First Nation and Métis Communities

The Ontario government has recognized that Aboriginal participation in the energy sector is one of the keys to the economic development of First Nation and Métis communities. Ontario also understands that these communities need opportunities to engage and participate in ways that align with their unique community needs and interests.

Ontario takes its duty to consult First Nation and Métis communities very seriously. The government is committed to ensuring that First Nation and Métis communities are consulted on any energy activity that could potentially affect their Aboriginal or treaty rights.

Ontario has brought in a range of policies and programs over the past four years to increase the involvement of Aboriginal communities in the sector:

• The Aboriginal Energy Partnerships Program helps communities plan and participate in the development of electricity infrastructure such as clean energy generation projects.
• Aboriginal participation is an important component of the Feed-in Tariff program, with price adders and contract set-asides for Aboriginal led or partnered renewable energy projects.
• The Aboriginal Loan Guarantee Program (ALGP) helps communities secure financing for their equity participation in clean energy and transmission projects. It started with $250 million, which was expanded to $400 million.

Ontario will continue to support and encourage participation by both First Nation and Métis communities in new generation and transmission projects and in conservation initiatives.

• Ontario recently launched the Aboriginal Community Energy Plans (ACEP) program, to support the energy planning activities of First Nation and Métis communities, including the identification of needs, interests and opportunities for conservation and small-scale renewable generation projects.
• The government expects to see Aboriginal involvement become the standard for the future development of major, planned transmission lines in Ontario. First Nation and Métis communities are interested in a wide range of opportunities - from procurement to skills training to commercial partnerships. When new, major transmission line needs are identified, the province expects that companies looking to develop the proposed lines will, in addition to fulfilling consultation obligations, work to involve potentially affected First Nation and Métis communities, where commercially feasible and where there is an interest.
• Ontario will also launch the Aboriginal Transmission Fund (ATF) in early 2014 to help First Nation and Métis communities undertake the due diligence required before becoming involved in new major planned transmission line projects. The fund will help Aboriginal communities examine whether economic participation in a proposed transmission line is the right choice for them, and whether a potential partnership is meaningful and will bring lasting benefits to their community members.
• Ontario will continue to encourage Aboriginal participation, including through the FIT program and the future large renewable energy procurement program.

Building local capacity and providing skills training will be critical to driving participation levels and long-term success. The province recently extended education and capacity building funding delivered by the OPA to Aboriginal communities and organizations. This funding will be available to support education and capacity-building activities that better equip First Nation and Métis communities to participate in and develop renewable energy projects and initiatives.

Ontario will work with Hydro One to expand its training and skills development initiatives for Aboriginal peoples seeking to work in the transmission/distribution sector, including working with its existing college consortium to focus on Aboriginal opportunities as it relates to trades and technicians.

Conservation can and will play an important role for Aboriginal communities that identify high electricity costs as a significant challenge. Earlier this year, the OPA launched the Aboriginal Conservation Program, which delivers direct, customized conservation information and programs to First Nation communities on reserve and outreach to urban Aboriginal and Métis peoples.

First Nation and Métis community representatives across the province have expressed a desire for conservation measures that reach a greater number of communities, as well as a desire to work with their local electricity service provider on reducing their bills.

Ontario will give LDCs an enhanced role in the delivery of Aboriginal conservation programs, particularly for on-reserve First Nation customers. Where appropriate, the province will work with federal partners to implement provincial conservation initiatives effectively.

While the government works to ensure First Nation and Métis communities have access to procurement and conservation programs that will support their economic development, it also recognizes the unique problems faced by 25 remote First Nation communities in the province’s northwest. They are not connected to the grid, and get their electricity from on-site generators burning diesel fuel. These are increasingly expensive sources of electricity that pollute the environment. For most communities, diesel fuel has to be brought in on ice roads in the winter, even though the shipping season is getting shorter because of warmer winters. When roads are not available, reliance on even more expensive airfreight is often the only option to bring in diesel fuel.

Remote First Nation Communities

The OPA developed a draft plan for connecting many of the remote First Nation communities. The OPA’s study shows that there is a strong economic case for connecting up to 21 of the remote First Nation communities with new transmission and distribution lines. The OPA’s analysis indicates that over the next 40 years, grid connection could be 30% to 40% less expensive than the continued use of diesel fuel. Such savings would amount to about $700 million in avoided costs for the parties who currently subsidize and fund the diesel systems - the federal government and the province.

Connecting the remote communities is a priority for Ontario. Ontario will continue to work with the federal government to connect remote First Nation communities to the electricity grid or find alternatives where it is not economically feasible to do so.

Since the release of the draft Remote Community Connection Plan, the OPA has engaged most of the participating communities and received feedback. The OPA is planning to engage the remaining communities so that the plan can be updated and finalized by the end of 2013. As mentioned in Chapter 4 - Investing in Transmission, a key first step to connecting some of the remote communities will be the new line to Pickle Lake.

