Alberta already has its own loan guarantee program, and on Monday it announced the program’s expansion to C$3 billion ($2.2 billion) from C$1 billion due to its initial success. But the provincial minister overseeing it argued that putting fossil fuel restrictions on a federal program would be unfair to Indigenous communities in his region.
“A lot of the First Nations and Métis communities, that’s all they have is oil and gas, that’s how they make their living,” said Rick Wilson, Alberta’s minister of Indigenous relations.
He added that First Nations know their own environmental issues with resource projects better than anyone else. “They’re not going to do something that’s going to put their land and water at risk,” he said.
Wilson also argued that putting restrictions on oil and gas projects would unfairly limit the federal program’s applicability in Alberta and other western provinces, which are home to the bulk of Canada’s fossil fuel production.
It is not yet clear how quickly a federal program could be announced, though people familiar with the discussions told Bloomberg it’s very close to being done.
The major debate is whether projects that could hamper Canada’s efforts to reach its climate targets should be eligible for loan guarantees. The federal government expects demand to quickly exceed available funding, and does not want clean energy projects to be crowded out by fossil fuel projects, said people familiar with the discussions who asked to remain anonymous.
Some federal officials also don’t want to back loans for projects that could become stranded assets as the world decarbonizes and moves toward cleaner energy.
While other provinces have loan guarantee programs or are in the midst of setting them up, Alberta’s is currently the broadest in what it funds. The government says about C$500 million in loan guarantees have gone out so far toward infrastructure projects, and many more are in the application process.
That includes a C$250-million loan guarantee for an Indigenous ownership stake in a pipeline network in the northern Alberta region of Athabasca and a C$93-million loan guarantee for the Cascade Power Project, a large natural gas power plant west of Edmonton.
Wilson said there are about 100 more applications being vetted for approval, including some “big renewable projects” that he didn’t want to name yet. He called the program a major success not only economically, but also for the government’s efforts toward reconciliation with Indigenous people.
Despite his concerns about which projects might be excluded from the federal program, Wilson said he’s still very happy to see the Trudeau government coming to the table, which will greatly add capacity to the equity Indigenous groups can access.
“That’s why we had to do it, because they weren’t stepping up,” he said. “So now that they are getting in the game, that’s good. We can work with them.”
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