Proceedings of the Standing Senate Committee on
Aboriginal Peoples

Issue 23 - Evidence, March 16, 1999

OTTAWA, Tuesday, March 16, 1999

The Standing Senate Committee on Aboriginal Peoples met this day at 10:05 a.m. to examine and report upon aboriginal self-government.

Senator Charlie Watt (Chairman) in the Chair.


The Chairman: Before us this morning are witnesses from Syncrude Canada Limited.

Welcome. Please proceed.

Mr. Robert Loader, Manager, Aboriginal Affairs, Syncrude Canada Ltd.: Good morning. With me this morning is Beverley Davies, the coordinator of the aboriginal development program at Syncrude.

Thank you for inviting us to speak here today.

We have been asked to talk about aboriginal community development and opportunity in Canada. We extrapolate in the relatively narrow text of the Wood Buffalo region of northeastern Alberta. Aboriginal issues extend far beyond the context of this limited geographic region. We could speak of aboriginal development from any number of equally legitimate viewpoints, but the fact is I would be speaking outside my field of expertise and experience if I were to extend the discussion beyond Wood Buffalo. That is probably so if I even went beyond Syncrude to any large degree, but it is clear that many of our successes can be easily extrapolated to other regions and industries. It is important that I speak today to that which I know best.

On the industrial side of the equation, I am here today because the company I work for, Syncrude Canada Limited, is at the leading edge of a new era of economic growth. How else could you describe $6 billion worth of new investment under way or on the books? That is the amount we plan to spend for a massive expansion that will create significant wealth and employment opportunity. It is opportunity, plain and simple, and a lot of it for a long time to come.

It is the kind of opportunity that also happens to translate into human development potential: potential for people to earn a livelihood, whether directly with Syncrude or through our contractor or service company workforce. There are benefits for the wider base of people who use the products we produce, who know that we have a secure energy supply right here in Canada and who, in one way or another, share in the prosperity that comes from all that.

That is one reason I am here. I know about the mining and oil industry and the opportunities it can create. There is another reason, which is just as valid. In tapping into human potential, Syncrude has recognized Canada's aboriginal peoples as an important part of that overall universe.

In fact, over the last 20 years we have worked incredibly hard, and with reasonable success, to build relationships of mutual value and benefit with the aboriginal communities in our region. My purpose here today is to share some insights, based on my expertise and experience, on how that has come about and on how we maintain the relationship and share in the opportunity.

Let me start with a few words about Syncrude itself. The Canadian oil sands cover an area of 77,000 square kilometres in northeastern and north-central Alberta and are located in four major deposits: Wabasca, Cold Lake, Peace River, and Athabasca. Athabasca, the largest of the four, encompasses the city of Fort McMurray, which is Syncrude's home base. It has been estimated that the bitumen resource in place amounts to 1.7 trillion barrels, greater than the reserves of the entire Middle East. The recoverable reserves of about 300 billion barrels, more than in all of Saudi Arabia, are sufficient to supply Canada's oil needs for the next 200 years.

Over the last 20 years, the oil sands industry has quietly grown approximately seven-fold, reaching a level of production sufficient to supply approximately 25 per cent of Canada's petroleum requirements. Yet, after all of this, oil sand development has just begun. In fact, less than 1 per cent of the discovered recoverable oil sands resource has been produced, and it is estimated that current production plants will access just 2 per cent of the recoverable reserve throughout their working lives.

Syncrude shipped its first barrel of oil in 1978, and on April 16 of last year, it shipped its 1 billionth. That is a remarkable achievement. With the $6 billion of new investment that I have already mentioned, there is every reason to expect a continuing "good news" story in the decade ahead.

When I say that Syncrude is a leader in oil sands development, the proof lies in our record of strong and innovative business performance. We are also a leader in the quality of working life and the employment of aboriginal people. I would like to devote the remainder of my presentation to a discussion of that particular achievement.

Building productive relationships is not something you do overnight. You build them up over time. You get to understand one another and work together as partners. You do not go out with a contract or a job offer in hand and give it to someone simply because they belong to one group or another. You ensure that they can do the job you need done, because if they cannot and you give it to them anyway, then you have set them up to fail. You have accomplished nothing but some short-term good public relations, and that will not last. You must go deeper. The partnerships you build must be based on mutual respect, a sustainable capability, professionalism, a supportive community, and, perhaps above all, self-reliance. Put another way, you do not compromise your standards. Instead, you work with people to help them understand and meet those standards.

It is my belief that at Syncrude we have accomplished those objectives. I do not say that as some kind of caregiver who has helped the less fortunate; I say that as the representative of a world-class corporation that has benefited from its relationship with native peoples. We did not set out to achieve this record, but the fact is that Syncrude is currently the largest industrial employer of aboriginal people in Canada. That did not happen overnight. Our aboriginal development program dates back to 1974, years before we even started production. That is proof, I say, that at Syncrude we have always been forward-looking. We know there is oil in the ground, but before we lift a shovel, we look around and make note of where we are, where we want to be, and the best way to get there.

