In place of our usual blog this week, here’s a first-rate posting from Fasken, BC’s largest law firm and one of the largest law firms in Canada with an international reach. It has been very lightly edited.
Canada’s energy sector is at a pivotal moment. In response to global economic shifts and the growing demand for energy and other infrastructure, the federal government enacted the One Canadian Economy Act (often referred to as Bill C-5), on June 26, 2025.
This legislation introduced two new statutes: the Building Canada Act and the Free Trade and Labour Mobility in Canada Act. The Building Canada Act aims to accelerate the development of major infrastructure projects deemed to be in the national interest.
However, its fast-tracking ambitions have raised serious concerns among some Indigenous communities, particularly due to the potential for the Building Canada Act to undermine meaningful consultation in various instances.
The Building Canada Act establishes a streamlined process for approving projects of “national interest,” including energy infrastructure, critical mineral mining and processing projects, and other clean energy initiatives.
Criteria for designation
The act empowers the federal government to designate projects for expedited review and approval, with the aim to shorten timelines from five years or more to just two years. The criteria for national interest designation include, but are not limited to, the following:
- Strengthening Canada’s autonomy, resilience and security;
- Providing economic or other benefits to Canada;
- Having a high likelihood of successful execution;
- Advancing the interests of Indigenous Peoples; and
- Contributing to clean growth and to meeting Canada’s objectives with respect to climate change.
To implement this process, the government launched the Major Projects Office (MPO), headquartered in Calgary. The MPO coordinates regulatory approvals and financing for designated projects.
Energy infrastructure projects now under consideration by the MPO include the potential Phase 2 of the LNG Canada terminal, the Ksi Lisims LNG project, the Iqaluit hydro project, the North Coast transmission line in BC, and the Darlington New Nuclear SMR project, many of which have already received full regulatory approval and entered the construction phase.
Indigenous Response
Indigenous communities have responded to the Building Canada Act with a mix of strategic engagement, concern, and opposition.
The most common concern is the potential erosion of Section 35 constitutional rights and perceived movement away from implementation of the principles of free, prior, and informed consent.
Indigenous decision-making processes, such as community assemblies, elder consultations, and technical reviews, each require time, deliberation, and respect for traditional governance. The accelerated timelines contemplated under the Building Canada Act are seen by some as incompatible with these processes.
Certain Indigenous communities with modern treaties that establish clearly defined land ownership and jurisdiction are finding ways to work within the Building Canada Act framework, negotiating agreements early and leading regulatory approval processes. However, Indigenous communities without treaties face different constraints, as the Building Canada Act provides fewer formal mechanisms to influence project outcomes.
Accordingly, there is a paradox that needs to be addressed: while the Building Canada Act aims to fast-track development, it cannot fast-track constitutionally protected rights of Indigenous Peoples.
Building trust and support from Indigenous communities takes time. As a result, projects that sidestep genuine (and early) engagement risk legal challenges, community resistance, and the loss of social license.
Indigenous Equity Participation
As the legal, political and economic landscape has become more attuned to Indigenous rights and reconciliation, a shift has taken place: Indigenous equity participation is now central to major project development.
Equity ownership is increasingly seen not only as a path to economic reconciliation, but also as a strategic mechanism for de-risking projects and aligning interests between Indigenous communities and industry.
Three major trends are driving Indigenous equity participation in Canada’s energy sector:
- First, federal and provincial loan guarantee programs have enabled more nations to make larger equity investments. Recent examples include the Stonlasec8 partnership’s $715 million transaction to acquire a 12.5 percent interest in Enbridge’s gas pipeline distribution system in British Columbia.
- Second, government project development programs are increasingly incorporating Indigenous equity participation as an important rated criterion. For example, Ontario’s Independent Electricity System Operator has awarded the majority of recent energy storage projects to partnerships with at least 50% Indigenous ownership.
- Third, Indigenous communities are demonstrating growing sophistication and ambition, actively pursuing equity stakes to build wealth and long-term economic opportunity tied to their territories.
Legal and Strategic Considerations
When it comes to structuring Indigenous equity partnerships, there are certain terms that typically arise in negotiations, including but not limited to:
- Governance, Management and Control: Indigenous partners often seek meaningful roles through board representation, management committee seats, and approval rights over key decisions. This is especially the case involving multi-community projects where governance complexity can increase significantly.
- Exit Rights: Well-structured exit mechanisms, such as rights of first refusal, right of first offer, lock-up periods, and anti-dilution protections are increasingly common. These provisions often aim to maintain project stability and protect the ownership of Indigenous and other partners.
- Distributions and Dividends: Given potential revenue and other financial variability in energy infrastructure, transparent and stress-tested financial models are critical to ensuring communities can plan for long-term needs. Importantly, the nature of this variability differs by project type. Oil and gas pipelines and midstream assets often experience fluctuating revenues due to operational disruptions that trigger reductions in fixed payments. Electricity transmission projects can offer more stability but still involve variable costs like maintenance, insurance and holdbacks tied to different phases of the project lifecycle. Indigenous communities often seek predictable distributions they can budget around, though the underlying economics of many projects may not allow for such predictability. Tools like floor guarantees and separate benefit payments can offer predictability and stability, especially in the early years of partnership.
- Capacity Development and Capacity Funding: Indigenous communities increasingly seek commitments that extend beyond employment, emphasizing training in areas like project management, governance, and administration, skills that can be applied to future projects. Equally important is inter-cultural training for non-Indigenous staff and third-party suppliers, which foster respectful, inclusive work environments. Many partnerships also integrate Indigenous protocols and traditions directly into governance and management frameworks, shaping how decisions are made and how projects engage with the territory. Capacity funding plays a key role in this process by helping communities fill knowledge gaps and build internal expertise, ultimately making project development faster, more predictable, and more efficient. These commitments reflect the deeper purpose of Indigenous equity participation: not just financial returns, but intergenerational wealth creation, cultural safety, and shared prosperity rooted in long-term relationships.
Indigenous Equity: Financing & Opportunities
Access to affordable capital continues to be a significant barrier to Indigenous equity participation in major projects. Historically, Indigenous groups faced substantial challenges in securing financing for equity investments beyond nominal amounts, largely due to limited existing financial resources.
However, emerging programs bridging the gap. These include long-term financing from the First Nations Finance Authority, targeted loans through the Canada Infrastructure Bank’s Indigenous Equity Initiative, and federal and provincial loan guarantee programs, as noted above.
Additional support is also being made available through a rising number of Indigenous-led investment funds such as Raven Indigenous Capital Partners and Longhouse Capital Partners. Together, these initiatives are enabling more Indigenous groups to access capital, acquire equity, and secure larger ownership stakes in major projects.
Building Genuine Partnerships
For both domestic and international investors, long-term success in Canada’s energy sector increasingly depends on forming genuine, trust-based partnerships with Indigenous communities. Best practices include, but are not limited to:
- T=Taking time to understand Indigenous communities, including their aspirations, governance systems, and political requirements;
- Seeking tax advice early in the structuring process;
- Designing governance frameworks that support both financeability and long-term value; and
- Incorporating anti-dilution protections and resale restrictions aligned with future capital needs and, where applicable, mandatory Indigenous ownership requirements.
The Building Canada Act presents new opportunities, but its potential will only be realized through implementation that respects Indigenous rights and reflects the unique steps involved in Indigenous equity participation.
- For more information or discuss a particular matter, please contact us (Fasken): https://ow.ly/9yUS50XynLs
- The original posting by Fasken: https://ow.ly/85IB50XynP0
(Posted here 26 November 2025)
