David Jimmie feels an ‘internal struggle’ over his campaign to buy an oil pipeline. As chief of the Squiala First Nation, an indigenous community in Canada’s westernmost province British Columbia, he spent years in court to challenge the expansion of Trans Mountain, a pipeline stretching from the landlocked crude oil sands of Alberta to export terminals on the Pacific coast. 

The expansion, which was proposed in 2013, has trebled the system’s capacity to 890,000 barrels per day. It gained final approval in June 2019 and began pumping oil on May 1, 2024. This follows years of protests over its environmental impacts, permitting delays and a 2018 state bailout, when Canada’s government bought the pipeline for C$4.5bn ($3.3bn) from Texas-based infrastructure group Kinder Morgan. 

For Mr Jimmie, the concerns he raised over the impact on land and water from the expansion of the pipeline running past his community in Fraser Valley were barely acknowledged. He says that just one item of 89 recommendations he gave to Canada’s Energy Regulator — the pipeline’s impact on indigenous rights to fisheries — was recognised. He has now shifted from being in opposition to forming a bid to own the Trans Mountain pipeline.

“Our foundational values don't necessarily align [with fossil fuels],” says Mr Jimmie, who is chair of the Western Indigenous Pipeline Group (WIPG), an organisation formed to acquire a major stake in Trans Mountain. “But when we've exhausted every avenue through the court system and weren’t heard, the only opportunity to have that voice heard is in a position of ownership. If it’s going to happen anyway, what is the best way to be a part of it?”

The expansion of the Trans Mountain pipeline ended up costing C$34bn — more than four times the earlier 2017 cost estimate of C$7.4bn — which makes it the country’s most expensive ever. The government is now planning to divest, fuelling the WIPG hope to acquire a major equity stake in it. 

These efforts in Canada are not isolated. They are reflective of a movement amongst indigenous communities to be more involved in local economies and have a greater say over resource and infrastructure projects on and near to their ancestral lands. 

Making amends

The drive for greater economic opportunities for Canada’s indigenous First Nations people is rooted in the country’s history. After the largest multi-year class action settlement in Canada’s history, a 2015 report by the Truth and Reconciliation Commission found there was a policy of “cultural genocide” for over a century against aboriginal people, where children were separated from their families and held in residential schools beset by abuse.

In a process of making amends, the Canadian government adopted the UN Declaration on the Rights of Indigenous People (UNDRIP) in June 2021 and released an UNDRIP action plan two years later. In April 2024, the Canadian government released a much-anticipated federal programme which will offer up to C$5bn in loan guarantees to indigenous communities.

Aboriginal business groups welcome the federal loan programme as a step to help fill the estimated C$349.2bn infrastructure gap in Canada’s First Nations communities by 2030. But access to capital remains an issue, partly due to the way land is administered under Canada’s 1876 Indian Act, the federal law that administers Indian status.

“As a First Nation people, we don’t own the land that’s on the reserve. So getting a mortgage or getting a loan without having collateral has always been a barrier,” explains Tabatha Bull, the CEO of Canadian Council for Aboriginal Business. 

From mothball to execution

When capital is available, direct engagement and the offer of equity stakes to indigenous groups is a way for blocked projects to move from the “mothball phase into execution phase”, says Fred Di Blasio, the founder and CEO of Longhouse Capital Partners, an investment firm focused on opportunities that advance reconciliation for First Nations across Canada. 

A prominent example is the province of Ontario’s largest utility Hydro One. After years of litigation against its C$100m Waasigan transmission line project, nine First Nations reached an agreement with the company in 2022 to buy a 50% equity stake in the project. 

The route to Indigenous-led ownership of Trans Mountain is far from certain, though. Calgary-based oil and gas infrastructure company Pembina Pipeline Corporation (PPC), which formed a 50-50 partnership in 2021 with WIPG to pursue full ownership of Trans Mountain, says the project is “not something [they] are spending a great deal of time on” right now.

“From our perspective, there still exists a tremendous amount of uncertainty around that asset,” said Cameron Goldade, the chief financial officer of PPC, in a quarterly earnings call on May 10.

A spokesperson for Trans Mountain tells fDi that the Canadian government “is the sole shareholder of Trans Mountain, and has stated their intention for future divestiture, which will include meaningful Indigenous ownership and participation”. But Mr Jimmie notes that there is still “uncertainty over the equity offer” to the 129 indigenous communities affected by the project. 

“If we’re looking at the full divestiture of the asset, we can’t actually get into the data room and do the valuation,” says Mr Jimmie, who says currently they are waiting on the government. Some observers believe that this process may be stalled until after the country’s federal election in October 2025.

Earlier engagement is key

Given the Trans Mountain expansion took more than a decade to begin operations after legal battles and opposition, Canadian indigenous groups argue that earlier engagement would help fast-track these major projects. “If you can have communities involved from the beginning, you have a much better chance of having success,” says Mr Jimmie.

There needs to be “greater awareness” of the opportunities to work in partnership with the Indigenous Peoples of Canada, which helps projects to get community buy-in and fast-tracks the planning and permitting process, argues Mark Magnacca, the CEO of gigCMO, who co-organised an inaugural Canadian indigenous investment summit held in the City of London on May 7. 

The expanded pipeline enables greater oil exports from the west coast of Canada. As such, the path to inclusion and benefit for indigenous people is uncertain even if the WIPG’s bid succeeds. For Mr Jimmie, his ‘internal conflict’ around owning a fossil fuel project he once opposed is about looking to the future of his community. 

“If we can leverage the revenues that we gain off of crude oil, we can think about solar, wind, hydrogen, whatever it may be coming next,” he says.