The estimated $3-billion project has been years in the making, and under the aggressive timelines of the Inuit-owned Nukik Corporation, it could begin delivering clean, reliable, baseload electricity to five communities and several mines by 2030.

The challenges are formidable: a capital-intensive project that depends on uncertain electricity supply to be built over an environmentally sensitive landscape.

However, the benefits would be massive, says David Kakuktinniq, the president of both Nukik and parent company Sakku Investments Corp., the economic development arm of the Kivalliq Inuit Association.

The transmission line would greatly reduce five communities’ reliance on dirty and expensive diesel while bringing revenues to the Inuit corporations charged with economic development. It would also provide the reliable internet connection that is essential in a modern economy.

“This would open up the potential for economic activity in Nunavut,” Kakuktinniq tells Corporate Knights. The Inuit business leader spoke as he was returning to Rankin Inlet from Toronto, where he was prospecting for support from mining companies at the annual Prospectors & Development Association of Canada (PDAC) conference.

Providing clean reliable power “is the one thing that is most critical in terms of its economic value and what it would provide to the people in the North,” he says.

While the federal government has provided some support to date, the Kivalliq Inuit Association is urging Finance Minister Chrystia Freeland to allocate $426 million over several years in her budget (expected to be released on March 28) to ensure the project can proceed.

All told, the project proponents are looking for a $1-billion contribution from Ottawa but say that the money would be repaid within a decade from tax revenues generated from its construction and operation as well as increased mining.

The Canada Infrastructure Bank and private equity firms have committed some financing, but there remains a funding gap, which proponents are urging Freeland to address in her budget.

The Kivalliq hydro and fibre optic line falls into the category of a nation-building project that would tie Canada’s largest and most remote territory into the country’s economic fabric. Led by the Inuit themselves, the project represents an opportunity for true reconciliation with Indigenous people who are often forgotten by southern Canadians.

Nunavut hydro line to bring clean power to thousands

The transmission line and fibre optic cable would start in Gillam in northeastern Manitoba, running through boreal forest then over permafrost to the Hudson Bay communities of Arviat, Whale Cove, Rankin Inlet and Chesterfield Inlet before turning inland to Baker Lake. The total population of those five towns is approximately 15,000.

It would also service two Agnico Eagle gold mines and would support development of other proposed mines in the territory, Kakuktinniq says.

The Nunavut hydro line project would be rated at 150 megawatts of electricity transmission capacity and will have fibre optic bandwidth of 1,200 gigabits per second.

In a pre-budget submission, Nukik says the power from the transmission line would displace 138 million litres per year of diesel, which would dramatically reduce ship traffic in Hudson Bay. Ultimately, it would also spur the development of local renewable resources such as wind and hydro power, which would complement steady supply from Manitoba.

The federal government has supported similar projects to encourage remote and Indigenous communities to lessen their reliance on diesel, which is dirty and will be increasingly expensive as a warming climate threatens the utility of winter roads.

Ottawa and Ontario announced in 2018 that they would provide $1.6 billion to the Wataynikaneyap transmission project, which will deliver power to 17 communities across 1,800 kilometres in northwestern Ontario.

This would open up the potential for economic activity in Nunavut.

-David Kakuktinniq, president of both Nukik and Sakku Investments Corp.

Manitoba Hydro – which is proposed as the electricity supplier for the Kivalliq hydro line – is publicly unenthusiastic about the project with its northern neighbour.

“Manitoba Hydro does not have the long-term supply of power to meet the future needs of the communities and mines in Nunavut,” spokesman Bruce Owen said in an emailed statement. He noted that the Kivalliq project would account for nearly one-quarter of the 695-megawatt capacity from Manitoba Hydro’s recently completed Keeyask hydro project located on the Nelson River.

“We remain committed to exploring opportunities that are in the best interest of Manitobans and leveraging our clean and renewable hydropower for Manitoba’s domestic needs,” Owen said.

