Morningstar: Indigenous Project Financing Shows Steady Growth

Canada is on the verge of a notable expansion in Indigenous-related project financing, according to international credit rating agency Morningstar DBRS. In a report released on the fourth National Day for Truth and Reconciliation, the agency says capital markets activity involving Indigenous organizations has been steadily increasing and holds “considerable potential” for further growth.

The Morningstar DBRS report highlights a clear trend: Indigenous communities and organizations are pursuing greater participation in equity ownership of major projects and infrastructure. This shift reflects a growing strategy among Indigenous groups to secure long-term revenue streams, strengthen local economies and increase control over land and resource development.

Better access to capital is facilitating economic development

Historically, one of the largest obstacles to Indigenous equity participation has been limited access to conventional capital. Under the Indian Act, many First Nations are unable to use reserve lands as collateral, which has restricted their ability to obtain competitive financing through mainstream lenders. This structural barrier has long constrained Indigenous communities from fully engaging in project ownership and other capital-intensive opportunities.

Morningstar DBRS notes that federal and provincial governments are increasingly recognizing the importance of addressing this financing gap. A range of government-backed programs, including loan guarantees and other forms of credit support, are being made available to help Indigenous partners participate more fully in capital markets. The report identifies more than $13 billion in federal and provincial programs designed to support Indigenous financing activity, and highlights that these mechanisms are already spurring increased lending and investment.

“Significant growth potential” for financing activity

According to Morningstar, Indigenous-related financing activity — when measured together with government loan guarantees — has averaged close to $800 million annually over the past five years. That baseline suggests a growing, sustainable segment within Canada’s capital markets that could expand substantially as more guarantees and support programs come online.

The agency also points to a pipeline of high-profile transactions that could accelerate this trend. Notable examples include proposed Indigenous acquisitions or consortium purchases tied to major energy and infrastructure projects, such as the planned transfer of the Trans Mountain pipeline to Indigenous groups, the potential sale of TC Energy Corp.’s NGTL pipeline system to an Indigenous consortium, and the joint development of the Cedar LNG project led by the Haisla Nation in partnership with Pembina Pipeline Corp. These prospective deals illustrate the increasing role Indigenous partners are playing in large-scale infrastructure and resource projects.

Morningstar emphasizes that increased Indigenous participation in capital markets is beneficial on multiple fronts. For Indigenous communities, it can mean more local jobs, sustained revenue, and greater control over development decisions. For project proponents and investors, Indigenous partners can provide long-term stability, local expertise and enhanced social license, which can reduce project risk and improve outcomes.

At the same time, Morningstar cautions that continued progress depends on consistent, predictable policy support and further expansion of financing tools tailored to the needs and legal realities of Indigenous communities. Loan guarantees, targeted credit facilities and capacity-building investments will be important components to help bridge remaining gaps in access to capital.

Overall, the report frames the current moment as an opportunity: with supportive federal and provincial measures already in place and several major transactions on the horizon, Indigenous-related financing in Canada appears positioned for meaningful growth. That growth could contribute to broader economic reconciliation by creating pathways for Indigenous ownership, participation and benefit from the country’s resource and infrastructure development.

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