What does your First Nation need to know about participating in hydropower projects?

With new hydropower projects on the horizon, it’s a good time to start thinking about how Indigenous communities and development corporations can get involved. Especially when it comes to equity ownership and long-term participation.

Perhaps your First Nation has been approached by a private company looking for partnership. Or your Nation may have decided to lead a project and now you’re looking to find the right partner. In either case, it’s important to understand what meaningful participation in hydropower projects entails and what safeguards should be in place to make sure the opportunity benefits your Nation and its members for the long haul.

Understand the opportunity

When a First Nation is considering equity ownership, the decisions involved can be complex. Evaluating a project pitch requires clear information on commitments, timelines, risks, and the expected financial outcomes. It also means examining the potential for non-cash benefits like employment and training.

A comprehensive overview of the hydropower project can help support sound decision-making. This likely includes clarity on key decision points, potential costs, and available capacity funding. Depending on the needs of your Nation, this process may also include project management support, assistance with community engagement, and presentations to Council and community members.

Tax and governance implications

Private companies may propose tax structures that are more favourable to them than to your Nation. It’s important to carefully review how the transaction is structured and determine whether that structure optimizes your Nation’s tax opportunities, mitigates risk, and supports strong governance.

Having access to technical expertise and support can help make sure the structure is negotiated in a way that protects your Nation’s interests both now and into the future.

Navigate consultation and regulatory requirements

Participating in a hydropower project means you likely have to navigate the Duty to Consult — a legal obligation that requires the federal and provincial governments to work with Indigenous groups to avoid negatively impacting Aboriginal or treaty rights.

If your Nation is leading the project, you may need to engage with regulators, community members, as well as with other Nations that may be affected by the project development. It’s important to understand what’s legally required and to approach consultation in a way that builds trust while honouring Indigenous rights.