We brought opportunity to the people of the area when we arrived, but we also had a major impact on the native communities surrounding the plant, people who had led a traditional way of life. The culture shock was tremendous. Native people were, incredibly, entering foreign territory right in their own backyards. We recognized from the beginning that our operations would have an impact on the local and regional economic communities, and on traditional ways of life, from Fort Chipewyan to Edmonton, from big cities to hamlets, and we planned for that. We planned for it so that we could deal with issues before they became problems, and because we knew that we would be there a long time, and sooner or later, would come to rely on those same communities. If we did it right, we could share the wealth and create widespread opportunity along the way.

Everyone has something to learn, and we worked closely with aboriginal communities from the outset. We recognized very early that aboriginal people would have a major interest in our company's future, and sought to integrate the program into our operations as a normal way of doing business.

We were, and remain, committed to employment equity. However, as I said, we did not fill quotas just for the sake of meeting that commitment. For example, we helped to establish an industrial workers' course at Keyano College and hired qualified aboriginal graduates of the course directly under the Syncrude project. That program won an award, and has served as the basis for the Syncrude Indian Opportunities Agreement, signed in 1976 by Syncrude, the Indian Association of Alberta, and the federal government.

Frankly, it was not easy for anyone. Different lifestyles, expectations, traditions and cultures made it difficult at times -- difficult for Syncrude to bend the rules and for the aboriginal communities to cope with the rigours of an industrial environment. The breakthrough came when we hired a native affairs adviser to work with people in local communities. We asked community members to screen job candidates for us, which they did, and they selected those whom they believed were the most likely to succeed. Through an effort born of need, and a true desire to understand, we built trust and respect, helped with coping strategies, and we learned.

The fundamental objective was to help aboriginal people help themselves. We worked with aboriginal employees and contractors on meaningful opportunities and helped them to develop the appropriate tools to achieve their goals. One sign that it worked is the fact that we no longer have, or need, a formal native affairs department. We still provide some key services to ensure our commitments are met, but aboriginal development has become part of a normal and sensible way for us to do business.

Today, aboriginal people play a vital role in the oil sands industry, working as heavy-duty mechanics, heavy equipment operators, millwrights, welders, journeymen, administrators, lab technicians, engineers, accountants, and so on. We make every effort to maintain or increase the overall proportion of aboriginals directly employed by the company and continue to encourage our contractors to do the same.

Today, aboriginal people represent approximately 13 per cent of our workforce. The average salary for an aboriginal employee is $58,000 a year, and average length of service is 8.4 years. This compares very favourably with the workforce as a whole, as do the statistics on aboriginal productivity, safety, and attendance records. The turnover rate for aboriginal employees is exactly the same as that for employees as a whole.

It is also worth noting that we have the same standards of recruitment and performance for aboriginal employees as for everyone else. All candidates must have Grade 12, and we do not lower our requirements for aboriginal employees. Our experience shows that we do not need to.

In effect, aboriginal communities have grown along with the oil sands. To me, that means that aboriginal people are now well positioned to tap into the opportunities of the huge new area of expansion that I mentioned earlier.

True partnerships go beyond just handing out jobs. The educational component of Syncrude's program is designed to equip aboriginal people with the training they need. We believe in a sound education for all of our employees, and we promote and foster a culture of lifelong learning.

As a high-tech operation, our employees are our greatest assets, and we rely on their skills and abilities in order to operate efficiently. Our future depends on the development of a pool of skilled, well-educated employees, primarily in our region of operations, and so we train and educate. We offer education awards of $2,000 each to aboriginal persons wanting to further their education in fields relating to oil sands. Last year, we began a five-year program of financial support, $500,000 in total, for the native careers program at the University of Alberta.

We are also big supporters of the learning-to-earning programs, such as co-op apprenticeships, career prep programs, and registered apprenticeship programs for high school students. We are involved with the schools in our communities, encouraging adults to go back to school and kids to stay there. We go out and provide information on the company, our requirements and expectations, and the opportunities that will become available.

Beyond the specific requirements of the workplace and the overall expectations we have of our employees, we strive to build an increased understanding of aboriginal culture and traditional values. We recognize that negative stereotypes will occasionally arise. However, the most effective way to combat those is to continually provide information within the company that refutes them. We provide training on aboriginal issues to non-aboriginal managers, supervisors, and team leaders across the company.

Of course, not everyone can work directly for Syncrude. You cannot and should not create positions for which there is no need. You do what you can, but there is not an endless pool of jobs. When you are a major employer in your community, as we are, you have an added responsibility. You must look outside the factory walls, back to the community that existed when you arrived. For one thing, you rely on that community for goods and services you cannot supply yourself. Contractors servicing Syncrude are approximately one-fifth aboriginal-owned and run operations, and they, in turn, are encouraged to hire aboriginal employees.

