Increasing marketing arrangements
Over the last several years, we have successfully grown relationships and expanded business development opportunities with Aboriginal communities through Suncor’s downstream business.
These mutually beneficial business relationships between Suncor and Aboriginal communities leverage our Petro-Canada brand and communities’ goals for economic development. During 2017, three new retail sites opened. There are now 26 Petro-Canada branded retail sites owned or leased by First Nations across Canada.
In the next 10 years, we want to expand these efforts and increase our business with Aboriginal communities because it makes good economic sense – for Suncor and for Aboriginal Peoples across Canada.
Increase Aboriginal supplier-spend
Suncor has a long history of working with Aboriginal suppliers and communities, particularly in the Wood Buffalo region.
In 2017 Suncor spent $521 million with Aboriginal suppliers across Canada, and we have spent approximately $4 billion with Aboriginal suppliers since 1999. This includes both direct spend and indirect spend where non-Aboriginal suppliers sub contract to Aboriginal suppliers.
Suncor defines an Aboriginal business as a company owned and operated, either wholly or in part (i.e., ≥ 51%) by an Aboriginal community or entrepreneur. This is in line with the Canadian Council of Aboriginal Business (CCAB) and Northeastern Alberta Aboriginal Business Association (NAABA) definitions.
We want to apply what we’ve learned over the last 20 years more consistently across our businesses, so that more Aboriginal entrepreneurs and communities have the opportunity to participate in and benefit from our operations.
Working with Aboriginal businesses and communities is good business for Suncor, and it is one thing Suncor can do to contribute to economic reconciliation with Aboriginal Canadians. This is aligned to the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) and the Truth and Reconciliation Commission’s Call to Action for corporate Canada.
Suncor signed two significant business partnerships with First Nation communities in 2017. The signing of these agreements is the result of many years of hard work and discussions to understand and identify areas of mutual interest. Through this process, we’ve developed greater understanding and trust – and we worked collaboratively to achieve this. This demonstrates a very positive evolution in our long-term relationships and new ways that we are working together with communities.
On November 2, 2017 Suncor purchased a 41% equity interest in PetroNor, a petroleum products distributor across the James Bay and Abitibi-Témiscamingue regions of Quebec. Owned and operated by the James Bay Cree, PetroNor services commercial, industrial, aviation and mining and residential clients. PetroNor’s technical expertise and logistics capabilities have helped them support the unique and specialized needs of northern customers and communities for many years.
“This announcement clearly shows that we are integral players in business and we have the ability and means to build strong relationships,” says Ted Moses, president, PetroNor. “We believe Suncor's continued willingness to forge a long-term business relationship with the James Bay Cree demonstrates a shared belief in the long-term growth opportunities for PetroNor and the northwestern regions of Quebec.”
As part of the agreement, under our Petro-Canada brand, we will continue to exclusively supply PetroNor with fuel and distillate from our Montreal refinery to the northwest Quebec region. We will also work collaboratively with PetroNor to pursue additional opportunities in northwestern Quebec to better serve customers in the region.
East Tank Farm Development
At a signing ceremony on November 22, 2017 Suncor, Fort McKay First Nation (FMFN) and Mikisew Cree First Nation (MCFN) announced the completion of the acquisition by FMFN and MCFN of a 49% interest in Suncor’s East Tank Farm Development (ETF-D).
The ETF-D, part of the larger East Tank Farm, provides a hub for receiving, storing, cooling, blending and shipping bitumen to market on behalf of the Fort Hills partners. FMFN and MCFN financed the acquisition through a bond offering.
“The deal represents the largest business investment to date by a First Nation entity in Canada, and not only demonstrates the great potential for partnerships between First Nations and industry but serves as a model for how First Nations can achieve greater self-determination through financial independence,” says, FMFN Chief Jim Boucher. “It is an example of how First Nations and natural resource development companies can find ways to support each other for the mutual long-term benefits.”
This agreement is one of the largest in size and scale for the First Nations and Suncor, and is an important, historic new way for business and First Nations to work together as partners. The investment will provide a steady stream of revenue to both FMFN and MCFN for at least 25 years.
“The economic benefits generated from this deal will help our Nation to build capacity within our businesses, develop infrastructure in our community, fund social economic programs, and provide us with the means to help pay for education and training for our youth, and will be felt in our community for generations to come,” says MCFN Chief Archie Waquan.
Planning for long-term relationships
Joint Business Development Plans (JBDPs) with key communities in the Regional Municipality of Wood Buffalo have been developed. The JBDPs provide structure on how we work together and collectively focus on key objectives. These plans include annual work plans that help Aboriginal communities to direct efforts where there is a possibility to increase business and help Suncor to track suppliers’ capabilities.
Relationships are essential to advancing business opportunities. Meaningful participation requires the ability to understand each other’s motivations, strengths and limitations. It can also require the willingness to have challenging conversations in an authentic and respectful way. Suncor believes this kind of dialogue is important to having long-term, mutually beneficial relationships.
Our approach focuses on listening, being transparent and honest about the opportunities that exist, and being fair and firm when explaining decisions – no matter the outcome.
Christina River Enterprises (CRE), the business entity of the Fort McMurray #468 First Nation, is one example of a long-term business partnership. Chief executive officer Samantha Whalen reflects “2017 was a year we experienced significant growth with Suncor and we are optimistic with the future outlook for Fort McMurray #468 First Nation and CRE. We value working with Suncor Energy who we believe is a leader on building bridges for local Aboriginal communities.”
While we monitor our supply chain spending and want to continue to grow our work with Aboriginal businesses, we are also mindful that it must be done in the right way. We will continue to be commercially responsible and ensure agreements are of benefit to all parties involved, and not simply focused on achieving a set dollar value or target. Suncor’s engagement with Aboriginal suppliers is part of the way we do business for procurement opportunities across Canada.