what shippers are willing to pay,” he says. Despite a sea of unknowns, Project Reconciliation maintains that Indigenous nations that sign on could make more than $400 million in profits per year. “We don’t see it being any less,” says Mason. “It could be more.”
Project Reconciliation is now in discussions with the federal government. The company won’t disclose how many Indigenous nations have signed on. It has also yet to disclose how much those nations are willing to pay and what the costs of debt will be. But, to some, signing on isn’t just a question of revenue—there is also the risk the pipeline could go ahead with no Indigenous partners at all.
Liana Wolf Leg has seen the consequences of an oil-and-gas project gone awry. Her First Nation, the Siksika Nation, an hour’s drive east of Calgary, entered into partnerships with oil companies that agreed to manage the infrastructure on its territory. “The oil company that came on to Siksika mismanaged it,” she says. “It just completely shut down.” Wolf Leg describes old oil drills sitting unchecked on the territory. “It’s just bad,” she says. (The Siksika Nation did not answer requests for comment.)
Wolf Leg is getting her bachelor’s degree in business at the University of Calgary. When it comes to Project Reconciliation, she started out ambivalent. “I wanted nothing to do with it,” she says. Her cousin, Gregory John, had worked as an outreach consultant with the project in its early stages and convinced her to start attending lunches and meetings with its representatives. “I’m like, ‘Okay, I’ll try it out,’” she says.
Over time, she grew more enthusiastic. The stream of income from the project, she decided, could provide breathing room to transition to a new, less-polluting economy. Now she’s the project’s lead outreach manager, sending emails to nations across the western provinces, asking them to meet with representatives of Project Reconciliation. Some are interested, some not. “It’s been hard,” she says, describing vitriolic messages from those against the pipeline and condescending meetings with industry executives and government officials who compliment her “exotic” earrings.
Project Reconciliation’s promotional materials make sunny predictions that an Indigenous-owned pipeline can support a new relationship between Canada and Indigenous nations. Wolf Leg is less upbeat. “I still don’t like the pipeline,” she says. What she sees in Project Reconciliation is a chance for Indigenous nations to have a say in the pipeline if it does go ahead and to be better protected from harm if it fails. “That hit something,” she says. “I was like, ‘Okay, I’m on board.’”
That line of thinking is familiar to Clifford Gordon Atleo, an assistant professor in resource and environmental management at Simon Fraser University. Whether accepting or denying resource extraction, he says, communities “come at it from the perspective of doing whatever they can to influence decisions or pressure decisions.” Since the 1600s, settler industries have damaged the lands Indigenous people lived and relied on. With their traditional livelihoods threatened, Indigenous nations adapted, finding their own ways to participate in the industrial-resource sector. Now many of those adaptive solutions are also on the brink, says Atleo. With the decline of traditional whale hunts, his own First Nation, the Nuu-chah-nulth on Vancouver Island, entered into the commercial-fishing industry on the west coast. The First Nation went from having 200 industrial fishing boats to just six over the span of one generation. Across the country, from Nova Scotia to British Columbia, Indigenous people working in sawmills faced wavering employment prospects due to unstable lumber markets and overlogging.
That history often leaves Indigenous people between a “rock and a hard place” when deciding if or how to engage with resource extraction on their territories, says Atleo. He bristles when colonial cultures hold Indigenous people up to an environmental-purity test that they themselves fail to clear, often with more resources and infrastructure at their disposal. When daily needs like housing and clean water aren’t being met, communities tend to make strategic, context-based decisions in the service of self-determination. They “try to leverage whatever they can” while making choices that align with their values, says Atleo. He still worries about the bind this puts Indigenous peoples in: embrace resource development or fall by the wayside. He questions visions of reconciliation centred on rampant economic growth. “Our participation comes with a cost,” he says.
