Record Oil Output from Trans Mountain Brings First Nations Hope

Some Indigenous communities in northern Alberta view the Trans Mountain pipeline expansion as a potential turning point in their relationship with Canada’s oilsands industry.

The $34-billion pipeline, running from Alberta to the British Columbia coast, promises improved access to export markets for oilsands producers. Industry forecasts expect oilsands output to reach record levels this year, making the expanded pipeline a major development for the region.

Its expected opening on May 1 is particularly significant for the Fort McKay First Nation, a community of about 800 people of Dene, Cree and Métis descent located roughly an hour north of Fort McMurray.

“It matters to the Fort McKay First Nation,” Chief Raymond Powder said in an interview. “When opportunities like the Trans Mountain pipeline arise, the question becomes: how can we actually leverage them so Fort McKay benefits?”

Powder emphasized that while the community supports responsible industry growth, it also needs concrete opportunities and partnerships that foster local prosperity.

Fort McKay’s complicated relationship with the oilsands industry

Sitting in the heart of the Athabasca oilsands, Fort McKay is surrounded by extraction activity. Residents regularly notice the acrid scent from nearby facilities and point to dark, tarry soil along local roads as visible traces of the bitumen deposits close to the surface.

The community’s experience demonstrates the complex and sometimes contradictory impacts of the oilsands on Indigenous peoples. Fort McKay is one of the wealthier First Nations in Canada, in part because of impact benefit agreements with oilsands developers and a range of Nation-owned businesses that serve the oil and gas sector.

Those economic benefits have translated into tangible local investments: a long-term care centre on the Athabasca River, a modern arena, a virtual golf facility and other amenities that are uncommon in many reserves.

At the same time, the relationship has not always been positive. “If you look back at Fort McKay’s history, we didn’t start with a good relationship with industry,” Powder said. The community’s identity and traditional livelihood are closely tied to the land, and industrial development brought major social and environmental disruption.

Current concerns remain, especially over the safety and environmental risks posed by large oilsands wastewater tailings ponds in the area. Powder stressed that while industry has brought new services and infrastructure, the impacts on traditional ways of life continue to matter.

Not all Indigenous communities view industry partnerships the same way, and perspectives vary depending on local experiences and priorities.

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The environmental impact of oilsands development

Eriel Deranger, a member of the Athabasca Chipewyan First Nation, has been active in raising concerns about environmental and health effects linked to oilsands operations. Her community has taken legal action in response to a series of leaks from tailings ponds at a nearby facility.

Deranger is also executive director of Indigenous Climate Action, an advocacy organization focused on protecting water, air and community health from the impacts of fossil fuel development.

She describes the dynamic between many Indigenous communities and the oilsands as an “economic hostage situation.” In her view, communities often endure environmental harm and decline to speak out because limited alternative economic opportunities make industry involvement seem necessary.

“We can’t assume that partnership equals consent or well-being,” Deranger said. She warned that relying on a single extractive economy is risky, particularly as climate-driven threats such as increasing wildfire risk affect the region’s long-term viability.

A double-edged sword

Justin Bourque, former CEO of the Willow Lake Métis Nation and president of Âsokan Generational Developments, described oilsands development as a double-edged sword. On one hand, resource extraction has been carried out on traditional Indigenous territories, often altering the environment and local ways of life. On the other, well-structured partnerships can create much-needed economic opportunities.

Bourque sees a growing trend toward equity ownership models and longer-term arrangements that give Indigenous communities a more predictable revenue base. He also pointed to shifting corporate priorities and the growing influence of environmental, social and governance (ESG) considerations as factors encouraging deeper and fairer partnerships with Indigenous communities.

He referenced recent federal announcements aimed at supporting Indigenous participation in resource projects — measures designed to make it easier for communities to secure financing and take ownership stakes in energy and natural resource ventures. Bourque believes these steps could be a positive catalyst, enabling communities to play a more active role and strengthening the industry through shared investment.

Fort McKay First Nation’s potential project with Suncor Energy

In a recent development, Fort McKay First Nation signed a memorandum of understanding with Suncor Energy to explore an oilsands lease development on reserve land. Suncor is currently assessing the quantity and quality of minable bitumen in the area.

If the project proceeds, it would mark the first-ever oilsands production on reserve lands in Canada — a milestone that Fort McKay leaders say could set a new course for Indigenous-led resource development.

Powder described the agreement as a major achievement that could secure the community’s long-term future by ensuring Fort McKay shares in the benefits of any industrial growth in the region.

“We don’t want any ceiling on opportunities for Fort McKay when it comes to industry and the spinoffs of what that Trans Mountain pipeline has to offer,” he said, underlining the community’s desire to grow alongside the industry while safeguarding local interests.