Canada to give loan guarantees to Indigenous groups for energy projects

FILE PHOTO: The last section of pipeline is assembled on the Trans Mountain pipeline expansion project before operations are expected to begin in the second quarter of 2024, near Laidlaw, British Columbia, Canada, February 18, 2024. REUTERS/Chris Helgren/File Photo

OTTAWA, April 16 (Reuters) – Canada will provide up toC$5 billion ($3.6 billion) in loan guarantees to allow indigenous groups to invest in energy deals such as oil and gas projects, the Liberal government said in its annual budget on Tuesday.

The development in theory would result in major investment opportunities, from the government-owned Trans Mountain oil pipeline to TC Energy’s Coastal GasLink pipeline.

The Liberal government, which came to power in late 2015, has invested billions of dollars to improve the living conditions of Canada’s first nations who have higher levels of poverty and a lower life expectancy than other Canadians.

“The (loan) program would be sector agnostic for natural and energy projects to prioritize economic reconciliations,” said the budget document

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, say experts.

($1 = 1.3823 Canadian dollars)

(Reporting byDavid Ljunggren, editing by Denny Thomas)

((Reuters Ottawa bureau; [email protected]))

Keywords: CANADA BUDGET/INDIGENOUS