Manitoba is already a major electricity exporter and recently expanded its transmission capacity to the United States and Saskatchewan.

Kakuktinniq is unfazed by Manitoba Hydro’s comments, characterizing them as an “opening position.”

“It’s almost an expected response – you’re going to see some posturing,” he says, adding he hopes the tune will change when the Manitoba and federal governments become fully engaged in the discussions. “It’s not a problem without a solution.”

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Over the next decade, up to $1 billion in annual funding will be needed to protect and restore habitats, meet global conservation goals and reduce atmospheric greenhouse gases using nature-based solutions, according to assistant professor Diane-Laure Arjaliès and fellow researchers at the University of Western Ontario’s Ivey Business School.

“The biodiversity and climate crisis will not slow down if we are just going to rely on the government, so let’s find a solution,” says Arjaliès, who since 2019 has worked with Carolinian Canada, a national conservation organization; local environmental groups; and First Nation communities in southern Ontario in the design and evaluation of the Deshkan Ziibi Conservation Impact Bond (the Anishinaabe name for the Thames River).

The bond, being piloted over a five-year period, aims to attract new sources of capital beyond traditional government grants and private philanthropy for a highly populated, ecologically threatened section of the Carolinian zone.

A social finance firm made the initial investment in the bond, with government, private sector and NGO partners committed to repay the funds with interest if goals of native tree replanting and conservation improvements of 150 acres near London, Ontario, are reached over five years. Ultimately, Carolinian Canada and its partners aim to renew 1,000 acres in the zone.

Significantly, the bond’s designers adopted the principle of “two-eyed seeing” that recognizes the duality of Indigenous and Western perspectives, with First Nation communities acknowledged as co-partners bringing culturally valid approaches to land stewardship. 

“We brought a different perspective into the development of the conservation impact bond that is not typically included, [namely] the human connection, the cultural component and the fact that we see the land as kin,” says Emma Young, senior environment officer for the Chippewas of the Thames First Nation. Meaningful collaboration, she adds, is akin to “weaving a stronger rope.”

Ivey’s Arjaliès says she is “confident” of the potential to scale up conservation bonds globally, assuming investors are willing to be patient for the long-term reward: a healthy, sustainable environment.

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Then, of course, COVID happened. The day we announced to our staff that I would be the new CEO of the Canadian Council for Aboriginal Business (CCAB) was also the last day we all worked in the office together. On March 16, 2020 we began working remotely to help stop the spread of a new virus that had begun to sweep across the globe. Since then, I have seen businesses and communities pull together in formidable ways, but there’s no denying that the pandemic has been particularly hard on Indigenous businesses.

In May, we launched a survey in partnership with the Indigenous Business COVID-19 Response Taskforce to understand the impact of the pandemic on Indigenous businesses. The results were deeply worrying. Just under half (44%) of Indigenous businesses indicated that, without support, they were likely to fail after three to six months, while 10% of businesses predicted operations could not last more than a month without support; 2% said their businesses had already closed.

There were also some stark differences between demographic groups:

• 61% of women-owned Indigenous businesses reported a “very negative” impact compared to 53% of men-owned businesses.

• 38% of Inuit-owned businesses experienced a revenue drop of 50% or more, compared to 27% of Métis and 31% of First Nations–owned businesses.

While the federal government was quick to announce support for Canadian businesses last spring, Indigenous businesses were initially ineligible for some programs because of their unique business or tax structures. There was also no initial support for the more than half of Indigenous businesses that don’t use traditional financial institutions to access financing, in particular those owners who live on-reserve and lack the collateral typically used to get a loan. The pandemic has only highlighted that Indigenous businesses face distinct barriers. Limited access to financing, unreliable internet access, lack of adequate infrastructure, and limited personal net worth are some of the key issues that have been exacerbated over the past year. Economic reconciliation means addressing these barriers.

