TC Energy Sells $1 Billion Pipeline Stake to Indigenous Consortium
Indigenous Communities Secure Economic Sovereignty with Historic $1 Billion Pipeline Stake Deal
Editorial Team (ET)May 15, 2025
TC Energy Corp., a leading pipeline company based in Calgary, has announced a groundbreaking deal to sell a minority stake in its Western Canadian natural gas transmission network to a consortium of Indigenous communities. This $1 billion transaction marks a significant step towards economic empowerment and equity ownership for Indigenous groups in Canada.
Background of TC Energy
TC Energy, formerly known as TransCanada Corporation, has a rich history in the energy sector, particularly in North America. The company operates a vast network of natural gas pipelines, including the Nova Gas transmission system and the Foothills pipeline assets. These assets span 25,000 kilometers and are critical components of Western Canada's natural gas infrastructure.
Details of the Deal
The deal involves the sale of a 5.34 percent stake in TC Energy’s Nova Gas transmission system and Foothills pipeline assets. The transaction, valued at a total enterprise value of $1.65 billion inclusive of debt, is backed by the Alberta Indigenous Opportunities Corp. (AIOC). This agreement will see 72 Indigenous communities across Alberta, British Columbia, and Saskatchewan become stakeholders in TC Energy’s extensive pipeline network.
Significance of the Deal
This transaction is notable for being Canada's largest-ever Indigenous equity ownership agreement. It represents a milestone in the journey towards economic sovereignty for Indigenous communities, offering them predictable and long-term cash flows from the pipeline revenues, which are underpinned by federally regulated rates.
Statements from Key Figures
François Poirier, president and CEO of TC Energy, highlighted the importance of Indigenous ownership in fostering a more prosperous nation. Chief Isaac Twinn, chair of the consortium committee and chief of the Sawridge First Nation, emphasized the long-term benefits for Indigenous investors, expressing optimism about the future impact of this partnership.
Indigenous Interest in Equity Ownership
Indigenous communities in Canada have increasingly shown interest in acquiring equity positions in major projects and infrastructure. This trend is seen as a way to generate revenue and create economic opportunities. For instance, in 2022, Enbridge Inc. finalized a $1.1-billion deal to sell a 11.57 percent stake in seven pipelines to 23 First Nation and Métis communities.
Role of the AIOC
The Alberta Indigenous Opportunities Corporation, established in 2019, plays a crucial role in facilitating these equity transactions by providing loan guarantees. For the TC Energy deal, the AIOC will offer a $1-billion equity loan guarantee, supporting the newly formed Indigenous-owned investment partnership. This support is instrumental in overcoming the financial barriers that Indigenous communities often face.
Government Support and Policies
The Canadian government has committed to reconciliation with Indigenous peoples, which includes recognizing their right to economic self-determination. The recent federal budget introduced a national Indigenous loan guarantee program aimed at helping communities access capital and participate in equity investments.
Economic Benefits for Indigenous Communities
The financial benefits for the Indigenous communities involved in this deal are substantial. They will receive steady revenue streams from the pipelines, enabling them to invest in future projects and achieve greater economic independence. This ownership also provides an opportunity to reinvest in their communities, creating jobs and supporting local development.
Challenges and Solutions
Historically, Indigenous communities have struggled to access the capital needed for major equity transactions. However, initiatives like the AIOC and supportive government policies are beginning to change this landscape. By providing loan guarantees and other financial support, these programs help Indigenous groups overcome these challenges and participate in significant economic opportunities.
Broader Implications for the Energy Sector
The energy sector in Western Canada stands to benefit from these partnerships. Gaining the support and consent of Indigenous communities is increasingly essential for the construction and operation of major projects. These agreements not only facilitate project approvals but also ensure smoother operations by fostering positive relationships with Indigenous stakeholders.
Reactions from Indigenous Leaders
Leaders from various Indigenous communities have expressed strong support for the deal. They see it as a transformative step towards economic empowerment and a model for future partnerships. The deal is expected to have a lasting positive impact, enhancing the economic prospects of their communities.
Future Prospects
Looking ahead, the success of this deal could pave the way for similar transactions in the future. There is a growing interest among Indigenous groups in Canada to pursue equity ownership in various sectors. This trend is likely to continue, fostering greater economic collaboration and mutual benefits for all parties involved.
Conclusion
The deal between TC Energy and the consortium of Indigenous communities represents a significant achievement in the pursuit of economic reconciliation and equity ownership. It highlights the potential for transformative partnerships that benefit both the energy sector and Indigenous communities. As this partnership progresses, it will undoubtedly serve as a model for future initiatives, driving economic growth and fostering a more inclusive and prosperous Canada.
