A $400-million federal loan guarantee enabling 36 First Nations to invest in Enbridge’s Westcoast gas pipeline is being hailed as a milestone in Indigenous economic reconciliation—but it’s also drawing criticism for supporting fossil fuel infrastructure amid a climate emergency and an accelerating energy transition.
For more than 65 years, Enbridge’s Westcoast pipeline has been pumping gas through First Nations territories across British Columbia, reports The Canadian Press. Now, three dozen of those communities will see long-term financial benefits from the 2,900-kilometre system that stretches from B.C.’s far northeast to the Canada-United States border.
“People often ask what economic reconciliation for Indigenous Peoples looks like,” said Chief David Jimmie, president and chair of Stonlasec8 Indigenous Alliance LP, which represents 36 B.C. First Nations. “This is it.”
The alliance is to invest $715 million for a 12.5% stake in the Westcoast system. The Canada Indigenous Loan Guarantee Corporation (CILGC) is providing the consortium a $400-million loan guarantee—the first such deal since Ottawa set up the program late last year.
“This is truly a transformational transaction,” said Elizabeth Wademan, president and CEO of Crown corporation Canada Development Investment Corp., which owns the Indigenous loan guarantee corporation. “It actually represents the largest loan guarantee that will be issued ever, as well as the largest number of Indigenous nations participating.”
But some observers warn that the returns may not pan out as planned. The milestone loan guarantee is “incredibly short-sighted” for propping up fossil fuel infrastructure in the midst of a climate crisis, Aly Hyder Ali, oil and gas program manager at Environmental Defence Canada, told The Energy Mix in an email.
Fossil fuel projects are incompatible with climate goals, and also likely to end up as stranded assets given the pace of the energy transition, he said, adding, “It’s deeply unfortunate that Indigenous partners are being sought for these projects.”
While Ottawa also offers various types of funding for Indigenous-led renewables—through initiatives like the Smart Renewables and Electrification Pathways Program—Indigenous groups had specifically endorsed a new loan guarantee program that would be sector-agnostic. That flexibility allows participation in both fossil and non-fossil projects. The CILGC provides loan guarantees—not direct funding—to Indigenous groups for large projects, enabling them to secure financing from private lenders at more favourable rates. These guarantees lower borrowing costs, making substantial equity investments more accessible to Indigenous communities.
But Ali questioned the wisdom of investing public credit in aging fossil fuel infrastructure. “While we fully support the goals of economic reconciliation, and we respect the rights of Indigenous advocates to argue for an agnostic approach, we remain opposed to the projects, and of the view that these will not yield the returns that have been promised.”
In March, the federal loan program was doubled to $10 billion and opened up to investments in all sectors. It had been initially set up to serve energy and other natural resource projects, the Canadian Press writes.
Enbridge has signed several deals with First Nations—for various types of energy projects.
Last year, Enbridge and Six Nations Energy Development LP announced plans to develop a massive wind energy project in southeast Saskatchewan. The Seven Stars Energy Project, located near Weyburn, is slated to produce 200 megawatts of clean electricity, enough to fuel more than 100,000 homes for a year.
In 2022, a consortium of 23 First Nations and Métis communities agreed to acquire an 11.57% stake in seven of Enbridge’s pipelines in the Athabasca oilsands region of northeastern Alberta for $1.12 billion. A provincial Crown corporation, the Alberta Indigenous Opportunities Corp., provided a $250-million loan guarantee.
“We have this history that we’re able to build on and we continue to look at opportunities for Enbridge to advance Indigenous partnership investments across our systems,” said Cynthia Hansen, Enbridge’s president of gas transmission and midstream.
Stonlasec8 president Jimmie, who is also chief of Squiala First Nation near Chilliwack B.C., said Indigenous support is “absolutely critical” for major energy projects to go ahead.
“I think (Enbridge) recognizes this and they recognize that without Indigenous participation, you’re going to find it more difficult to approach these types of projects,” he said.
Jimmie said the returns from Westcoast are to be distributed equally among the consortium partners, and each is to decide how they’ll be invested.
“But we all face similar challenges with infrastructure needs, housing needs, how we allocate for additional support for elders, support for youth,” he said.
“We look at everything that builds the community and how we can help support members in our communities and also help to advance economic development opportunities.”
Energy projects have long benefited corporations and provincial and federal governments, but now First Nations are able to reap some of the benefits, Jimmie said. “The nations have never been a part of that decisions were made 65 years ago in a different world where participation wasn’t necessarily even contemplated.”
Enbridge CEO Greg Ebel was among the signatories to an open letter to Prime Minister Mark Carney shortly after the Liberals won last month’s federal election. In it, energy sector leaders outlined what they believe needs to be done for Canada to strengthen its economic sovereignty in the face of U.S. trade turmoil.
Among the industry’s asks was that Ottawa help Indigenous co-investment in energy infrastructure. The executives wrote that the doubling in the loan guarantee program was aligned with that recommendation, but that Canada needs to foster a competitive investment environment to ensure such programs are effective.
“We do need regulatory reforms, we need clarity, we need to be able to ensure that we have transparency in that process and speed in that process,” Hansen said.
This report by The Canadian Press was first published May 15, 2025, with files added by The Energy Mix on May 21.