We needed a network of trusted suppliers, and so we made a limited number of sole source awards and sometimes restricted bids to aboriginal suppliers and contractors. Although we do not finance businesses, we have been known to come up with some creative arrangements to help jump-start ventures until they are running and profitable. However, these are short-term measures.

We do not look at it so much as a helping hand as an investment in our future, and, as a fringe benefit, the future of the aboriginal community. Last year we spent approximately $54 million with aboriginal-owned and operated businesses, and in all, we have purchased over $350 million worth of goods and services from aboriginal-run businesses since 1984.

These three, directly related elements of the program, that is, employment, education, and business development exist. However, partnerships go beyond that. They extend to the whole community, and we are committed to working with local people, when requested, to help them define and meet their needs and achieve self-reliance. In order to do that, we have built and maintained good relationships with formal and informal leaders. We help wherever we can, whenever we are asked, with physical, technical, and financial support to the communities of the region, in everything from health to sporting events. The overall goal is to improve the quality of life or provide benefits to the community.

In my experience, it is a high compliment to be called from time to time and asked for advice. When we are asked, we give it freely, along with other resources. We try to foster an appreciation of aboriginal culture amongst all Canadians. One example is that we were a major sponsor of the interpretive gallery at the provincial museum in Edmonton, which houses one of the finest collections of aboriginal artifacts in the country.

Good corporate citizenship has become something of a buzzword. Some companies engage in it for fear of the consequences of a backlash if something goes wrong, and they hedge their bets against losing goodwill in that event. However, that is doing it backwards. We are there at the pleasure of the community, and the fact is that healthy communities make for a healthy businesses environment, in that order.

It is the same with the environment. You do everything you can to protect and preserve it, not because you fear getting caught if you break the rules, but because you depend upon it as much as anyone else. We have a responsibility to make our marks on the world in an environmentally benign way.

Syncrude recognizes the need to balance its commitment to secure Canada's energy future, and we are on the right path to doing that, with a strong commitment to leadership and sustainable development. We have a strong record of doing that.

As long-time residents of the region where Syncrude operates, aboriginal stakeholders share our belief in a need to balance environmental and economic considerations. The environment is the fifth and final element of our aboriginal development program.

We consult and work extensively with local communities on environmental matters. Last year we spent $6 million reclaiming land. One of the results was the Wood Bison Trail, which started in 1993 as a joint effort by our company and the Fort McKay First Nation, not just to restore the land, but also to bring back one of the original inhabitants of the area, the wood bison. A herd of more than 200 animals now roams on reclaimed land, managed by the Fort McKay Band, and enjoyed by people from inside and outside the region.

We understand the role our aboriginal neighbours play as stewards of the land and we know and respect the fact that many of them depend upon it for survival and sustenance. We also believe that the land must remain safe, healthy, and enjoyable for future generations. It is a belief inspired by uniting the viewpoints of industry with those of aboriginal society, and it is a belief in a common direction that benefits everyone.

As I said at the outset, the good partnerships are about understanding and mutual respect, and in order to work, they take time to build up. There are, no doubt, some companies that have not yet measured up to that test. It will take some time for them to do so because there are no quick-fix solutions.

In my view, Fort McMurray is not the only haven of native business opportunity in Canada, or Alberta. The opportunity lies virtually everywhere. Perhaps, just as Syncrude has learned by doing, others can learn from us, gain an edge, avoid some of the pitfalls we encountered, and share in our successes, because we know it can be done. Partnerships of mutual benefit can be established and we can move forward and prosper together.

I personally look forward to a time when there will no longer be a need for an aboriginal development program, and when all people will have an opportunity to be successful, at Syncrude or anywhere else.

Senator St. Germain: How many aboriginals are affected by this? Do you have an actual count of the aboriginal people in that area that were affected or impacted by, or benefited from, Syncrude?

Ms Beverley Davies, Co-ordinator, Aboriginal Development Program, Syncrude Canada Ltd.: When you say "impacted," do you mean people employed, either directly or indirectly, by Syncrude?

Senator St. Germain: No, I am talking more about the whole community that existed there when it was decided to develop the tar sands.

Ms Davies: From our research, we estimated approximately 800 to 1,000 aboriginal people in that region at the time. The region is very large. It encompasses probably 700 kilometres from north to south. There were approximately 800 people in this area at the time. Currently, there are close to 4,000 aboriginal people in the region.

Senator St. Germain: Are the additional aboriginals people who traditionally lived there and left and came back, or are they from other regions? Do you know?

Ms Davies: We have a fairly good idea. Approximately 25 per cent of them have moved into the region and the rest are the local inhabitants.

Senator St. Germain: Towards the end of your presentation, you talked about them still being able to live off the land. Is that a practical assumption?

Ms Davies: I do not think it is a practical assumption that 4,000 aboriginal people can live off the land there, no.

