May 31, 2012, is the deadline we had set for Aboriginal groups along the proposed route of the Northern Gateway pipelines to indicate their acceptance of the offer of a 10 percent equity stake in the $5.5 billion project. We’re pleased to confirm that, as of the deadline, a majority of the groups eligible to participate as equity owners have signed up to do so.
Almost 60 percent of eligible Aboriginal communities along the proposed right of way, representing 60 percent of the First Nations’ population (and 80 percent of the combined First Nations’ and Metis’ population) have agreed to be part owners of the proposed Northern Gateway pipelines. Half of the equity units taken up went to groups in British Columbia, and the other half to groups in Alberta.
The most significant way in which Aboriginal people can benefit from the Project is by owning a stake in it and sharing in the revenue it produces. Through equity ownership, Aboriginal people will be able to generate a significant new and stable revenue stream that could help achieve the priorities of their communities – such as improved health care, education and housing. The long-term financial benefits for participating as shareholders will be significant. Aggregate equity ownership is expected to generate approximately $280 million in net income to Aboriginal communities over the first 30 years. Becoming an owner in this project means Aboriginal groups are going to see significant cash flow within the first year of operations.
We greatly appreciate the careful consideration of the Aboriginal groups who have opted to take an ownership stake in the project and who will now be our partners in realizing the economic benefits of Northern Gateway. We are contractually prohibited from disclosing the identities of our Aboriginal partners at this time. Public disclosure is a matter for individual communities.
Northern Gateway wants to facilitate maximum participation of Aboriginal communities in meaningful economic opportunities that arise from the project, including equity ownership, directed procurement, employment, and Aboriginal set asides. We have already begun organizing meetings with our new partners to discuss training, employment, procurement and joint venturing opportunities that will build upon the foundation of equity ownership.
We are pleased and proud of the overall majority sign up level – but we want to emphasize that this is just the start of a bigger initiative oriented to progressively building social license along the proposed project corridor. While the equity offering is significant, it represents less than 1/3 of the total potential Aboriginal benefits we are proposing and still developing ($1 Billion). Acting on input from Aboriginal groups and stakeholders, we have developed a package of environmental and economic commitments for the communities along the route, including coastal communities, which includes:
We believe these commitments break new ground by providing an unprecedented level of long-term economic, environmental and social benefits to the North. Our proposed project corridor touches on hundreds of thousands of people – and the overall Project will have positive impacts on millions of Canadians.