A new report by the Royal Bank of Canada is highlighting the critical role of Indigenous Peoples in the transition to net zero emissions (1).
According to RBC, national goals to reduce emissions are inextricably linked with Indigenous communities, highlighting the “…incredible value that Indigenous capital, knowledge and decision-making can bring to a Net Zero transition.”
Indigenous lands are home to a vast wealth of natural resources such as critical minerals that will play an essential role in an energy transition. Additionally, many of Canada’s best solar and wind land plots are also on Indigenous lands.
Hence, Canadian governments and natural resource companies must embrace Indigenous Peoples as full partners in development, helping these communities generate own-source revenues while also moving towards a cleaner energy future.
It is up to us all to break down the barriers that would prevent the full realization of Indigenous capital says RBC, a move which would also help usher in economic reconciliation for First Nations.
92 to Zero: Key Findings
RBC Capital Markets
Key findings of the discussion (taken from the summary):
• Canada’s road to Net Zero will rely heavily on vital sources of capital held by Indigenous nations. RBC estimates Canada needs roughly $2 trillion in capital over the next 25 years, much of it from Indigenous sources—or unlocked by Indigenous partnerships, including ownership.
• An Indigenous-led approach to the climate transition, and economic opportunities toward Net Zero, will be essential to economic reconciliation.
• Specifically, to achieve Net Zero and economic reconciliation, Canada needs to leverage four forms of Indigenous capital:
Natural Capital: Indigenous lands hold vast resources essential to green energy systems, and will be essential to the clean tech revolution. At least 56% of advanced critical mineral projects, 35% of top solar sites and 44% of the better wind sites involve Indigenous territory.
Financial Capital: The growing wealth of Indigenous communities includes an estimated $20 billion in trust assets and up to $100 billion in outstanding land and other claims. This capital will be critical to “crowding in” billions of dollars in private and public clean energy investment for Net Zero initiatives.
Intellectual Capital: Incorporating Indigenous values and traditional knowledge in the transition will lead to more sustainable and profitable outcomes. It can establish Canada as a leader in regenerative techniques, the preservation of biodiversity, and nature based carbon solutions—a powerful advantage as Canada competes with other countries for capital to finance the energy investment.
Human Capital: Emerging young Indigenous leaders and entrepreneurs will be critical generators of the innovative thinking needed to fuel the green transition. And as the fastest growing youth cohort, Indigenous Canadians can help power a Net Zero workforce that will include valuable jobs in skilled trades, advanced technology, business ventures and more.
Other Important Highlights:
> Indigenous communities must be engaged as true partners to realize net zero emissions. That means including their voices, values, knowledge and decision-making from the earliest project stages.
> At least 56% of the $60 billion in new critical mineral projects are on Indigenous lands, including 26% within 20 kilometres of Indigenous reserves, settlement lands, and other title-like areas, and another 30% on unceded territories where Indigenous rights are asserted.
> At least 35% of the top sites for the required $30 billion in solar development are near title-like lands.
> At least 44% of the better sites for the needed $135 billion in wind development are near title-like lands.
> Indigenous equity ownership of new energy projects is rising. Equity improves the risk profile of projects through ongoing information sharing and the ability of both parties to shape their direction.
> As Canada seeks to build a prosperous economy while minimizing environmental damage, preserving biodiversity, and developing nature-based carbon sinks for climate management, Indigenous knowledge and ways of knowing will become critical competitive advantages.
A Game Changer for Indigenous Peoples
RBC Capital Markets
Many Indigenous Peoples in Canada live in rural communities with little to no economic opportunities in sight. As a result, many Indigenous Peoples are also impoverished.
According to the Canadian Poverty Institute, First Nations experience the highest poverty levels: a shocking 1 in 4 Indigenous Peoples live in poverty as do 4 in 10 of Canada’s Indigenous children (2).
Yet, in Canada, countless First Nations communities are located within relatively close proximity to natural resource projects.
For example, the Mining Association of Canada says there are over 209 producing mines and more than 2,500 exploration properties located within 200 kilometres of Indigenous communities across the country (3).
Such natural resource projects could help First Nations obtain own-source revenues and uplift many rural communities out of abject poverty.
And in many instances, they already do.
Look no further than the $6.4 billion spent by LNG Canada, Coastal GasLink and Trans Mountain Expansion on Indigenous-owned and local businesses for an example (4), or the $15 billion spent by oil sands producers on Indigenous businesses since 2012 (5). Or, the 16,500 Indigenous Peoples employed by the mining sector (3), 11,600 employed in forestry (6), or 10,400 who work in oil and gas (7).
Supporting the responsible development of Canada’s natural resources while simultaneously promoting economic reconciliation with Indigenous communities is a no-brainer.
Indigenous Peoples deserve the opportunities that all Canadians have as well, do they not?
Working Towards Economic Reconciliation
RBC Capital Markets
Stronger say over local project development, increasing wealth, and a recognition of the value of Indigenous knowledge is empowering a new generation of Indigenous Peoples and entrepreneurs.
The Indigenous economy is outpacing the growth in the national economy, increasing from $30 billion annually in 2016 to an estimated $100 billion by 2024 (1) - significant growth, and there is more to come, says RBC.
Indigenous-led business and advocacy groups are leading the way, connecting the dots between sustainable economic development, investment sources and their communities. Some of those organizations include the First Nations Major Projects Coalition (FNMPC), Indigenous Resource Council (IRC), Canadian Council for Aboriginal Business, and Indigenous Resource Network (IRN) to name a few.
Canada has a vast wealth of natural resources produced to some of the highest social and environmental standards globally. By developing these resources and partnering with Indigenous Peoples, Canada can be a bastion of stable and responsible supply for everything from oil and natural gas to forestry and mining products.
Canadians can also begin speeding up a long-overdue process: making progress on economic reconciliation with Indigenous communities who are saying “yes” to responsible natural resource development.
Remote Indigenous communities often have challenges not seen in urban settings, one of which is access to long-term, well-paying jobs. Therefore, focusing on Indigenous values and goals as part of natural resource development is critical if Canada is to move forward on the path toward economic reconciliation with these communities across the country.
1 – Royal Bank of Canada – 92 to Zero, Date Accessed: July 15th, 2022 (https://thoughtleadership.rbc.com/92-to-zero-how-economic-reconciliation-can-power-canadas-climate-goals/)
2 – Canadian Poverty Institute – Poverty in Canada, Date Accessed: July 16th, 2022 (https://www.povertyinstitute.ca/poverty-canada)
3 – The Mining Association of Canada - Indigenous Employment, Training and Procurement, Date Accessed: July 16th, 2022 (https://mining.ca/our-focus/indigenous-affairs/indigenous-employment-training-and-procurement/)
4 – Canadian Energy Centre – Facebook Post, June 16th, 2022, Date Accessed July 16th, 2022 (https://www.facebook.com/CDNEnergyCentre/photos/800684594672248)
5 – BMO Capital Markets – Building a Sustainable Future – ESG in Canadian Oil & Gas, Date Accessed: July 16th, 2022 (https://firstname.lastname@example.org/ID5974%20Build%20a%20Sustainable%20Future_Ev4_ACC.pdf)
6 – Forest Products Association of Canada – Communities & Indigenous Partnerships, Date Accessed: July 16th, 2022 (https://www.fpac.ca/areas/communities-indigenous-partnerships)
7 – Natural Resources Canada – Energy Fact Book 2021-2022, Date Accessed: July 16th, 2022 (https://www.nrcan.gc.ca/sites/nrcan/files/energy/energy_fact/2021-2022/PDF/2021_Energy-factbook_december23_EN_accessible.pdf)
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