Senator St. Germain: This area was extensively covered by treaties, was it not?

Ms Davies: Yes. It is covered by Treaty 8.

Senator St. Germain: Have they been treated equitably as far as the wealth that was there and will it be shared equitably with them?

It is fine to say that they are being given opportunities to work in the system. That is honourable and I compliment you on that. Perhaps the good government in Alberta drove you in that direction, but you need not comment on that.

There were reserves there. Have all land claims been settled with the natives in that area? Are they really sharing in the development in a manner that reflects the value of the resource that was part of their lands?

Ms Davies: In my opinion, probably not. The First Nations people in that region want some kind of royalty revenue or other kind of revenue from the oil sands. The land claims that are outstanding are called "specific claims," where a proper count was not done. They are not land claims of a general kind. One Métis organization has launched a fairly extensive lawsuit against the federal, provincial, and municipal governments on the issues of compensation and failure to consult.

Currently, Syncrude is part of a group called the Athabasca Tribal Council Industry Working Group, which encompasses the five First Nations. Part of the initiative of that working group is to examine creative ways of sharing the benefits of this development through agreements other than royalties. The Government of Alberta has made it fairly clear that it does not want to include royalties as part of the conversation. We are looking at other opportunities to develop a creative way to better share the revenue.

Senator St. Germain: Would you say that the Province of Alberta is providing quality education, health care, and so on, for the people in that region?

Ms Davies: I am not sure that I am in a position to speak to that.

Senator St. Germain: From an educational point of view, is the system producing people that you can hire? I realize that you do not want to get into a political discussion and I am not trying to do that. It is fine that the natives want royalties, but are the royalties that the province is receiving being used to benefit them?

Ms Davies: Education is one of the fundamental issues in that region. The current drop-out rate for aboriginal students between grade 9 and grade 12 is 8 out of 10. Clearly, this is a big concern for our industry because that is our potential workforce. This is not purely altruistic, since we clearly need that workforce, but we are very much motivated to implement educational programs, to work with the communities in encouraging kids to stay in school.

It is a big, primarily cultural problem, and an issue of transition from the outlying communities into the city high schools. Fort McMurray is a city of 40,000 people. Most of the aboriginal kids who go into high school there come from communities of less than 400. The kids have problems with the transition and we lose a lot of very bright students who do well up to that point, and then subsequently fail.

Senator St. Germain: Are you mining any actual reserve land?

Ms Davies: No.

Senator St. Germain: Everything you are doing is off reserve?

Ms Davies: Yes.

Senator Chalifoux: Welcome to Ottawa and to the committee. It is not that long since I was speaking to you both in Fort McMurray.

I have been involved in the tar sands development since its beginning in the early 1970s. I do not know whether you can answer this question. At that time, there were more than 1,000 people of aboriginal ancestry in that area. You are only talking about treaty Indians and not Metis. I am talking about all aboriginal people in the Fort McMurray area at that time. They were living a traditional lifestyle, hunting, trapping, fishing, and working on the river. Suddenly, Syncrude arrived and their whole lifestyle changed. How have you seen the people and their lifestyle affected since those days?

Second, everyone knows that Fort McMurray is now the second largest Newfoundland city in the country. People were brought in by your company. What effect has that had on the aboriginal communities? That is another culture that was introduced almost overnight.

I must compliment you. Last Friday, David Tuccaro received a National Aboriginal Achievement Award for business and commerce. He owns nine companies now, thanks to the oil sands industry. That is one benefit, but many detrimental things have happened to the aboriginal community. What effects do you see in your capacity as an aboriginal liaison?

Ms Davies: The aboriginal people in that region, when the oil sands development began, had a very adequate set of skills for living off the land and following their traditional lifestyle. They had the education, skills, and experience they needed. Within a very short period of time, those skills and experiences became inadequate for dealing with the situation.

Many of them, particularly those who are now aged 40 to 60, will never recover from that. I think that is sad. We do have programs in the region to help those people attain a basic level of literacy so that they can work on contracting projects. If they are interested in going back to school, they can. Many of them are not interested. They have had poor experiences with the school system in the missions and so do not want anything to do with it. For that particular age group, we mostly focus on trying to provide contract opportunities within our company and in other companies.

The rest of the focus is on equipping those aboriginal people who no longer have the proper set of skills and experience to be able to take advantage of the oil sands industry and the spin-off industries in that region.

Senator Chalifoux: There is a land claim outstanding right now in the Anzac area. That has been put forward already. That might help Senator St. Germain with his question.

Ms Davies: That was the one I referred to previously as a lawsuit. Prior to that suit, a land claim was submitted.

Senator Chalifoux: It is a land claim also on that area.

Ms Davies: I wanted to answer your second question as well.