Stewart Phillip, long-time chief of the Penticton Indian Band and current president of the Union of BC Indian Chiefs, calls economic reconciliation a “fairy tale” and initiatives like Indigenous ownership of Trans Mountain “razzle-dazzle economics.” Indigenous nations that hitch their economic futures to such resource projects are often beholden to the boom-and-bust cycles of resource politics, says Phillip. “What’s missing in all of those projects is long-term sustainability.” He says, “They’re all market driven, and more often than not, they fail.” For Phillip, true economic reconciliation requires more than just partnering with industry players. He also wants nations to receive a share of government revenue taken from and made on their land. That configuration would require Canadian governments to perceive Indigenous nations not as wards of the state but as governments themselves—a sea change in the relationship. “These are issues that no one—certainly not governments—wants to engage in,” Phillip says.
Many Indigenous people and First Nations remain opposed to the Trans Mountain pipeline. That includes the Tsleil-Waututh First Nation, whose reserve is a mere twenty-minute drive from the oil-storage tank farm that marks the pipeline terminus in Burnaby, just east of Vancouver. Tsleil-Waututh has spent years restoring the inlet that, prior to the colonial era, provided about 90 percent of their diet in the form of oysters, crabs, fish, and other seafood. In 2020, for the first time in nearly half a century, Tsleil-Waututh members harvested clams for the third year in a row. Stubbles of pearly herring eggs were found on the rocks of nearby False Creek for the first time since the 1800s. Stream restoration has bolstered still-threatened salmon runs, and transient orcas have made a cherished reappearance.
“The work that we’re doing is working, and things are starting to come back to the ecosystems that are natural to this territory,” says Charlene Aleck, a spokesperson for the Tsleil-Waututh Nation’s Sacred Trust Initiative, which is fighting the pipeline expansion in the courts and on the ground. That expansion could result in a roughly sevenfold increase in tanker traffic in Tsleil-Waututh waters, jumping from sixty to more than 400 tankers per year. The oil tanks, too, are expected to triple in size, holding over 5 million barrels of oil. Spills on land and at sea could be catastrophic, and then there’s the climate.
So far, Canada is one of the few G7 countries whose carbon emissions have increased since the 2016 Paris Agreement on climate change, and that’s without accounting for the emissions from oil produced here and burned elsewhere. The federal government claims Trans Mountain fits into Canada’s climate commitments because its revenue can fund the transition to renewable energy. Aleck disagrees. “To say we need this pipeline in order to pay for climate change is just like saying we need to sell more cigarettes to buy campaigns for lung cancer.”
Indeed, Trans Mountain’s revenues depend on Canada’s oil-and-gas sector growing for at least the next two decades, despite warnings that new investment will push temperatures beyond a 1.5 degree warming level if those fuels are combusted. According to geoscientist J. David Hughes, Canada’s oil-and-gas sector already produces enough carbon on its own to blow past the country’s 2050 climate target by 81 percent—even if all other emissions are reduced to zero. And the macro impacts of climate change could have a causal relationship to oil spills. Last year, a slew of disasters befell BC, including wildfires and floods that left sections of Trans Mountain’s existing pipeline bobbing loose in rivers where they used to be buried.
Rueben George, Sundance chief and member of the Tsleil-Waututh First Nation, isn’t willing to risk it. “It’s inevitable,” he says. “It’s not if a spill will happen but when.” Already, Trans Mountain has reported eighty-four oil spills to the Canada Energy Regulator since 1961. That number doesn’t include a 2020 spill that leaked over 150,000 litres on Sumas First Nation territory. According to a study from Simon Fraser University, published in 2015, the company says there’s a 99 percent chance of another spill in the next half century. When George calls the pipeline “economic smallpox,” it is hard to avoid thinking of the goods laced with deadly disease that early colonists traded to Indigenous communities. Still, George is cognizant of the tough decisions Indigenous nations face. “I don’t say anything bad about any nation that negotiated,” he says. “The hand we’ve been given to play has been devastating.”
It’s a point on which Morin agrees. “We’ve had 150 years of failure,” he says, referencing the years of economic exclusion. “Here’s a new direction.”