Canada's Energy Minister has opened the door to federal financing for Alberta's proposed bitumen pipeline to the Pacific Coast—using a $10-billion Indigenous loan guarantee program originally designed to foster Indigenous economic participation in resource projects.
Minister Tim Hodgson told Parliament's natural resources committee Thursday that public money "could be used" to backstop Indigenous co-ownership in the pipeline venture, marking a significant shift in how Ottawa might finance the controversial project.
"So there could be scenarios where public money could be used in a pipeline where it was supporting Indigenous ownership of the pipeline," Hodgson said in response to questions from a Bloc Québécois MP.
The comments align with a memorandum of understanding signed between federal and Alberta governments last November. That agreement states the private sector would construct and operate the project, but explicitly allows federal dollars through the Indigenous Loan Guarantee Corporation to "help backstop Indigenous co-ownership."
A Loophole in Climate Commitments?
The move sits in murky legal territory. While Canada has committed to phasing out inefficient fossil fuel subsidies, federal guidelines carve out exceptions for projects that support Indigenous economic participation and self-determination. In theory, Hodgson's proposal stays within those rules.
But environmental advocates say the scheme violates the spirit of Ottawa's climate commitments. Julia Levin, national climate associate director at Environmental Defence, warned that taxpayer dollars should not flow to what she calls one of the world's wealthiest sectors.
"Canadians have been clear they don't want their tax dollars going to one of the wealthiest sectors on the planet. Prime Minister Mark Carney's government continues to undermine his own rules by funding projects that put our economy and current and future safety at risk."
Pipeline Route Remains Contested
The federal and Alberta governments are still negotiating the project's details. Reports suggest the Carney government is considering a Pacific Coast route that differs from the northern path preferred by Alberta Premier Danielle Smith. A deal on industrial carbon pricing is expected within two weeks, which could unlock pipeline negotiations.
The project would transport Alberta bitumen to West Coast ports for export, a goal long pursued by provincial leadership but consistently blocked by environmental concerns and Indigenous rights questions.
This article is based on reporting from CBC News and Parliament's natural resources committee proceedings.