Freeland says $5 billion just a start for Indigenous loan guarantee program

TORONTO — The $5-billion announced for an Indigenous loan guarantee program in last week’s budget is just a start, said Deputy Prime Minister Chrystia Freeland.

“Nothing would make me happier than seeing that $5-billion oversubscribed and needing to put in place even more,” she said, speaking to media at the First Nations Major Projects Coalition conference in Toronto on Tuesday.

The program is designed to help Indigenous communities buy equity in natural resource and energy projects by securing them more favourable interest rates. 

Freeland said she would like to see the program up and running quickly, and the government has set up a special office in the Privy Council to get clean energy projects done faster.

But the government also faced criticism at the conference for being slow to roll out a key framework to help draw energy transition investments. 

Speaking at a morning session at the conference, former Bank of Canada governor Mark Carney said the government needs to roll out a transition finance framework that would help spell out when investments in grey areas like critical minerals or natural gas should be counted as part of the climate solution.

“It will make a huge, huge difference to getting the level of capital to the solutions that we all need,” said Carney, who also leads transition investing at Brookfield Asset Management and is the U.N. special envoy for Climate Action and Finance. 

“Major countries are adopting this framework and mainstreaming it. So the U.K., Japan, Singapore, European Union and the United States. And it’s essential now that Canada does the same.”

An advisory group submitted a proposed framework to the government some 18 months ago, and frustration is growing at the slow pace of rolling it out.

“It’s been sitting on the table,” said Carney. “It’s essential the federal government and our regulators implement that work.”

Freeland said the government and many partners have been working on the framework, also called the green taxonomy.

“The building blocks are all there, and we’re working hard to complete the process as quickly as possible.”

While the taxonomy could help lure investments to transition projects that Indigenous communities would also like to get off the ground, the loan guarantee program doesn’t limit what kind of resource or energy projects are supported. 

There is expected to be high demand for the program, with Indigenous investments already expected in major projects like the Trans Mountain pipeline expansion, while several First Nations have already signed option agreements to buy into the Coastal GasLink natural gas pipeline.

The First Nations Major Projects Coalition estimates there will be $525 billion in capital investment opportunities for Indigenous equity participation over the next 10 years.

Mark Podlasly, chief sustainability officer of the coalition, said in a conversation with Freeland that the program should help start a historic transfer of wealth to First Nations.

“I would like to congratulate you again, and your government, for taking the biggest step toward economic reconciliation we have ever seen as a country.” 

This report by The Canadian Press was first published April 23, 2024.

Ian Bickis, The Canadian Press