Success in connecting the remote communities will depend on contributions from all of the parties that benefit from the new transmission lines and other infrastructure, particularly the federal government, whose commitment and co-operation will be required to make this priority project a reality. The federal government, which is responsible for supporting First Nation community infrastructure, would also share in the savings, as the costs associated with using diesel fuel would be reduced.

The federal government would receive additional benefits beyond the diesel related savings. Once the remote communities are connected, there would be a reduction in the environmental impact and environmental liabilities associated with diesel spills, lower greenhouse gas emissions, improved social and living conditions for remote community residents, and increased opportunities for economic development within First Nation communities.

Because of these benefits, and its current responsibility for costs in remote communities, federal participation is a critical element in moving forward to connect remote communities. The project will not be possible without it.

Another important step in the connection of remote communities will be the development of transmission and distribution plans by proponents interested in the connection of remote communities, and securing all required approvals.

While transmission appears to be the most economic solution for up to 21 of the 25 remote First Nation communities, there may be more cost-effective alternatives for the remaining First Nation communities. Ontario will continue to explore other opportunities to reduce diesel use in the north for these communities.

Preliminary studies by the OPA indicate that, within these First Nation communities, renewable generation can be integrated into the existing diesel-based electricity systems in a cost-effective manner. Alternative options are being considered that could significantly reduce the use of diesel fuel and result in a cost saving of approximately 20%.

The province will work with the federal government, energy partners and communities to support innovative solutions for supplying electricity in these remote First Nation communities, including consideration for on-site renewables, micro-grids and conservation. Ontario has already started focusing on conservation opportunities through its Aboriginal Conservation Program, which has a dedicated category for remote communities.

The OPA will continue to work with these remote communities to identify and develop on-site options for reducing their dependence on diesel fuel. The implementation plans (expected by the end of 2014) will consider community economic development interests, such as the use of renewable or other generation opportunities that may be identified, as well as the opportunities for federal and provincial funding.

The government remains committed to an on-going and regular dialogue with First Nation and Métis communities. Ontario will work with Aboriginal leadership to identify effective mechanisms to discuss energy issues, such as the cost of electricity for First Nations on reserve, as well as share information in a timely way. Dialogue is the only way to ensure that support programs, conservation initiatives, procurement processes and electricity infrastructure projects reflect the needs, interests and capacity of Aboriginal communities, and maximize opportunities for participation.

New Post Creek

OPG and its partner, Coral Rapids Power LP, a wholly owned company of Taykwa Tagamou Nation, are moving forward with the 25-MW New Post Creek hydroelectric development. As an equity owner in the project, the Taykwa Tagamou Nation will benefit from long-term revenues over 50 years to support community development. Construction of this clean, renewable hydro power project is expected to begin in 2014. At peak construction, the development is expected to create up to 100 construction jobs.

The project will also provide Taykwa Tagamou Nation members with experience and skills for future opportunities.

Grand Renewable Energy Park

The Six Nations community has negotiated a 10% equity interest in Samsung’s Grand Renewable Energy Park, a 149 MW wind project and a 100 MW solar project partially located on Ministry of Infrastructure controlled lands in the Haldimand Tract area. Details of the agreement between Samsung and Six Nations include a 10% equity interest in the Grand Renewable Energy Park, estimated to represent up to $65 million in net profit for the community; and a Capacity Funding Agreement which includes post-secondary scholarship funding and provisions making construction and maintenance jobs at the Grand Renewable Energy Park available to Six Nations members. These benefits to the community will last the 20-year term of the project. In addition, Ontario has committed to the transfer of funds from the province to Six Nations equivalent to the lease payments made by Samsung to the province for the lease of the Ministry of Infrastructure controlled lands.

Lower Mattagami

Moose Cree First Nation successfully obtained a loan guarantee under the ALGP to support its purchase of up to 25% equity ownership in the $2.6-billion Lower Mattagami hydroelectric project. The community is partnering with OPG to build the project, which will add up to 440 MW of clean, renewable energy to Ontario’s electricity supply mix when it comes online in 2015. The partnership will also help Moose Cree First Nation develop commercial capacity and infrastructure to take advantage of future development opportunities. Construction on the project is currently under way, with about 1,600 workers employed, including more than 250 First Nation and Métis individuals.

In Summary

• The government understands the importance of First Nation and Métis participation in the development of energy and conservation projects. The government will continue to review participation programs to ensure they provide opportunities for First Nation and Métis communities.
• Ontario will launch an Aboriginal Transmission Fund in early 2014 to facilitate First Nation and Métis participation in transmission projects.
• The province expects that companies looking to develop new transmission lines will, in addition to fulfilling consultation obligations, involve potentially affected First Nation and Métis communities, where commercially feasible and where there is an interest.
• The government will continue to encourage Aboriginal participation, including through the FIT program and future large renewable energy procurements, in a way that reflects the unique circumstances of the First Nation and Métis communities.