“In order to be in business,” Chief Terrance Paul of the Membertou First Nation told CBC News last month, “you first have to play the game. You have to play to win, and we won.”
The November 9 announcement of the $1 billion purchase, in partnership with Vancouver-based Premium Brands Holdings Corp., of Clearwater Seafoods Inc. by the Membertou and a coalition of First Nations may have appeared to come out of the blue. It didn't.
The Mi’kmaq nation of Membertou is one of the more prosperous First Nations in Eastern Canada, with $67 million in revenue last year from diversified interests ranging from fishing to real estate. With this 50% stake in Clearwater Membertou and its partners vault into a much higher sphere of the Canadian corporate universe.
As newsworthy as that story is, it’s not an isolated event. Across Canada, First Nations are leveraging their way into ownership positions in key industries. The trend represents a sea-change in Canada’s corporate culture — one that law firms need to catch up to if they don’t want to miss the opportunities.
“What it all demonstrates is that while the political path to reconciliation is slow, there are simpler, more constructive, more direct ways to get there,” said Merle Alexander, a prinicipal at Miller Titerle + Company in Vancouver, a member of the Kitasoo Xai’xais First Nation.
First Nations making plays for major revenue-generating properties has so far been mostly concentrated in Western Canada, but it’s moving east. Since 2004 — when the Supreme Court of Canada mapped out the Crown’s responsibility to consult First Nations on projects affecting traditional territory (the “duty to consult,” or DTC), the Haida Nation has become the largest forestry leaseholder on Haida Gwaii. Its corporate arm reports $22 million in assets and $35 million in annual sales.
Three years ago, the Fort McKay and Mikisew Cree First Nations acquired a $503 million piece of the East Tank Farm portion of the Fort Hills oilsands mine near Wood Buffalo, Alberta. Not long after Membertou announced the Clearwater deal, First Nations in Fort Chipewyan, northern Alberta, celebrated the completion of the Three Nations energy project, the largest remote, off-grid solar farm in the country.
In early 2018, the Ontario government announced the sale of 2.4% of Hydro One’s outstanding common shares to a limited partnership controlled by 129 First Nations. A year later, Hydro One announced the completion of a new transmission line through a joint venture between the Six Nations of the Grand River Development Corporation and Aecon Group Inc. And even as many western Indigenous communities fight to halt the Trans Mountain pipeline expansion project, a coalition of First Nations in the region is looking to buy at 51% stake in it.
Many of these transactions share a common trait — they’re not entirely about profit. Sometimes, they’re the result of a First Nation asserting control over work being done on traditional territory. Sometimes, they’re driven by a desire to fix persistent infrastructure gaps. Fort Chipewyan’s solar project is expected to reduce the amount of diesel the isolated community consumes by about 800,000 litres per year. Often, they’re inspired by the need to cut unemployment.
Lawyers looking to work with First Nations on such projects need to understand that the goals of an Indigenous corporation aren’t going to be identical to those of the average Bay Street titan, said Brian Hebert of McKiggan Hebert in Halifax.
“In the case of Membertou, for example, the First Nation may be looking to get more Mi’kmaq people employed in the fishery,” said Hebert, who has done work for the Pictou Landing First Nation in Nova Scotia.
“That’s not the sort of thing that, say, a teachers’ pension fund is going to worry about.”
The first step toward understanding what an Indigenous corporate client wants is the acquisition of cultural competency — which involves a lot more than knowing one’s way around the Indian Act, said Tuma Young, a solo practitioner who teaches Indigenous studies at Unama’ki College, Cape Breton University.
“You can’t just come to them and say, ‘Guys, I can do great things for you in mergers and acquisitions,’” he said. “And knowing a lot about Aboriginal law just means knowing how Canadian law applies to Indigenous people.
“It’s also really important to know how Indigenous legal traditions themselves work — how, say, the Mi’kmaq people view collective versus individual rights in commercial enterprises. These are things that every law firm in the country should want to understand.”
Across the country, law societies are moving to make Indigenous cultural competency part of lawyers’ professional development training, and the Canadian Bar Association offers an online program — a response to one of the calls to action in the Truth and Reconciliation Commission’s final report. The fact that universities are turning out more Indigenous lawyers now gives firms another point of access, said Alexander.
“The simplest thing they can do is hire more Indigenous lawyers. Learn from the people with direct experience,” he said.
“I think too many large firms are taking a kind of labour law approach to aboriginal law — the idea that they have to be on the corporate side or the Indigenous side, not both. In the long run, litigation involving Indigenous rights is going to decline as those rights get ironed out in the courts. But in many law firms, there’s still this antique notion that Indigenous clients are entirely adversarial.”
The happy irony here, said Alexander, is that the DTC process itself may be blurring the old division between corporate and Indigenous Canada. Governments have largely delegated the work of DTC to the private sector. First Nations have been negotiating benefit agreements with these companies and getting shares in return. In the process, they’ve also gotten a crash course in how these companies work.
“It’s had the effect of bringing these companies and Indigenous communities closer together,” he said. “They’ve been educating each other. They’re learning to respect each other and find ways to get things done in their mutual interest — and they’re finding they have more of those interests in common than maybe they thought.”
So what does all this mean for the reconciliation project? Like the song says, money changes everything. First Nations with reliable revenue streams will acquire more autonomy and political clout as those revenue streams grow.
“Economic power and political power are, ultimately, the same thing,” said Alexander. “If you can influence the economy of a province, you can influence its politics as well.”
“What lawyers need to understand is where Indigenous communities here see themselves headed,” said Young. “To become the biggest fish processors in the world? Absolutely. What else?
“Here in Nova Scotia, we’ve got a Mi’kmaw health authority. They’re going to need legal counsel. I wouldn’t be surprised to see a separate justice system here in ten years’ time. A Mi’kmaw bar? Why not?”