5.28% ROI Vs Environmental Disater

To paraphrase Diogenes …The more I know about Enbridge the more I love the decision to block them.

For the past year or so we have been hearing from Enbridge that there would be permanent economic spin-off for the First Nations communities who allowed the proposed pipeline to be built on their territories. BC Premier Christy Clark even cited approval of the First Nations along the route as one of five conditions to support the pipeline. Enbridge refused to make the details of the permanent economic spin-off for the First Nations communities’ public, as negotiations continued and they did not want to jeopardize their advantage.

Now we know why.

Northern Gateway offered First Nations communities along the route the opportunity to buy into a 10% equity stake in the pipeline. After repayment of the loans which includes a one per cent interest for Enbridge over and above the bank rate – each community would see $70,500 a year – hardly a windfall considering the environmental risk. These funds will not even cover the costs of one full time nurse per community.

With 45 First Nations communities (18 in Alberta and 27 in BC) potentially splitting that 10% equity position valued at $600Million, each community would have to raise $13.34Million each in order to net $70,500/annum a 5.28% ROI.

The First Nations communities can double that return in just about any mutual fund investment without risking the land for the next 50 generations.