When we examined our aboriginal development program around 1992, we realized that we had been working hard towards achieving a fair representation of aboriginal people in the region and had not been successful. We got up to 6 per cent, but we stayed for about five years at about 6.1. Much of it had to do with the issues that you mentioned, namely, bringing in so many people from the outside, regardless of where they came from.

Syncrude introduced what in employment equity would be called a compensatory justice program. We said that even though our company was downsizing, we would increase the number of aboriginal employees until we reached 10 per cent. That was a five-year program. In that, we tried to address those issues by focusing on local indigenous applicants, and for all other intents and purposes we had a hiring freeze. We were able to address that, but we certainly recognized what we had done in those days.

Senator Chalifoux: We are studying self-government here. What effect do you think that industry has on aboriginal self-government, not only in your area, but all areas? You must have some idea of your effect on self-government.

Ms Davies: We primarily provide governments or First Nations with revenue and, because of that, self-respect. That has many spin-off benefits as far as building the confidence that they need to manage other affairs.

Senator Chalifoux: I always say, "It took the English 300 to 500 years to go through the Industrial Revolution. We expected the aboriginal people to go through it in 30 years or less and survive."

Senator Adams: I have visited your company with other committees. Our energy committee visited your company three or four years ago. At that time, I was not let into the area with computers because I had a beard.

Mr. Loader: They would not let you into the refinery?

Senator Adams: That is right.

In 1976, your company had an agreement called the Indian Operation Agreement. Is that between the company and the Department of Indian Affairs regarding the employment of natives? How did that begin? Your brief states that in 1976 Syncrude had an agreement with the Indians. What does that mean? Was it with regard to employment or a joint venture with the company?

Ms Davies: When we were applying for our licensing project, we established an agreement with the Government of Canada, the Government of Alberta, and the Indian Association of Alberta, which was formed primarily of treaty Indians. That agreement covered business development and employment. It was actually our first formal agreement. It did not have any actual targets in it. It was aimed at increasing the number of people that Syncrude hired and increasing the amount of Syncrude's business with aboriginal companies.

That agreement focused primarily on status Indians. Even though at the time Syncrude's initiative included Metis as well, that particular agreement measured our success with status Indians as opposed to the entire aboriginal community.

When it expired, we formed another agreement with the local aboriginal community and the Government of Alberta and, again, the Government of Canada. That agreement included all aboriginal people, and in that one the aboriginal community insisted on having targets, specific numbers that we could work towards. We found that much more successful.

Senator Adams: That has expired now. How many years was it in operation?

Ms Davies: The Indian Opportunities Agreement expired in 1985 or 1986. The next agreement with the Athabasca Native Development Council expired in 1993.

Senator Adams: Nothing exists now, just the company's initiatives.

Ms Davies: No. It has been our company's policy recently not to enter into formal agreements. We may still need to do that, but we primarily made our commitment in the public forum. We publish an annual review that outlines Syncrude's commitment, and we make formal commitments through the energy and utilities board. We act as a public steward and feel that that has been more successful than some of the other agreements.

Senator Adams: Was that agreement successful? Since it expired, has there been a decrease in the number of people who work for Syncrude? Did that system work before, or why did it expire?

Ms Davies: Statistically, we have had better success without the agreement. The Athabasca Native Development Corporation Agreement expired in 1993, and we put together the program for reaching 10 per cent in 1992. Over that five-year period, we went from 6.2 per cent of our workforce to over 10 per cent, whereas in the time of the agreement we stayed at around 6 per cent. I do not know if there is a correlation, but statistically we have had better luck with no agreement.

Senator Adams: When we were there, we saw many natives contracting for the company as mechanics and heavy equipment operators. How does that system work? Do you need 10 years with the company? The natives were happy with the contract with the company, but can you have a contract for so many years and be successful in keeping it? How does that work with the native people and the shops, maintenance, trucking, and so on?

Mr. Loader: Are you talking about native organizations contracting with Syncrude?

Senator Adams: Yes.

Mr. Loader: In my opening statement, I said that in some cases we gave people a hand to get started, but in every case we expected aboriginal contractors to work effectively and efficiently and in a manner that makes them competitive to any other company. Our experience has been that all have done so. Normally, after the first contract expires and the work goes out for bids, the native contractors will bid again, and in many cases they have been successful in recapturing the contract. It always helps, of course, to get a contract back when you have already been doing it because you probably know more about it than someone else who is trying to get in on the action.

Senator Adams: Do those people not feel that because they are native that they should be given priority? How does that work?

Mr. Loader: The only goal we set for ourselves with aboriginal businesses was to try to achieve the same percentage as the demographics. We do about $300 million worth of business of supply and services a year, and our goal is to have 10 per cent of that with aboriginal businesses, which would be about $30 million. In fact, it was $54 million last year and $56 million the year before. We exceeded the goal by almost double because of the quality of service that exists.

Senator Adams: New technology is coming out now. There are conveyor belts and so on, and you are turning to the pipeline system now. How is that affecting employment?

