Indigenous support is critical to energy, infrastructure and resource project success in Canada. Indigenous involvement in these projects is also evolving.
As interest in Canadian Liquefied Natural Gas (LNG) grows, what are the key considerations around Indigenous partnerships and investment? To assist prospective investors in Canadian LNG, whether foreign or domestic, we discuss:
- Indigenous consultation and equity investment.
- Indigenous loan guarantees, financing support and improving project bankability.
- Indigenous engagement and Canada’s Major Project Office
This is the third part in our series on investing in Canadian LNG. In Part 1, we looked at Canadian LNG from a global context and highlighted key features of Canadian LNG projects relative to their international counterparts. In Part 2, we discussed key commercial and legal considerations raised by investing in Canadian LNG. Visit fasken.com and subscribe.
Indigenous Consultation and Equity Investment
Advancing material energy, infrastructure and resource projects in Canada requires early, thorough and meaningful consultation with impacted Indigenous groups. Canadian LNG projects are no different.
Indigenous consultation and accommodation are critical for two principal reasons. First, to fulfil constitutionally protected rights and other regulatory obligations under Canadian law, most importantly the duty to consult. Second, and equally importantly, to foster trust, collaboration and mutual benefit with local and other potentially impacted Indigenous communities. The goal is to align a project's plans with the rights, interests and long-term ambitions of these communities, typically by prioritizing environmental stewardship, cultural preservation and economic empowerment. By committing to Indigenous involvement from the outset, project proponents can build stronger partnerships and boost project certainty.
Towards this end, recent years have seen Indigenous groups increasingly seeking greater participation in Canadian energy, infrastructure and resource projects. A longstanding approach has revolved around “impact and benefit agreements” (IBAs) between project proponents and Indigenous groups. These focus on financial support and compensation for cultural and environmental impacts while also guaranteeing economic benefits such as training and employment. IBAs remain a cornerstone of Indigenous engagement for resource project proponents in Canada. However, more and more, Indigenous groups are also seeking an equity interest in projects to provide them with direct economic benefits, decision-making influence, and a long-term investment in the project’s success.
Indigenous Loan Guarantees, Financing Support and Improving Project Bankability
A key development in facilitating Indigenous equity investment in Canadian resource projects has been the recent emergence and growth of significant government-backed Indigenous loan guarantees and equity lending programs.
For many Indigenous communities, the hurdle has not been a lack of interest in partial project ownership, but access to sufficient affordable financing to support the investment of capital. Because on-reserve land and assets generally cannot be pledged as security, traditional project lenders have often viewed Indigenous equity as higher risk or required guarantees that were not available. The result was that Indigenous participation was frequently limited to a small or carried equity interest rather than meaningful ownership.
With government support through loan guarantees and equity loan programs, this dynamic is changing significantly. These programs help bridge financing gaps by reducing lender risk when conventional collateral is limited or unavailable. They can also lower financing costs, extend loan terms, and make it feasible for communities to finance larger equity stakes in assets such as LNG facilities, pipelines, power generation and transmission infrastructure, and related projects.
As these programs have expanded at both the federal and the provincial level in many provinces, they are reshaping how large projects are financed and structured in Canada. Initiatives such as the federal Indigenous Loan Guarantee Program, the Canada Infrastructure Bank’s Indigenous Equity Initiative, and similar provincial programs are enabling Indigenous groups to come to the table as long-term equity partners.
Numerous benefits flow from this for investors and project proponents. The project’s sustainability and reconciliation credentials are enhanced. The project is made more resilient to regulatory and societal scrutiny. Risks related to legal challenges and community opposition are often mitigated. All in all, Indigenous loan guarantees and financing support programs are increasingly viewed as a practical way to unlock capital, reduce project risk, increase project certainty and improve project bankability.
Indigenous Investment and Canada’s Major Project Office
Canada’s federal government launched the Major Projects Office (MPO) in August 2025 to help advance nation building projects throughout the country. The symbolism behind the MPO’s launch is important: it sends a clear signal to domestic and international investors that Canada’s federal government is committed to supporting the expedited and successful development of important energy, infrastructure and resource projects, including LNG.[1]
Importantly, the MPO is implementing a “one project—one review” framework for designated projects. The aim is to streamline federal decision-making, greatly shorten regulatory timelines, and coordinate Crown actions and approvals across governmental departments. Facilitating and improving a project’s engagement with local Indigenous communities is central to the MPO’s mission. The MPO is putting an emphasis on Indigenous consultation, environmental assessments and sustainable development. The MPO also provides a centralized framework for Indigenous engagement, consultation and collaboration.
LNG proponents, along with their Canadian and international investors, stand to benefit from the MPO framework. By leveraging the MPO’s streamlined process, stakeholders can pursue project designation early and more quickly and effectively engage in Indigenous consultations. From there, they can better negotiate and structure Indigenous partnerships and other arrangements. They can also more effectively address permitting, financing, and development challenges, all aligned on a coordinated path toward mutually beneficial Indigenous involvement, reduced project risk, and accelerated project completion.
Conclusion: The Benefits of Indigenous Partnerships and Investment
Canadian LNG is uniquely positioned to support the world’s growing energy needs. The country enjoys abundant natural gas reserves, proximity to key Pacific basin markets, and political stability. Indigenous consultation and, increasingly, Indigenous equity participation, are critical to successful resource project development in Canada. The benefits of Indigenous investment and partnerships include greater project resilience, reduced project risk, and improved project bankability.
Thanks to government-backed Indigenous loan guarantees and lending programs, Indigenous investment also offers an additional and potentially significant source of project capital. The establishment of the MPO, on the other hand, is an important investment catalyst by streamlining regulatory processes, coordinating Indigenous consultation, reducing timeline risks and enhancing project bankability for investors.
With successful examples of investments in Canadian energy and infrastructure such as LNG Canada, the country is building a proven track record of reliable energy partnerships. By capitalizing on its resources, regulatory reforms, and commitment to reconciliation, Canada is well-positioned to advance LNG projects that meet the energy needs of global markets and attract substantial domestic and foreign investment.
