Federal update on the status of implementation of the United Nations Declaration Action Act, 2021 (UNDA)

Natural Resources Canada (NRCAN), Justice Canada (JUS), and Crown-Indigenous Relations (CIR) recently convened a full-day session to update the implementation progress of the United Nations Declaration Action Act, 2021 (UNDA). Canada's Action Plan, launched in June 2023, delineates 181 Action Plan Measures (APMs) aimed at UNDA implementation, stressing a comprehensive governmental approach.

Under the Prime Minister's directive, NRCAN, JUS, and CIR, alongside other federal departments, and Indigenous partners are collaborating to deliver shared cross-cutting priority APMs. These priorities underscore the significance of ensuring Indigenous Peoples' meaningful involvement in government and regulatory decision-making processes affecting their rights, lands, and resources. Below are a few key APMs that are actively being developed in consultation and cooperation with Indigenous Peoples across Canada.

• APM 32: Develop guidance on engaging with Indigenous Peoples on natural resources projects, including in collaboration with provinces, territories, and industry, to align with UNDA article 32(2), which calls for consultation and cooperation in good faith with Indigenous Peoples concerned in order to obtain their free, prior, informed consent (FPIC) prior to the approval of any project affecting their lands or territories.

• APM 33: Develop and implement actions to increase the economic participation of Indigenous Peoples and their communities in natural resources development.

• APM 34: Work to enhance the participation of Indigenous Peoples by developing regulations that will enable Indigenous governing bodies to be authorized to exercise specific powers, duties and functions under the Canadian Energy Regulator Act, and work to amend the Canadian Energy Regulator Onshore Pipeline Regulations and Filing Manuals—to develop mechanisms to enhance Indigenous participation in compliance and oversight over the lifecycle (design, construction, operation, and abandonment) of CER regulated infrastructure.

• APM 66: Develop whole-of-government approaches to the implementation of the Indigenous right to participate in decision-making related to legislative, policy, and program initiatives—which include elements to ensure relevant processes respect and reflect consultation and cooperation with affected Indigenous Peoples to obtain their free prior and informed consent.

• APM 68: Strengthen participation in decision-making by codeveloping consultation arrangements with Indigenous partners that establish agreed upon duty to consult engagement processes aligned with their self-determination objectives and to obtain FPIC. This includes the establishment of a permanent Indigenous advisory committee to guide the federal approach to consultation and to explore considerations for an Indigenous-managed consultation capacity support fund.

Considering the above, NRCAN, JUS, and CIR are working to accomplish the following deliverables.

1. Update Federal Consultation and Engagement Guidelines

NRCAN, along with CIR and JUS will embark on a two-year consultation process (2024-2026) to revise federal guidelines concerning legal consultation obligations and engagement with Indigenous Peoples. This initiative offers a significant opportunity to enhance the interpretation and implementation of free, prior, and informed consent (FPIC). The consultation process will unfold in several stages, beginning with engagement activities in 2023-24, followed by consultation panel discussions in 2024-25, and culminating in the finalization of updated guidelines by 2025-26

2. Develop new regulations concerning Indigenous Regulatory Decision-Making

NRCAN is actively working in collaboration with the Canada Energy Regulator (CER) and the Indigenous Advisory and Monitoring Committee (IAMC) to advance the implementation of APM 34. This initiative entails the development of Indigenous Ministerial Arrangements Regulations (IMARS), which will establish mechanisms for integrating Indigenous participation in regulatory decision-making processes. Currently, NRCAN is engaged in soliciting feedback from Indigenous partners, industry representatives, and other stakeholders to shape the design of IMARS. The aim is to enhance Indigenous involvement in compliance and oversight throughout the lifecycle of infrastructure regulated by the CER.

3. Continue to develop the National Benefits Sharing Framework

NRCAN's focus on advancing the National Benefits Sharing Framework (NBSF) underscores its commitment to enhancing the economic participation of Indigenous peoples in natural resource development (APM #33). Collaborating closely with Indigenous partners, NRCAN aims to finalize the framework by fall, contributing significantly to ongoing economic reconciliation efforts. A key component of NBSF implementation is the Indigenous Loan Guarantee Program (ILGP), designed to facilitate access to affordable capital. ILGP is a crucial aspect of implementing the National Building Strategy Framework (NBSF), aimed at facilitating access to affordable capital.

• Recently unveiled in Federal Budget 2024, the government is set to allocate up to $5 billion in loan guarantees for Indigenous communities. This initiative addresses the collaborative aspirations of Indigenous Nations and industry, supporting communities lacking capital for significant resource project involvement, aligning with their economic goals.
• Moving forward, Natural Resources Canada is tasked with managing intake and capacity building for the next two years, with a budget of up to $17 million. However, the establishment of a new subsidiary of the Canada Development Investment Corporation is anticipated to oversee due diligence and manage the loan guarantee portfolio. Potential delays in fund disbursement could occur due to the subsidiary's creation, a common occurrence in other program rollouts like the Canada Growth Fund or the Canada Innovation Corporation.
• Questions arise regarding the governance and operation of the new subsidiary, including whether it will be Indigenous-led and how the funding will be allocated among rights holders (First Nations, Métis, and Inuit). Clarity is needed for governance and operation to ensure timely reconciliation measures. It may require a thorough examination of existing loan programs to streamline processes while ensuring robust integration of Indigenous decision-making in the program's critical allocation.

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Additionally, NRCAN provided updates on the upcoming availability of two significant programs for application:‍

1. Administered by the Canadian Forest Service (CFS), IFI supports sustainable forest management and collaboration among stakeholders. Introduced in 2023-24, IFI offers $1 million annually in grants. These grants aim to address Indigenous Peoples' needs and priorities, supporting activities like local forest management planning and participation in sector events.
2. Indigenous Natural Resources Partnerships Program (INRP): Allocated $80 million over five years in Budget 2022, INRP enhances Indigenous economic involvement in natural resource projects. Following a temporary halt in application intake in May 2023 due to high demand, applications are set to reopen in 2024. Funding will prioritize projects based on distinction, region, and resource sector. Prospective applicants are urged to align project objectives with program goals by engaging with the INRP team.

These programs represent tangible opportunities for Indigenous communities and organizations to advance economic reconciliation and sustainable resource development. Stay tuned for the application dates.

Why is this important:

‍Understanding the implementation of the UNDA is paramount for industry stakeholders due to its profound impact on project development across various sectors. As the federal government embarks on a comprehensive overhaul of its laws and policies to align with UNDA, continuous feedback from Indigenous Nations, industry and other stakeholders is essential. Industry players, especially those involved in major project development and their trade associations, have a vested interest in how the consultation guidelines evolve and how Free, Prior, and Informed Consent (FPIC) will be specifically formulated and integrated into decision-making processes. The way UNDA is implemented will significantly influence the regulatory environment and procedural requirements for project approvals, potentially affecting timelines, costs, and overall project feasibility.

Moreover, adherence to UNDA not only ensures compliance with international human rights standards but also fosters positive relationships with Indigenous communities and enhances social license to operate. Indigenous Nations and Industry stakeholders must remain engaged in the federal consultation process to contribute insights, address concerns, and promote mutual understanding, ultimately fostering a more inclusive and sustainable approach to resource development.