Mr. Loader: On an overall basis, there will be fewer people working to make a barrel of oil than there used to be. However, with the expansion, Syncrude will have more employees than it currently has. With better technology, we will not have as many as we would have if we had stayed with the original technology.

I believe that many opportunities are coming and that many now exist for aboriginal companies. We are just opening a new mine called Aurora, which has some additional opportunities.

Ms Davies: We also have a broad range of contractors. Talking about technology, we have aboriginal companies that own and operate computer-assisted drafting, electronics and power line companies. There is a broad cross-section of the kinds of companies that we have. It is my observation that they are very adaptive and will be able to respond to changes in technology.

There is a shortage right across Canada of aboriginal people going into engineering and technology, and it is a problem. We need to address that as well because there will be a large need for that.

Senator Adams: If those companies have nothing to do with the bands, just the ordinary companies in the reserve area, how does that work?

Ms Davies: We have a mix. We have some owned by First Nations, some owned by individuals within First Nations, some owned by individuals within Metis nations, and at least one or two owned by Metis nations themselves. We have quite a broad range.

The Chairman: I have a question regarding the agreement that has been signed between your company and the First Nation.

Is it a given when there is an agreement to be signed, whatever that agreement might be, that the federal and provincial governments must be involved?

Ms Davies: No. I do not believe it is a given. The federal and provincial governments are involved largely because they find that many programs are spin-offs or requirements of that, particularly around education and employment. They are always very welcome at the table.

We invited the federal government, the Department of Indian Affairs and the provincial government to become involved in the current agreement that we have now, which we have signed. That is not a specific Syncrude agreement, that is an oil sands industry agreement with the Athabasca Tribal Council.

The Chairman: How much do you receive annually from the federal government to honour those agreements that have been signed in terms of training programs at Syncrude?

Ms Davies: Syncrude does not receive anything.

The Chairman: It receives nothing from the federal or the provincial governments?

Mr. Loader: Syncrude is not involved in any training programs that are funded provincially or federally.

The Chairman: Are the training programs entirely funded by the oil company?

Mr. Loader: Yes.

The Chairman: Do the shareholders have any difficulties with that?

Mr. Loader: Our shareholders are mostly oil companies. There are two oil sands trusts, which account for 10 per cent.

The Chairman: How do you account for the money that is spent on the training sector when you evaluate your training at the end of the year?

Mr. Loader: We train all of our new employees. They come into entry-level positions, then they go through an apprenticeship program whether or not they are aboriginal.

The Chairman: In other words, there is no special program for the aboriginals; it is applied across the board?

Mr. Loader: That is right. Our aboriginal program does not really exist because we treat everyone as equally as we possibly can. There are no special programs or priorities.

The Chairman: This is one of the reasons why, as you mentioned earlier, your standard is the Grade 12 level and you do not compromise on that point?

Mr. Loader: No.


Senator Gill: I congratulate you on the work you are doing for aboriginal peoples. Perhaps my colleagues here would disagree with me, but I find that companies are in some respects doing the work of others.

My impression is that the work Syncrude is doing is rather similar to the efforts of other large corporations in Canada. Take Hydro-Québec, for instance. Although much criticism is directed at the corporation, it does many things that would normally be the government's responsibility.

This kind of commitment seems entirely appropriate. I encourage companies to keep up the good work. However, I have to wonder if a company like Syncrude might not be better off putting some pressure on governments. I would imagine that you are pressing them to assume their responsibilities toward aboriginal peoples. For example, with respect to training, community social development and so forth, corporations like yours seem to be shouldering a burden that normally one might expect the provincial and federal governments to be shouldering.

Moreover, non-aboriginals may resent the fact that you give some of the region's aboriginal peoples preferential treatment. I would image that you are criticized by aboriginals and non-aboriginals alike.

You must often tell yourself that you are doing someone else's work and acting for someone who is not doing their job. Would a company such as yours not benefit from meetings with other large Canadian corporations which could eventually lead to some pressure being brought to bear on the federal and provincial governments? Aboriginals are scattered around the country. While their circumstances may not always be identical, they are often similar. This situation is not overly political. It is merely a fact. I would be interested in your views on the subject.


Mr. Loader: We must tread carefully in this area. Traditionally, Canadian corporations have not told governments how to run their business. A number of initiatives are under way, both in the Conference Board of Canada and through Human Resources Development Canada, to try to get governments, aboriginal communities and corporations to enter into different types of partnerships and programs. They are trying to improve the economic position of all parts of Canada and increase the success of all businesses, to perhaps get them closer to the level of where Syncrude and the Fort McMurray region are now.

Apart from trying to specifically put pressure on governments and tell them whether they have been working to a standard that is appropriate, we have not done that and we are not in a position to do that. However, I hear you, and what you said would certainly add strength to the whole program. There are many aboriginal communities saying the same thing. I know that Senator Chalifoux has supported this.


