Recommendations to improve the BC First Nations Clean Energy Business Fund

Ecotrust Canada Submitted a briefing note on July 15, 2020, outlining a number of challenges with the current structure of the BC First Nations Clean Energy Business Fund (FNCEBF). This document is a follow up to that letter and includes additional feedback from the Heiltsuk Nation based on our collective experience working with the Fund.

Fund Background

The BC First Nations Clean Energy Business Fund (FNCEBF) was created by the Clean Energy Act in 2010. Subsequent to an initial investment that year, it has been funded by a portion of specified land tenure revenues and rentals paid in relation to power projects in British Columbia.

The FNCEBF was initially designed to promote increased Indigenous participation in the clean energy sector through two mechanisms:
a) Revenue sharing directly with First Nations impacted by a clean energy project
b) Grants available to British Columbia First Nations to support capacity and equity investment in clean energy projects

Grant Structure

There are three types of projects currently funded through FNCEBF grants, and a separate funding limit for each project type:

Funding History

Publicly available data on the fund’s performance to 2017 shows that the vast majority of funds have been allocated to ‘Capacity’ or ‘Equity’ projects, with just 7% allocated to ‘DSM & Energy Efficiency’ projects. Most funded projects have been either renewable generation feasibility studies, community energy plans, or equity investments in generation facilities.

Following a FOI request to the Province, Ecotrust Canada analyzed the most recent project funding, up to the May 2019 intake, and found that a similar trend has played out in recent years. From 2017-2019, just three energy efficiency projects were funded, making up a total of 8% of allocated funds.

Program Challenges

In our collective experience and partnership advancing clean energy projects, and particularly regarding efforts to reduce emissions and improve housing conditions through home energy retrofits, we note a number of growing challenges with the current structure of the FNCEBF:

1. The fund is increasingly mis-aligned with the government’s energy priorities.
   • The current market and demand outlook for privately-owned generation projects in BC is extremely limited given BC Hydro’s forecasted surplus and focus on Site C. While some Indigenous-led projects may still have the opportunity to be developed in the coming years, there is a much greater opportunity in the current context for DSM and energy efficiency projects.
   • Currently, a lower ceiling on funding for efficiency-based projects limits the ability of Indigenous communities to leverage the Fund for the projects that are most aligned with CleanBC and other relevant directives.
   • The Heiltsuk Nation has been committed to transitioning community homes from diesel furnaces to heat pumps since 2017. In their experience, access to funding is extremely layered and requires extensive administration.  In 2019/2020, a project to install 40 central heating heat pumps required application to no less than six separate funding mechanisms.
2. The fund is colonial in structure.
   • While there may be some Indigenous involvement in an advisory capacity, the provincial government holds decision-making authority on funding criteria and final funding decisions ostensibly for the benefit of First Nations communities.
   • Application documents and resources that are difficult to navigate and intimately embedded in the provincial institution pose barriers to participation.
   • Indigenous-led funding programs, such as the Indigenous Clean Energy Initiative administered by New Relationship Trust, have shown the opportunity and benefit of Indigenous-led program management as an alternative. This is an improvement to past structures, however there is room for increased collaboration and effective mechanisms to support the transition away from colonial systems of administration and governance. (As stipulated by Principle 4 of British Columbia’s Relationship with Indigenous Peoples)
   • The Heiltsuk Nation continues to seek the commitment of the Province to consider, “the overarching aim to ensure that Indigenous peoples are treated with respect and as full partners in Confederation.”  The idea of partnership and recognition as such includes the ability to establish Government-to-Government relationships.  The begins with the “recognition of rights, the space for the operation of Indigenous jurisdictions and laws.”  This should include the collaboration and input on funding that supports self determining priorities of the Nation. (Principle 3 & 4 of British Columbia’s Relationship with Indigenous People)
3. The fund is administratively burdensome.
   • The fund exists in a funding ecosystem alongside similar funds with similar purpose, each of which requires a separate application and approval process. This adds an unnecessary administrative burden both for Indigenous communities that are applying for funds, and for the Province as fund administrator. There could be opportunities to integrate similar funds into one streamlined process to reduce this burden on all parties, or to provide funding to communities more directly.
   • While the lower funding ceiling for efficiency projects may promote phased approaches and distribution of resources, it places substantial and recurring administrative burden and uncertainty for Nations that require multiple rounds of funding to meet their project goals.
   • Based on Principle 5 of the Province of British Columbia’s Relationship with Indigenous Peoples, the Heiltsuk Nation believes there is room for extensive changes that will enable the Province to “recognize and affirm the importance that Indigenous peoples determine and develop their own priories and strategies for organization and advancement”

Recommendations

The FNCEBF was created over ten years ago in the context of a very different BC clean energy sector and set of associated government priorities. Given the current energy policy landscape in BC, it no longer makes sense to prioritize generation projects or to allocate them a higher project funding limit. There is a clear demand from First Nations communities for larger energy efficiency initiatives, including community-scale heat pump retrofits.

Given the importance of Indigenous participation to the success of CleanBC, we recommend that a review of FNCEBF be conducted in early 2021 to ensure alignment with the provincial government’s current priorities regarding clean energy development and reconciliation. We recommend that the review process centre around an opportunity for Indigenous leaders to share their experience with the fund to date and provide their suggestions for improvement.

From the experience and perspective of the Heiltsuk Nation, the advancement of community driven and Nation-based priorities requires funding mechanisms that are not overly administratively burdensome, and that have a clearer focus on aligning with the Nations’ strategic planning and vision. Timing is of the essence when it comes to supporting the Nation’s short-, medium- and long-term vision.  Multiple, separated funding mechanisms with a phased approach can make it challenging for a Nation to achieve the needed project stages on the ground that would materially impact their daily reality.

Based on the directives of the Province’s 10 draft Principles and the desire to renew its relationship with Indigenous Peoples in BC, and in order to affirm this desire, the necessity of Government-to-Government relationships require respect, recognition, and collaboration.  Working with Indigenous Peoples — and Nation-to-Nation — the design, construction, and implementation of funding should be addressed jointly. Moving away from the status quo and supporting Nations that adopt their own self-determining, self-governing, and self-sufficient efforts is important in meeting the commitment to the 10 Principles.

Contact

Leona Humchitt – Councillor, Heiltsuk Tribal Council | leona.humchitt@heiltsuk.ca

Dylan Heerema – Senior Analyst, Community Energy, Ecotrust Canada | c: 236-838-5607 | dylan@ecotrust.ca