Understanding the unique ways that Indigenous business, and as a result the Indigenous economy, operates – much of which has been out of necessity – is a key element to ensuring equitable access to resources. And if Indigenous-owned businesses are to thrive, they’ll need more than just better access to loans, financing and COVID-response programs. In 2019, the Government of Canada committed to having “at least 5% of federal contracts awarded to businesses managed and led by Indigenous Peoples.” Though that figure has been as low as 0.32% some years, CCAB research demonstrates that Indigenous businesses in Canada could meet up to 24% of the federal government’s current spend.

Despite the barriers that Indigenous people have faced since contact, they have persisted. That determination was demonstrated last spring, when many Indigenous businesses pivoted their operations to supply personal protective equipment to help meet increased demand. Our survey identified 84 businesses providing PPE and 57 that could quickly retool to do so. However, there was little evidence of the federal government meeting its 5% target on PPE contracts.

Through our Aboriginal Procurement Marketplace, we already connect 72 Procurement Champions – Canadian companies that have committed to Indigenous procurement – with hundreds of businesses certified to be 51% or more owned and controlled by Indigenous people, through the Certified Aboriginal Business program. By increasing Indigenous procurement, corporate Canada can be part of moving the dial on economic reconciliation – a mutually beneficial opportunity that supports the Indigenous economy without affecting a corporation’s bottom line.

Initial results of a second survey to see how Indigenous businesses are faring nearly a year into the pandemic demonstrate that although things are more optimistic for business owners, they still report negative impacts, particularly on revenues and staff. They continue to face challenges accessing government support. Despite the odds, Indigenous businesses like media company Kejic Productions, cosmetic start-up Cheekbone Beauty and skincare company Satya Organic have seen impressive growth this past year. As economies recover from the pandemic, we want to build on that growth.

As our 2020 COVID survey showed, recovery will be a particularly volatile time for Indigenous businesses as they navigate additional barriers, but Indigenous businesses have demonstrated capacity, determination and innovative thinking in the face of the pandemic. It’s more important than ever that as we reopen and rebuild, we ensure that we build an inclusive, more equitable economy that benefits us all.

Tabatha Bull is president & CEO of the Canadian Council for Aboriginal Business.

This article is part of our Indigenous Economy Rising cover series from Corporate Knights Spring Issue, out April 21, 2021.

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In early May, the Prime Minister unveiled a new “bridge loan” program to support large businesses recovering from a pandemic economy. Among the conditions, companies must demonstrate how they will contribute to federal climate targets for decarbonization. By encouraging carbon offsetting in the plan, Canada has an opportunity to further reconciliation with Coastal First Nations and ensure our economies are not left behind in the recovery plan.

The Great Bear Rainforest Carbon Project – led by nine coastal First Nations – is the world’s largest forest carbon initiative. Vast amounts of carbon are stored by old growth trees in the Great Bear Rainforest on the North and Central Pacific Coast and Haida Gwaii. The forests here represent one quarter of the world’s remaining coastal temperate rainforests. As coastal people, who have lived here for 14,000 years, we know that keeping ocean and forest ecosystems healthy is the key to preserving our way of life.

To create a sustainable economy, coastal First Nations looked beyond the destructive resource extraction model common to our coast 20 years ago. In 2000, the Coastal First Nations began working with BC on land use planning. A landmark 2006 agreement lead to the protection of the Great Bear Rainforest, making 85% of the rainforest off-limits to industrial logging. Then in 2009, when the two Parties signed the Reconciliation Protocol, it allowed for the validation and sales of carbon credits. ​

Corporations looking to take steps to meet their emission reduction targets can invest in protecting that rainforest with Great Bear Carbon Credits. All revenue from offset sales goes directly back into First Nations stewardship of our lands and waters, and supports projects to ensure traditional governance and community well-being.