Senator Gill: I stress this point because this gives us a false impression of what relations should normally be like between your company, or companies similar to your, and aboriginal peoples. The relationship is one of employer to employee, that is one between individuals who want to increase their skills to qualify for the best paying jobs, instead of associating all of this with land claims. When one particular stakeholder -- in this case the government -- fails to assume its responsibilities, the corporation has no choice but to deal with such issues as claims, employment and the economy. To some extent, you are taking the government's place. The oil sands of Western Canada represent tremendous potential for the next two hundred or three hundred years. We are not talking about a one-day commitment. It may be necessary to do some long-term planning and to forge partnerships with other major companies in Canada's natural resources sector. The latter need to have a clear understanding of their responsibilities versus those of the government.


Mr. Loader: I agree. It would be very advantageous.

Senator Gill: What do you do about that?

Mr. Loader: I do not know. There is a lot of confusion. I can only say that we have dealt directly with the aboriginal community to try to improve the lot of all the citizens of the Wood Buffalo area, aboriginal or otherwise, so that everyone gets an equitable share of the created wealth.

There is much to be done across the country. You mentioned Hydro-Québec. I know people from that company who are in the same business as I am and they do similar types of things.

Ms Davis spoke about the initiatives involving all the different companies that are involved in the tar sands -- I believe there are eight -- working with the Athabasca Tribal Council. They have approached the federal department DIAND and the Alberta government department dealing with intergovernmental and aboriginal affairs. They have put forth proposals for involvement by those governments. They are waiting to hear back now from them. I do not know how else to answer your question.

Senator Gill: Since it is difficult to act on behalf of the government in certain fields, would it be possible for you to consider some kind of partnership with the First Nations in terms of sharing the revenue? Really, this is our objective. We want to share the revenue coming from the resources where the people are living. They should get some money back. Are you just waiting for the people to put pressure on you?

Mr. Loader: I do not know what we can say or do to help in that respect. The federal government and the Alberta government, through royalty payments and corporate income taxes, relieve us of a great deal of the money we make already. The piece left after you pay everything off is not that enormous.

I suppose that that type of benefit sharing would have to be done through one level of government or the other or both. I know aboriginal people have lobbied for that kind of benefit sharing. I know, for instance, that the FSIN in Saskatchewan is working at the moment with the federal and Saskatchewan governments to figure out some kind of formula that provides for benefit sharing from natural resources. It is not an area in which Syncrude has ever publicly taken a stand, nor do I think we wish to do so today.

Senator Gill: Do you support the third order of government for the aboriginal people?

Senator Andreychuk: Do not answer that. It is a political question.

Mr. Loader: I cannot answer on behalf of Syncrude. I am not sure that I know enough about it on a national basis to even answer it on a personal level.

Senator Pearson: In your responses to Senator Chalifoux about education, you put your finger on an extremely sore point, which is that crucial period in adolescence when many aboriginal children are getting lost. This is not your fault; I am not saying that. You clearly understand that, increasingly, added knowledge drives economic opportunities. Your workforce must be better educated and you are assuming a portion of the cost of their education as part of your social or human capital costs.

I am concerned about your observations. One can see what is happening. Children are coming in from small communities, going into a large town and suddenly feeling lost in a big high school. It is bad enough in ordinary cities.

You are doing several things in education. You are interested in partnership. You have offered some partnerships in co-op situations, I guess. Are you allied specifically to the high schools? There must be more than one high school.

Ms Davies: There are three high schools.

Senator Pearson: In New York, there is a program that awards black students scholarships for remaining in school, full time. It is one of the more imaginative ideas. One man founded the program and is giving out a certain amount of money to any graduate. It is a real carrot.

I am throwing that out as an idea. Do you have more specific ideas? Do you have in place a structure to look at ideas?

Ms Davies: We have been involved in three programs directly with the high schools. One is mentioned in Mr. Loader's presentation, namely the Registered Apprenticeship Program, or RAP. It has been one of the most successful ones. We instituted it as a pilot project for the community of Fort MacKay, which is our closest neighbour. In that particular community, the drop-out rate was 90 per cent.

RAP is a work-to-school transition program for students beginning at Grade 10. They work for six months for our company and they get paid. Then they go to school for six months. They also get school credit for that six months. For Grades 11 and 12, they are working and going to school. When they finish, they graduate with Grade 12 as well as their first year of a registered apprenticeship, so they are indentured. There is a natural transition into the next level, which is the co-op program.

RAP has already had a tremendous impact on student attendance. Some students' attendance rates rose from 35 to 50 per cent to 75 to 90 per cent. Their marks, just by the fact that they are attending school, have correspondingly gone up considerably.

The program has its hiccups; it is not perfect. We work on it on almost a monthly basis to try to iron out the problems, but it has been very successful.

