In April, Enbridge announced a $4-billion expansion of its Westcoast pipeline to boost natural gas transportation capacity.
Enbridge’s public shareholders are not the only ones who stand to benefit. Last July, 36 First Nations in B.C. acquired a 12.5 per cent stake in the same pipeline system.
That deal is one of many that reflects a shift in how Indigenous groups are participating in major projects, project insiders say. Across Canada, Indigenous communities are increasingly becoming project co-owners by taking equity stakes in development projects.
“Equity participation does not necessarily mean carte blanche support for a project,” Amy Carruthers, a partner in the Vancouver office of national law firm Fasken, told Canadian Affairs in an email.
“But it means that when the Indigenous partner is participating in project decisions or governance, they are doing so from the perspective of an owner.”
JP Gladu, a principal at Indigenous consulting firm Mokwateh and Suncor board director, notes project proponents are embracing Indigenous equity participation as well.
“Capital does not like risk, and it’s like water: it’ll flow the easiest route and expect the biggest return. And in Canada, with our Indigenous rights … Canada and industry have finally recognized that it’s better to have Indigenous communities inside the tent because that creates certainty,” he said.
Co-owners
Canadian law requires governments to consult with Indigenous groups who stand to be affected by development projects.
As part of this process, project proponents will often undertake consultations to secure Indigenous groups’ consent. Traditionally, these consultations have been formalized in impact benefit agreements, which commit developers to providing Indigenous communities with benefits such as jobs, procurement opportunities and revenue sharing.
Today, though, Indigenous groups are increasingly taking ownership stakes as well.
“Equity participation acknowledges a permanent economic and governance relationship between a project sponsor and Indigenous governments as co-owners,” said Peter Danner, a partner in the Calgary office of national law firm McCarthy Tétrault .
Carruthers notes that Indigenous equity participation does not necessarily replace traditional impact benefit agreements.
“However, the scope of benefits provided under those arrangements may be reduced to account for the Indigenous partner’s financial interest under the equity arrangements.”
The federal government says facilitating Indigenous equity participation is important because it reduces project risk and improves outcomes.
“Early and meaningful inclusion of Indigenous interests reduces risk, prevents costly delays, builds trust, and fosters a more stable environment for investment,” a spokesperson for both Crown-Indigenous Relations and Northern Affairs Canada and Indigenous Services Canada said in an emailed statement.
Danner agrees that the shift toward equity participation has impacts beyond financing.
“One of the key benefits … in addition to economic alignment between project sponsors and Indigenous governments, is the increased level of communication between project sponsors and Indigenous governments,” he told Canadian Affairs in an email.
“This alone can dramatically improve the relationship between parties.”
Government guarantees
Given the size of some development projects, many Indigenous communities would lack the funds to become equity participants on their own.
To address the potential lack of capital, in 2025, the federal government launched the Indigenous Loan Guarantee Program, which offers up to $10-billion in total guarantees. An individual guarantee ranges from $20 million to $1 billion per transaction.
Alberta, B.C., Manitoba, Ontario and Saskatchewan have similar loan guarantee programs in place.
In Alberta, for example, the Alberta Indigenous Opportunities Corporation (AIOC) has backed eight major projects, approving more than $745-million in loan guarantees since its creation in 2019.
The province backs Indigenous stakes in resource, agricultural, technology and other industries. It has reported no defaults to date.
“[W]hen Indigenous groups have access to capital and meaningful ownership opportunity, it can create long-term revenue streams that support self-determination, sustainability and local priorities,” Indigenous Relations Minister Rajan Sawhney told Canadian Affairs in an email.
Danner and Carruthers agree that these government programs are essential.
“Many of these deals would not be possible without this kind of financial backstop,” Carruthers said.
For example, the B.C.-based Haisla Nation holds a 50.1 per cent stake in Cedar LNG, a $6-billion liquified natural gas project widely cited as the first majority Indigenous-owned LNG development in the world.
In Ontario, the electricity utility Hydro One offers First Nations up to 50 per cent ownership stakes in large transmission projects.
Across the country, Indigenous communities now have ownership interests in more than 5,000 kilometres of pipeline infrastructure.
The First Nations Major Projects Coalition, a non-profit that helps First Nations secure equity ownership, has estimated that major projects affecting Indigenous lands could represent more than $525-billion in capital investment over the next decade. Of this, Indigenous groups could take as much as $50-billion in equity stakes.
No guarantee of consensus
Gladu, who is an Anishinaabe leader from Sand Point First Nation on Lake Nipigon, Ont., says equity participation is one of the best ways to ensure Indigenous communities are on board with a project.
“Equity is not full consent — but it is the purest form of consent we have right now,” he said.
However, some projects continue to divide communities and regions. The proposed $10-billion Ksi Lisims LNG project in northern B.C., for instance, has secured support from some Indigenous partners but not others.
In cases with significant opposition, projects can face regulatory delays and legal challenges, or even be scrapped altogether. Communities that decline equity participation may still assert their rights through consultation processes or public opposition.
Equity participation can also introduce new complexities.
“Key challenges include achieving the right balance between the economic or commercial elements of a transaction and the relationship-driven elements like governance,” said Carruthers.
“The arrangements need to make sense financially and from an operational perspective.”
Danner says these challenges can be exacerbated in large consortium deals.
“Complexity is amplified when there is a large number of Indigenous governments in the investing consortium,” he said.
And the financing model itself has limits. Equity participation has worked best for established infrastructure such as pipelines, says Danner. But it has been more challenging to apply to new projects or ones involving different types of assets with less stable revenue streams.
Sawhney acknowledged similar constraints.
“Equity participation is not one-size-fits-all,” she said in her email. “Outcomes depend on capacity, scale, and market conditions.”
But as Gladu sees it, finding tailored solutions to make deals happen delivers benefits far beyond the local level.
“ When you invest in relationships and business activity with communities, it creates huge opportunity for all of Canada.”
