Beyond the Bottom Line
A financial advisor develops a
specialized skill set in helping
a First Nations community conduct social
and environmental assessments.
By Katie Wattie
When Jason Gray, BA’00, MBA’06, took courses in northern planning and development studies as an undergrad and studied the energy sector as an MBA student, he had no idea how useful his U of C experience would be for his Vancouver-based career in management consulting at Meyers Norris Penny LLP (MNP), a leading chartered accountancy and business advisory firm.
In 2006, the Klahoose First Nation in British Columbia engaged MNP to assist them with the assessment of the economic and social impacts of the East Toba and Montrose Run-of-River Power Project, a renewable energy project proposed by Plutonic Power Corp. The $575-million project consisted of two run-of-river green power generation sites to be constructed at the headwaters of the Toba Inlet on the East Toba River and Montrose Creek.
Toba Inlet is in traditional Klahoose territory and access to the site requires crossing Klahoose reserve land. Although the proposed project would result in significant employment and royalty income for the Klahoose, they were hesitant to enter into an agreement without fully assessing the project.
Gray was part of the MNP team hired by the Klahoose chief and council to assist them with the assessment and negotiations. The project team reviewed the financials and other information provided by Plutonic and conducted several rounds of community meetings to inform reserve members of the potential risks and rewards of the project.
“The most challenging part of this project was taking the complex financial, social and environmental assessments and presenting them in a way that could be easily understood in a community meeting setting,” says Gray. “This was complicated by the fact that the approximate 200 Klahoose band members were spread over three separate communities on- and off-reserve; that the Klahoose chief and council, and the project team, wanted to ensure everyone had the opportunity to have their say; and that the timelines for the consultation and negotiations were quite compressed.”
But Gray found the challenges were not insurmountable. After months of community consultation, he and his team were asked to represent the Klahoose during the financial negotiations with Plutonic. Those successful talks took three months and included several rounds of community meetings to establish a royalty agreement, employment targets, a working relationship structure and the formation of a project liaison committee.
Construction of the East Toba and Montrose Run-of-River Power Project has begun and is expected to be completed in fall 2010. The 196-megawatt project will generate enough electricity each year for approximately 75,000 homes and will have the ability to displace an estimated 455,000 tonnes of greenhouse gases annually, or the equivalent of taking 80,000 cars off the road per year.
“It was rewarding to come to a successful deal that will have long-term, beneficial impacts for the Klahoose from job creation to financial returns,” says Gray. “The Klahoose will have the financial means to pursue other opportunities and exposure to project-related opportunities to build capacity for future growth and success.”
The experience will help Gray as he continues to work with First Nations communities on energy generation projects in Alberta and B.C. “The project reinforced that there are numerous ways to assess a project. Financial returns cannot be considered in isolation of a project’s impact on surrounding communities, the environment and future generations,” he says. “The Klahoose First Nation focus on seven generation planning—what the past seven generations will think about what they’ve done and how their actions will impact the future seven generations.” U