We also work with the schools and the scholarship program, as well. We give each student that graduates a gift. We support them when they go to university with both a scholarship of $2,000 per year and a guaranteed summer job. We try to provide support for any high-school graduate from the outlying communities who wishes to go to university. We have been able to support essentially every one of them in that endeavour.

Senator Pearson: How long have those two programs been in place?

Ms Davies: The RAP program has been in place for two years and the scholarship program for probably five. It has produced one aboriginal engineer graduate, who is now working for us.

Senator Pearson: That is good to hear. It takes time for that to build up. The fact that they are quite recent looks like you are moving toward a solution.

Ms Davies: Yes. On a formal level, the agreement that I mentioned with the industry that represents 11 companies -- some of them are the larger oil companies like Petro Canada and Esso -- has a component directly concentrating on employment and education. We are looking at a program called Career Path Mentoring, which we believe represents a positive solution to some of the issues. It takes aboriginal students at about Grade 9 and talks about a path. It says, "Where would you like to be in the future? Where are you right now?" It outlines a step-by-step path. The student makes a commitment to go a step, and we make a commitment to go a step. We give them a mentor who is an aboriginal person working in our company and work them through the steps. Again, it has been very positive.

The Chairman: At present, I do not believe that you have an aboriginal person at the top management level, at the same capacity as you; is that correct?

Mr. Loader: That is true. We have some aboriginal people in fairly high levels, but I do not believe there are any at my level. Ms Davies is an aboriginal person who is at a fairly high level within our company.

Ms Davies: However, I am not at his level, yet.

The Chairman: I believe there eight Alberta Metis blocks in northern Alberta living under the provincial legislation that was passed in 1991. Would that have any impact on the geographical area where your company is located?

Ms Davies: The Metis settlements in Alberta are south of what we consider to be our region. They are actually in the same zone as our Metis nation is located, but we include the geographical area of Conklin to Fort Chipewyan, which is north of the Metis settlements. We have quite a few employees who were recruited about 15 years ago from the Metis settlements in that region.

The Chairman: Is the Metis settlement council involved in your activities, directly or indirectly?

Ms Davies: Indirectly, yes. We have met with the Metis councils on several occasions from the south to talk about business opportunities, but at Syncrude we have almost a preferential hiring and business policy for people in our region. They are not excluded by any means. We are particularly interested in their high school graduates who go on to university because we see them as being a good potential source for professional aboriginal employees. They are from there, so they will not leave like the ones that we hire from Calgary and Ottawa.

The Chairman: I believe one of the senators asked a question about royalties. Does your company feel obliged to discuss royalties with the aboriginal people? I know that you answered it in reference to the impact agreement. I call that going around the issue. You also mentioned that provincial laws apply, so therefore, that matter must be visited by the provincial government.

Mr. Loader: The federal government and the provincial government need to spend some time working together to figure out exactly how to get around that.

The Chairman: Will it be better for the shareholders and the aboriginal people to talk directly and try to arrive at a consensus and then move to the government later? Would that not be more expedient?

Mr. Loader: Although the aboriginal community in our area would probably be very happy if corporations became involved in this discussion, they have never officially suggested that we should do it. They are working hard with the provincial and the federal governments to try to figure out where they want to go in this area. I do not think that we can have much effect until we find out what the ground rules are. The current ground rules are the laws of Alberta and Canada, and I believe we are following them to a "T." We will continue to do that.

The Chairman: Until such time as there is a further advancement in that area and you feel that ownership, can the shareholders bring the subject matter to the aboriginals?

Mr. Loader: I do not believe that either I or Syncrude can speak on behalf of our owners in that area because the vast majority of them are operating in other places in Canada on a much more national scale than we are. We are a unique company in that we operate in one small location in Canada. The majority are national companies, and some are American oil companies. It would be presumptuous of Syncrude or myself to try to figure out what their views are. I would have to pass on that question.

The Chairman: If the aboriginals mounted pressure on the oil companies, would they be willing to discuss this?

Ms Davies: The pressure has been there for the last five years. One of the elements of this agreement with the Athabasca Tribal Council put royalties on the table. We agreed -- and I am speaking for the 11 companies -- to speak with the provincial and federal governments about whether or not we could even include it as a discussion item within this agreement. The response back from the Alberta government was that if royalties were on the table, that they would not participate in the agreement.

The Chairman: Who would not participate?

Ms Davies: The Alberta government would not. Therefore, in the interests of the agreement, we removed it from the table. Both the aboriginal community and ourselves agreed to remove it from the table, and they will pursue it on their own.

The Chairman: What does that mean, "pursue it on their own"?

Ms Davies: The First Nations governments will continue to pursue it directly with the Alberta and Canadian governments.

The Chairman: Thank you for your excellent presentation. We heard a great deal about achievement and success. Keep going in that direction. Hopefully, one day you will convince your shareholders to take a good look at a genuine partnership rather than a partnership that does not really mean anything. Thank you.

Mr. Loader: Thank you very much for listening to us.

The committee adjourned.

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