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Canada’s Indigenous Peoples Eye Big Energy Deals, Await Trudeau Loan Promise

Published

7 months ago

5 minute read

From EnergyNow.ca

By Rod Nickel, Nivedita Balu, and Alistair Bell

Trudeau’s government will release its budget April 16 and has said it will include plans to guarantee loans for Indigenous communities investing in major resource projects.

Canada’s First Nations are eyeing their biggest opportunities yet to invest in multi-billion-dollar energy projects from pipelines to power lines, hinging on Prime Minister Justin Trudeau keeping a promise this spring to make the deals easier to finance.

Trudeau’s government will release its budget April 16 and has said it will include plans to guarantee loans for Indigenous communities investing in major resource projects.

The government, which is trying to cut greenhouse gas emissions, has not said whether oil and gas projects will be included but if they are then they would represent some of the biggest Indigenous investment opportunities, from the government-owned Trans Mountain oil pipeline to TC Energy’s Coastal GasLink pipeline.

At least 38 Canadian energy projects were announced with Indigenous investment between 2022 and 2024, ranging in value from C$13 million to C$14.5 billion ($10.69 billion), according to the Fasken law firm, which has worked on some of the projects.

Enbridge is willing to sell Indigenous stakes in all types of assets, including North America’s biggest oil pipeline network, the Mainline, said executive vice-president of liquids Colin Gruending, adding that a Mainline deal would be complex because it crosses the Canada-U.S. border.

“Being open to all forms of energy, I think that’s important,” Gruending said of the federal guarantee. “If we’re going to involve more nations quicker, we need to open it up.”

The federal government will update next steps for a loan guarantee program in its budget, said Katherine Cuplinskas, spokesperson for the finance minister. She did not answer questions about the program’s dollar value or whether it would include oil and gas projects.

For energy companies, Indigenous partnerships provide capital infusions and a way to speed projects through approval from provincial governments that in some cases require First Nations equity.

A federal loan guarantee would allow First Nations to borrow at favorable rates, enabling them to profit, said Niilo Edwards, CEO of First Nations Major Projects Coalition, an Indigenous-owned organization that is advising First Nations on 17 projects worth a combined C$40 billion.

“A lot of (First Nations) are presented major investment opportunities that may be in the hundreds of millions of dollars and just don’t have the capital themselves,” Edwards said.

Alberta, Saskatchewan and Ontario offer provincial guarantees and British Columbia is developing one.

Banks already profit from advising and lending to First Nations and energy companies on deals but are eager for a federal guarantee to free up capital on a bigger scale.

“Provincial/federal loan guarantee programs with clear parameters could create a powerful force for accelerating capital into Indigenous-led projects,” said Michael Bonner, head of Canadian business banking at Bank of Montreal.

Many recent First Nations resource deals involve electricity and renewable energy.

BC Hydro is talking with an Indigenous coalition about buying 50% of its northwest transmission line expansion.

Wind and solar deals are also happening, such as Greenwood Sustainable Infrastructure’s C$200-million solar farm in Saskatchewan, announced in January, which will be at least 10% owned by Ocean Man First Nation.

Spain-based EDP Renewables, which built an Ontario wind farm in 2021 with 50.01% ownership by Piwakanagan First Nation, has multiple Canadian projects under development and is looking for more.

With First Nations knowledge and support, projects advance faster, said EDP North American CEO Sandhya Ganapathy. “Canada is super-high on our radar.”

(Reporting by Rod Nickel in Winnipeg, Manitoba and Nivedita Balu in Toronto Editing by Alistair Bell)

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Alberta

Alberta calling for federal election! Premier Smith demands feds scrap dangerous oil and gas production caps

Published on November 4, 2024

By

Premier Danielle Smith, Minister of Environment and Protected Areas Rebecca Schulz and Minister of Energy and Minerals Brian Jean issued the following statement on the proposed federal oil and gas production cap:

“This production cap will hurt families, hurt businesses and hurt Canada’s economy. We will defend our province, our country and our Constitutional rights.

“Make no mistake, this cap violates Canada’s constitution. Section 92A clearly gives provinces exclusive jurisdiction over non-renewable natural resource development yet this cap will require a one million barrel a day production cut by 2030.

“The evidence is overwhelming. Three reports from reputable firms have shown that these regulations will sucker-punch Canada’s economy, a million barrels cut every day according to S&P Global, $28 billion a year in lost GDP according to Deloitte, and up to 150,000 lost jobs according to the Conference Board of Canada.

“The losses to GDP mean billions a year will disappear from the economy. Billions that won’t be going towards new schools, hospitals and roads, all for a reckless ideological scheme that will not reduce global emissions.

