Indigenous leaders pitch top federal officials on loan-guarantee plan to get major resource projects built

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A coalition of Indigenous leaders, together with senior business and banking executives, are meeting with top federal officials this week to urge them to create a national loan-guarantee program as a way to build more resource projects on traditional territories.

Proponents of major energy and mining projects are increasingly seeking to partner with Indigenous communities, but many First Nations lack access to the capital required to take on significant equity positions.

Sharleen Gale, who is chair of the First Nations Major Projects Coalition and Chief of B.C.’s Fort Nelson First Nation, is leading a delegation on Parliament Hill to promote the creation of a national Indigenous loan-guarantee program.

According to Ms. Gale, a national program that expands on similar successful provincial lending options in Alberta, Saskatchewan and Ontario is the key to unlocking major projects that are often held up in regulatory and financing delays.

“In order to get these projects built, you’re going to need Indigenous participation and consent,” she said, in a briefing Wednesday for a small number of reporters organized by the Business Council of Canada. Ms. Gale said the well-trodden alternative is for businesses and governments to throw their support behind projects that ultimately run into legal challenges by Indigenous communities.

“And then we’re in court. And then we win, and we win, and we win,” she said. “I feel like, by having First Nations involved, you see the regulatory process speed up. You see these projects built on time, without delay.”

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The Liberal government’s 2023 budget signalled a desire for Canada to boost economic growth through critical supply chains, supporting projects like mining critical minerals, electric-battery and clean-power production and zero-emission vehicle manufacturing. The First Nations Major Projects Coalition is involved in some of those sectors, as well as traditional oil and gas projects.

The government also promised in the budget to release a plan this year to improve the efficiency of the impact-assessment and permitting processes for major projects, including “improving engagement and partnerships,” in an effort to address industry concern over project delays.

Another key theme of the budget was to compete with new project incentives in the U.S. Inflation Reduction Act. The IRA increased the total loan authority of an existing Tribal Energy Loan Guarantee Program from US$2-billion to US$20-billion.

Niilo Edwards, the coalition’s chief executive officer, said the proposed Canadian loan-guarantee program seems to be getting traction in Ottawa.

“We’re now pushing on an open door,” he said. “I think there’s some in central agencies that are still grappling with the details as to how this would work. We’re encouraging everyone not to let the perfect become the enemy of the good here and get something out the door sooner rather than later. Because the markets need a signal that Canada is serious about helping Indigenous nations advance partnerships.”

Ms. Gale and Mr. Edward’s tentative schedule includes meetings with incoming Clerk of the Privy Council John Hannaford, Prime Minister Justin Trudeau’s senior adviser Ben Chin, Finance Minister and Deputy Prime Minister Chrystia Freeland’s senior staff, several senior public servants across a range of departments and Liberal, Conservative and NDP MPs.

Some of the meetings will include business executives from Cenovus CVE-T, Rio Tinto, Enbridge ENB-T, CIBC CM-T, RBC RY-T and Hydro One H-T.

The First Nations Major Projects Coalition is financed by a range of large business organizations. It also received $13.5-million last year from the federal Natural Resources department as part of the Indigenous Natural Resource Partnerships program that aims to increase Indigenous participation in resources projects.

The coalition provides support for Indigenous communities that are looking to become equity partners in major projects. It is currently involved in eight projects, including the Clarke Lake geothermal project, the Coastal Gas Link Pipeline and the NeToo Hydropower project in B.C. and Hydro One’s Chatham Kent to Lakeshore Transmission Project in Southwestern Ontario.

Ms. Freeland’s press secretary, Adrienne Vaupshas, said in a statement that the government has several programs available to help Indigenous communities participate in major projects and is committed to further improving the quality of benefits communities receive from development.

“We continue to explore additional federal supports to increase access to capital for Indigenous groups to invest in major resource projects,” she said.

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John Stackhouse, RBC’s senior vice-president, office of the CEO, said private investors are seeking Indigenous partners and a national loan program would help these projects move ahead.

“Most companies are now looking for shared ownership,” said Mr. Stackhouse, describing it as a significant aspect of securing the consent of the Indigenous communities in the area of a project. However, landownership rules tied to the Indian Act often complicate a First Nation’s ability to finance its equity share.

“The communities don’t have a balance sheet to borrow against. That’s fundamentally the challenge,” he said, suggesting a national loan-guarantee program would address that and allow more First Nations to become equity partners.

Mr. Stackhouse said successfully involving Indigenous communities in resource projects must occur if Canada is going to meet its target of creating a net-zero emissions economy by 2050.

“It’s crystal clear that Indigenous equity is going to be essential to our success of getting to net zero,” he said. Looking ahead at potential projects over the coming years, Mr. Stackhouse said about half of the advanced critical-mineral opportunities in Canada are on Indigenous territory. Many solar and wind sites are also on First Nations’ traditional lands.

He said RBC estimates that about $10-billion to $50-billion of Indigenous equity needs to be raised over the course of this decade to advance those projects.