While copycats are not usually a positive in the competitive business world, in this case, Max Chan and Justin Bourque are welcoming them with open arms.
Following in the footsteps of a historic deal last year is something both men and others involved strongly encourage.
Chan, senior vice-president, corporate development at Enbridge Inc. and Bourque, president of Athabasca Indigenous Investments (Aii) were central players in a transaction that saw 23 First Nation and Métis communities acquire, collectively, an 11.57 per cent non-operating interest in seven Enbridge-operated pipelines in Alberta’s Athabasca region for $1.12 billion.
Aii, a limited partnership of 23 diverse Treaty 6 and Treaty 8 First Nations and Métis communities in northern Alberta, will steward the communities' investment in these pipelines.
“At least every month, if not more frequently, we get inbounds either from other companies in town, groups, or banks … asking: how did you do this?” Chan said, during a panel discussion as part of a Spark the Future series event by the Calgary Chamber of Commerce.
“I think the art of the possible has been demonstrated here. It should be replicated, it can be replicated. I think anything we can collectively do to encourage that, would be the right thing to do.”
Chamber president and chief executive officer Deborah Yedlin, who moderated the discussion, asked Bourque if he’s looking into similar opportunities or if the idea is to let this transaction work first.
“Yes and yes,” replied Bourque, who is also founder and president of Âsokan Generational Developments Ltd.
“I wouldn’t turn down another opportunity to go through another transaction like that.
For Athabasca Indigenous Investments, it’s about: how do we execute the transaction that we spent all that time negotiating — it’s not just a one and done.”
Revenues are starting to flow through these communities, he added.
Chan said he is continuing to look for other transaction opportunities of this kind, adding that a team has been assigned to this task.
“We truly believe Indigenous economic participation is critical to everything we do across all the different business sectors,” he said.
While this incorporated oilsands pipelines, Enbridge is also involved in areas such as gas, renewables, hydrogen, among others.
“I think we missed an opportunity in the recent budget announcement for a national loan guarantee program, similar to that of the AIOC (Alberta Indigenous Opportunities Corporation),” Bourque said. “I know there was a lot of advocation for that from across all sectors.
“I would also say these types of deals don’t just sit in oil,” he continued. “They can be replicated, the model is there, and it can be structured across assets in all sectors.”
Peter Williams, who also participated on the panel, is managing partner and CEO of Annapolis Capital Limited and was the chair of the investment committee and an early board member of the AIOC. The AIOC is a Crown corporation that supported financing for the transaction by providing a $250 million equity loan guarantee.
“The AIOC is there to catalyze these transactions and it’s kind of the gatekeeper,” he said. “I would encourage any company that is looking, or thinking they’d maybe like to do something to sit down with the AIOC, and there are roadmaps that can be shown.
“I know it is a big undertaking, but I think there will be ‘aha’ moments about how much more doable it is than people originally thought. We are getting a lot of inbounds from Ottawa and a little bit more from other provinces, but I think that is only beginning.
“I think we can really get over some misconceptions about how these deals can be brought forward.”
This capacity from AIOC helped get the resources needed to “truly unpack a deal of this nature,” asserted Bourque.
Lessons: More than 100 people involved
One of the takeaways from the experience that Chan relays to those interested in pursuing something similar is the capacity requirement for all involved.
“From the Enbridge side, when we added up the people internally, who had to commit some serious time over the summer, at least, and into the fall, out of their day jobs, it was over 100 people within our company alone,” he said.
“This isn’t something you can do part-time off the side of your desk … it is a real commitment and companies have to be prepared to invest the time and effort into doing it and doing it right.”
Another key, said Chan, is the quality of assets involved.
“In order to enable a transaction like this, you need extraordinarily high-quality assets,” he stated, calling those involved in this deal “crown jewel,” and critical to Canada.
“ … If we are not prepared to offer up some of the best assets, why would you trust us and why would you do the deal?”
Pipelines involved in this deal included the Athabasca, Wood Buffalo/Athabasca Twin and associated tanks; Norlite Diluent; Waupisoo; Wood Buffalo; Woodland; and the Woodland extension.
“Resources have been extracted and developed in our traditional territories for generations, for decades,” Bourque said. “For this transaction to allow us to benefit from that flow of resources now is very important to the community leaders and I think it was a very key aspect in that trust-building piece.”
Building the relationship
Trust was an overarching theme in the discussion.
“There are a number of lessons we took throughout the process,” Bourque said. “What was initially proposed was significantly different than what we finally closed on.
“ … Where we had concerns, Enbridge really listened and really responded in a way that was meaningful. That initial doubt around, is this for real? Is there an ulterior motive behind this? Those feelings kind of went away by the wayside …”
Chan was prepared for what would be involved.
“There was no circumstance where we ever thought we were going to walk in and say … ‘sign here,’” he added. “We knew this was not how this was going to work and we had trust-building to do. Justin is exactly right, we knew there would be some points for negotiation — we needed to hear them out. We needed to hear their concerns, why that made sense, why that was of value and we adjusted accordingly.”
In these conversations, Chan said Enbridge likely spent more time listening than talking.
To that end, Enbridge also did a quality job explaining which areas were non-negotiable and why, shared Bourque.
“… There was at least a good foundational discussion on the reasons why, which led to more of that trust-building,” he added.