Building off land use agreements, this carbon sequestration funding model also contributes to the adjacent coastal and marine areas.  The carbon offsets support the innovative funding model of the Marine Planning Partnership for the North Pacific Coast (MaPP), globally recognized as the gold-standard for collaborative marine use planning. MaPP undertakes marine ecosystem-based management with 17 First Nations and British Columbia.

Carbon offset sales support Coastal Guardian Watchmen who are highly-trained and experienced guardians of land, water, wildlife and cultural sites. In Kitasoo/Xais’xais territory on the Central Coast, Guardian Watchmen have led monitoring of world-renowned grizzly bear habitat and eradicated illegal hunting.

With dwindling government resources for science research, the carbon finance model has helped First Nations stewardship offices undertake some of the most advanced –and in some places, the only – species monitoring and wildlife data collection on the BC coast. As well, climate change research and planning by communities is taking place. This is science that benefits all Canadians. In Heiltsuk territory, offset funds provide core funding for advanced scientific research on crab, rock cod and invasive species to inform a sustainable approach to Indigenous fisheries management. Offset revenue also finances stewardship activities to monitor at-risk whales and Pacific salmon species in Haida Gwaii.

Carbon financing also offers a source of long-term funding for communities to explore meaningful opportunities for renewable energy projects on a diesel-dependent coast, sustainable shellfish aquaculture, ecotourism and non-timber forest product ventures.

The Great Bear Rainforest Agreements have put in place a world-leading model of ecosystem-based forestry management: 85% of our coastal temperate rainforest is set aside for protection and is now permanently off-limits to industrial logging.

Towering old-growth trees that reach up to 1,000 years in age can still be found in our territories. Our streams and rivers sustain 20% of the world’s wild salmon. Rainforest, ocean estuaries, fjords and islands support remarkable biological diversity – including iconic species such as grizzlies, Spirit bears and black bears, coastal Pacific wolves, humpback and killer whales and six million migratory birds.

The Great Bear Forest Carbon Project offers Canadian businesses and governments the chance to build back better in the wake of COVID-19 by working with Coastal First Nations to protect the world’s largest intact temperate rainforest right here on our Pacific Coast.  In the effort to regain lost economic momentum during the pandemic, buying Great Bear credits is an opportunity to invest in a conservation economy that balances ecological integrity with human well-being.

As the country works to revitalize the national economy and meet its 2050 climate goals, Canada must ensure First Nations economies are not left behind and build the new normal together. The federal government has the opportunity to support investment in sustainable jobs in our communities and protect climate resiliency by conserving one of the world’s largest carbon storage rainforests for future generations.​

Chief Marilyn Slett is president of the Coastal First Nations.

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This is just one of many examples of Indigenous peoples reclaiming their space in the Canadian economy. Before European contact, Indigenous peoples had a robust trade economy. In 1867, through the Indian Act, Indigenous inherent economic rights were systematically and expressly stripped. Today, through examples like the Tahltan Nation investment, we see that Indigenous peoples are reclaiming their rightful place in the fabric of Canada – especially in business.

As president and CEO of the Canadian Council for Aboriginal Business (CCAB), and in my experience as a board member at the Ontario Power Generation, I have seen how business can be the most expedient route to lifting our communities out of poverty and getting us closer to economic reconciliation. At the same time, we’re seeing a strong push around the world for more renewable energy sources and environmentally sustainable businesses.

A good example is the 300-megawatt wind farm in Ontario that was built as a collaboration between the Henvey Inlet First Nation and international energy company Nigig Power Corporation. The community, in partnership with Pattern Energy, raised more than $900 million in senior debt to be a 50% equity stakeholder. Interestingly, the financing came from 26 lenders from around the world, none of them Canadian.

Sources of energy in this country need to diversify, and as the number of energy projects grows, we have an opportunity for reconciliation through strong inclusion and participation of Indigenous peoples and businesses.

As more renewable projects move ahead, there are four key aspects to meaningful Indigenous participation in infrastructure or energy projects, or “four directions of sustainability,” to keep in mind. They mirror the four quadrants of the Medicine Wheel and they benefit everyone involved, from project inception to development and eventual decommissioning.