“Ultimately, this cap will lead Alberta and our country into economic and societal decline. The average Canadian family would be left with up to $419 less for groceries, mortgage payments and utilities every month. Canadian parents and workers will suffer while Justin Trudeau outsources the duty to provide safe, affordable, reliable and responsibly produced oil and gas to dictators and less clean producers around the world. We could be the solution. Instead, Ottawa would rather sacrifice our ability to lead.

“Tweaks won’t work. This cap must be scrapped. Alberta’s government is actively exploring the use of every legal option, including a constitutional challenge and the use of the Alberta Sovereignty within a United Canada Act. We will not stand idly by while the federal government sacrifices our prosperity, our constitution and our quality of life for its extreme agenda.”

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Energy

Ottawa’s plan to decarbonize Canada’s electricity by 2035 not feasible and would require equivalent of 23 Site C hydroelectric dams

Published on November 3, 2024

By

From the Fraser Institute

By Elmira Aliakbari and Jock Finlayson

The federal government’s plan to make all electricity generation in Canada carbon-free by 2035 is impractical and highly unlikely, given physical, infrastructure, financial, and regulatory realities. So says a new study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“Canada’s federal government has set an ambitious, and, frankly, unrealistic target of achieving complete carbon-free electricity in ten years,” said Jock Finlayson, Fraser Institute senior fellow and co-author of Implications of Decarbonizing Canada’s Electricity Grid.

The study finds that in 2023, nearly 81 per cent of Canada’s electricity came from carbon-free energy sources, including hydro, nuclear, wind and solar. But to replace the remaining 19 per cent which uses fossil fuels, in the next 10 years, would require constructing the equivalent of:

• Approximately 23 large hydroelectric dams, similar in size to BC’s Site C, or 24 comparable to Newfoundland and Labrador’s Muskrat Falls, or;

• More than four nuclear power plants similar in size to Ontario’s Darlington power station, or 2.3 large scale nuclear power plants equivalent to Ontario’s Bruce Power, or;

• Around 11,000 large wind turbines, which would not only require substantial investments in back-up power systems (since wind is intermittent) but would also require clearing 7,302 square kilometers of land—larger than the size of Prince Edward Island—excluding the additional land required for transmission infrastructure.

Currently, the process of planning and constructing major electricity generation facilities in Canada is complicated and time-consuming, often marked by delays, regulatory challenges, and significant cost overruns.

For example, BC’s Site C project took approximately 43 years from the initial planning studies in 1971 to receive environmental certification in 2014, with completion expected in 2025 at a cost of $16 billion.

What’s more, the significant energy infrastructure listed above would only meet Canada’s current electricity needs. As Canada’s population grows, the demand for electricity will increase significantly.

“It is not at all realistic that this scale of energy infrastructure can be planned, approved, financed and built in just 10 years, which is what would be required merely to decarbonize Canada’s existing electricity needs,” said Elmira Aliakbari, director natural resource studies at the Fraser Institute and study co-author.

“This doesn’t even account for the additional infrastructure needed to meet future electricity demand. Decarbonizing Canada’s electricity generation by 2035 is another case where the government has set completely unrealistic timelines without any meaningful plan to achieve it.”

  • This essay examines the implications of decarbonizing Canada’s electricity grid by replacing existing fossil fuel-based generation with clean energy sources.
  • In 2023, clean energy sources—including hydro, nuclear, and wind—produced 497.6 terawatt hours (TWh) of electricity, accounting for nearly 81% of Canada’s total supply, while fossil fuels contributed 117.7 TWh (19.1%). To replace this fossil fuel generation with hydro power alone would require about 23 large projects similar to BC’s Site C or 24 like Newfoundland & Labrador’s Muskrat Falls. Using nuclear power would necessitate building 2.3 facilities equivalent to Ontario’s Bruce Power or 4.3 similar to Darlington Nuclear Generating Station.
  • The process of planning and constructing electricity generation facilities in Canada is complex and time-consuming, often marked by delays, regulatory hurdles, and significant cost overruns. For example, the BC Site C project took approximately 43 years from the initial feasibility and planning studies in 1971 to receive environmental certification in 2014, with completion expected in 2025 at a cost of $16 billion.
  • Land requirements for new electricity generation facilities are also significant; replacing 117.7 TWh of fossil fuel-based electricity with hydro power, for instance, would need approximately 26,345 square kilometers, nearly half the size of Nova Scotia.
  • The slow pace of regulatory approvals, high and rising costs of major energy projects, substantial land requirements, and public opposition to project siting all cast doubt on the feasibility of achieving the necessary clean electricity infrastructure in the coming decade to fully replace fossil fuels in Canada.

Authors:

Elmira Aliakbari
Director, Natural Resource Studies, Fraser Institute
Jock Finlayson
Senior Fellow, Fraser Institute

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