1. Community Buy-In

Community buy-in is key for sustainability. It’s not only the right thing to do; it also makes good business sense. Energy projects benefit from accessing the traditional knowledge holders and Elders in our Indigenous communities and their valuable contributions to sustainable development endeavours. Having this knowledge base at the table from inception to development, and in some cases to closure or remediation, of land is powerful.

In addition to listening to the local community and Elders, it’s a great asset to have Indigenous community leaders actively involved in these projects from the beginning.

One of the main aspects of CCAB’s Progressive Aboriginal Relations (PAR) program, a corporate-social-responsibility initiative with a focus on Aboriginal relations, is to ensure Indigenous inclusion from the top down. As a start, OPG has included Indigenous leaders like Mohawk leader and activist Roberta Jamieson and now me as part of its board. Over the years, OPG has developed numerous equitable partnerships with Indigenous communities:

• The 28-megawatt Peter Sutherland Sr. Generating Station project, where Taykwa Tagamou’s subsidiary Coral Rapids Power has a one-third equity interest.

• The $26-billion, 438-megawatt Lower Mattagami River Project, of which the Moose Cree First Nation owns 25% equity.

• As well, the 44-megawatt Nanticoke Solar Project (the former home of Ontario’s Nanticoke coal plant) was developed in partnership with Six Nations of the Grand River Development Corporation (15%) and the Mississaugas of the Credit First Nation (5%).

Without that community buy-in, energy projects won’t have access to valuable traditional knowledge from Elders nor the support of Indigenous leaders.

Indigenous peoples have unique rights and a special constitutional relationship with the Crown, and depending on the circumstances, the duty to consult is a mandatory part of an evolving legal framework that could affect business.

2. Community Procurement

Aboriginal businesses are growing at nine times the rate of non-Aboriginal businesses and have the capacity to supply 24% of the federal government’s total business contracts, according to CCAB’s recent Industry and Inclusion: An Analysis of Indigenous Potential in Federal Supply Chains report. Federal procurement spending through the Procurement Strategy for Aboriginal Business (PSAB) accounts for an average of less than 1% and has been as low as 0.32% of total annual federal procurement spending since 1996. In the recent election, the federal government made a commitment to increase its Aboriginal procurement spending to the 5% target that CCAB has been calling for – in line with the Indigenous population in Canada. Hitting this target would put more than a billion dollars into the Indigenous economy.

The generation of revenue for Aboriginal businesses and communities is a key driver of economic reconciliation, and it’s mutually beneficial.

With community procurement, you’re empowering a whole support system and supply chain around your project – and that’s good business for everyone. Why would a company import a good or service when it can tap into local Indigenous resources, expertise and understanding of cultural nuances; develop a human resource base; and, quite frankly, respect Indigenous rights through business?
3. Business Acumen Development

There is enormous opportunity for Indigenous communities to increase business acumen and create capacity through energy projects. Learning by doing is key in business, and building practical knowledge and management experience provides a pathway to economic reconciliation. Indigenous communities and businesses have largely been locked out of the economy, and only in the last 20 or 30 years have we been rebuilding our business acumen in a modern context. It’s going to take time. We’re going to have our bumps and bruises along the way, but it’s a necessary process.

4. Community Investment

Shared revenue generation on energy projects can occur through either shareholder equity or royalties. Royalty payments to communities is certainly the safe route. It’s not the one that I personally favour, but every business deal is different and needs to be weighed carefully. At the end of the day, equity, when communities share in the ownership of a business, means the communities are more engaged and involved in business ventures.

Government funding is also important. The Government of Alberta, for example, recently created the Alberta Indigenous Opportunities Corporation (IOC) to provide loan guarantees through a $1 billion fund to Indigenous groups that want to invest in the energy sector. While this is great progress, there are still too many Indigenous people living in poverty. Many Indigenous leaders hold government accountable to their fiduciary responsibility, but when accessing government funds, communities can’t typically spend outside the box set out, nor is the funded money nearly enough. That funding can also come and go with every change in government. That’s why self-empowerment is crucial to allow communities to generate their own revenue and make decisions on where to spend resources.

By participating in partnerships, we go back to the original intent of the treaty, which recognizes our rights as Indigenous peoples. The idea of treaty is the sharing of resources. When communities are participating as equity owners, we create champions of these projects, which creates certainty and reduces risk to the bottom line.

There is still a long way to go when it comes to investing in Indigenous communities and businesses. Our recent Moving Capital, Shifting Power report finds that institutional investors have a golden opportunity to generate more demand for Indigenous employment, advancement and growth of Aboriginal businesses.
I challenge those developing new infrastructure and energy projects to look broader and deeper into the Indigenous community for leaders, entrepreneurs and knowledge keepers. Indigenous peoples are Canada’s original entrepreneurs. It’s time to think outside the box and discover the potential Aboriginal partnerships can provide.

JP Gladu is the outgoing president and CEO of the Canadian Council for Aboriginal Business.

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On February 21^st in Ottawa, SHARE (a leader in responsible investment services, research and education) and the National Aboriginal Trust Officers Association (NATOA) co-hosted the first ‘Reconciliation and the Indigenous Economy: The Role for Institutional Investors’ forum.

Attended by over 100 participants, the event brought together Indigenous business leaders and institutions from all around the country to discuss a new and emerging opportunity for institutional investors in the growing Indigenous economy.

Building on the premise that Indigenous people have been systematically excluded from the economic table of this country over time, the forum generated thoughtful insights into the role of the investor in economic reconciliation today. It offered the space to connect with Indigenous leaders, businesses, philanthropists and asset managers to facilitate new opportunities for investment in the Indigenous economy.

It also served as a convergence of purpose —  to establish a clear focus on the leadership needed to increase investments in the Indigenous economy.

The United Nations Declaration on the Rights of Indigenous Peoples, which was adopted by the UN general assembly in 2007 and calls for the Indigenous right to an economy, helped lay the groundwork for examining the role of institutional investors in the emerging Indigenous economy. In line with the Truth and Reconciliation Call to Action #92, which calls for respectful and meaningful relationships with Indigenous peoples, the Ottawa forum focused on encouraging an institutional investment environment that develops long-term sustainable opportunities for economic development projects with Indigenous communities.

Building on existing national strategies, such as the work of the Canadian Council for Aboriginal Businesses’ Progressive Aboriginal Relations (PAR) and Supply Change programs, the forum highlighted pathways for engagement within the Indigenous economy and ways to overcome barriers around access to capital.

Indigenous business leaders brought a clear voice to the forum. Clint Davis’ work at North 35 Capital helps Indigenous nations achieve growth and value creation by maximizing their inherent competitive advantage. Davis highlighted the strategic advantage of Indigenous economic inclusion and the need for collaboration in overcoming financial barriers and challenges.

Shannin Metawabin, CEO of the National Aboriginal Capital Corporations Association, pointed out the significance of the growth of the Indigenous economy and the need for increased access to capital, particularly through national Canadian government funding. He noted that rectifying the under-capitalization of the Indigenous economy should be a central theme in the economic reconciliation narrative of this country.

A recently released Manitoba First Nation economic impact report pegged the regional Indigenous economy at an estimated $9.3 billion annually. The national Indigenous economy has been estimated at $30 billion. There is enormous opportunity for strategically aligning Indigenous economic development and the investment environment in Canada.  A $100 billion Indigenous economy is possible. The forum made it clear that the time for institutional investing in reconciliation is now.

Carol Anne Hilton is the CEO and founder of the Indigenomics Institute

Also by Carol Anne Hilton from Corporate Knights’  Spring Issue: Indigenomics in Action 

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