Carney's Energy Ambitions Risk Conflict Over First Nations Rights

Canada is placing heavy bets on its plentiful natural resources being the key to greater economic independence and prosperity. From an oil pipeline to British Columbia (B.C.) and support for Alberta's oil industry to a proposed pipeline running from Alberta to Ontario to provide as much as 500,000 barrels of oil a day for domestic use, Prime Minister Mark Carney is looking to Canada's energy resources to help navigate a course through global economic and geopolitical turmoil.

However, resource development in Canada is not straightforward, and fraught relationships between the federal government and the First Nations could hinder Carney's ambitions if major projects become mired in competing priorities and constitutional constraints. The federal government has a duty to consult First Nations under Section 35 of Canada's Constitution Act, 1982, regarding any conduct that could impact First Nations communities or treaty rights, including regulatory project approvals and authorization of permits.

Recently, the federal government has announced a number of projects, some of which support fossil fuel development and others that support sustainable energy in Indigenous communities. While some Indigenous communities will welcome the development opportunities, others are skeptical that such projects are indicative of a change of heart for the federal government in relation to its obligations to its Indigenous peoples.

Canada's Fossil-Fuel Future

On July 29, 2026, the federal government announced a deal that will see Canada's Ksi Lisims LNG provide 2 million tons per annum of liquefied natural gas (LNG) to Germany's Uniper SE for up to 20 years beginning in 2032.

Uniper's core markets are in Germany, the UK, Sweden, and the Netherlands. The deal represents another step in Canada's development of diversified markets for its LNG exports instead of relying on exports to the U.S. The government intends to evolve from shipping less than 0.01% of gas to non-U.S. markets in 2024 to at least 55% by the middle of 2030.

Ksi Lisims LNG is led by the Nisga'a First Nation. It will be Canada's second-largest LNG facility with the potential to provide 13% of Canada's natural gas exports by the mid-2030 and will operate with 94% fewer emissions than the global average when it comes online.

The government expects that the deal will produce thousands of jobs in B.C. and contribute as much as $15 billion to Canada's GDP.

“This agreement between Ksi Lisims LNG and Uniper represents more than an energy partnership,” said Minister of Energy and Natural Resources Tim Hodgson in the press release. “It is a powerful example of how, by working with allies like Germany, Canada can strengthen its economy and sovereignty and support global energy security.”

Fossil Fuels in One Hand, Sustainable Energy in the Other

On the same day it announced the LNG deal, the federal government announced $7 million in funding for clean energy projects in the Yukon, the Northwest Territories, and Nunavut to support sustainable energy and economic growth. The government said the funding will help First Nations, rural, and remote communities reduce their reliance on fossil fuels for heating and electricity, positioning it as a component of its forthcoming National Electricity Strategy to secure clean domestic energy for Canada. This will be a challenging task, since access to power generation infrastructure in the north is often difficult, with utility rates in the region being between 6 and 10 times higher than the national average.

“By working in partnership with territorial and Indigenous governments, we are creating the conditions for long-term economic growth, greater resilience, and new opportunities for northern communities while advancing our path to a low-carbon future,” said Minister of Environment, Climate Change, and Nature Julie Dabrusin in a press release.

On July 30, 2026, the federal government announced $10.9 million for 22 infrastructure and education projects for electric vehicles (EVs), including almost $9 million to install approximately 400 EV chargers through the Zero Emission Vehicle Infrastructure Program and nearly $2 million to support 13 projects dedicated to raising awareness of the benefits of electric vehicles along with guidance for property managers, condo boards, and landlords with tenants who are interested in EVs.

“Driving electric can save a Canadian household between $23,000 and $32,000 over 10 years, but for the nearly one in three Canadian families who live in condominiums, stratas, and apartments, those savings can be out of reach,” said President and Chief Executive Officer of the Canadian Charging Infrastructure Council Travis Allan in a press release. “This guide will give them clear, practical answers, and help ensure the benefits of low-cost electric driving reach every Canadian, not just those with a driveway.”

On August 5, 2026, the Federal Economic Development Agency for Northern Ontario (FedNor) announced more than $1.1 million in funding for the First Nation of Bingwi Neyaashi Anishinaabek near Thunder Bay in northern Ontario. The Indigenous-led project will support the installation of a district biomass heating system using wood residue from the local sawmill, which will create a reliable heat source that supports a resilient circular economy and reduces greenhouse gas (GHG) emissions.

“The people of Bingwi Neyaashi Anishinaabek are dedicated to fostering a strong cultural identity, to protecting Mother Earth, and to providing opportunities to all,” said Bingwi Neyaashi Anishinaabek Chief Paul Gladu. “That is why we are driving a cleaner, brighter future through renewable energy initiatives. Our partnership with FedNor is helping to make that possible. In addition to reducing environmental impact, this initiative will stimulate local employment and long-term financial returns for our community and beyond.”

Carney Facing Challenges on Multiple Fronts

Despite these investments, some Indigenous leaders from the First Nations have stated their firm opposition to any major projects that infringe on environmental protections or Indigenous land rights.

“Many First Nations across this country support economic growth and prosperity for all - but not at the expense of our rights and the government's legal obligations to our people,” said Assembly of First Nations (AFN) National Chief Cindy Woodhouse Nepinak in a July 22, 2026 press release after the AFN General Assembly in July.

In an interview with the Aboriginal Peoples Television Network (APTN), University of Saskatchewan Professor Emeritus Ken Coates said that Carney's approach to Indigenous consultation is more talk than substance, and that as a result, Carney's credibility with Indigenous communities is weak.

“He's said all the right things, but he hasn't really done the right things yet,” said Coates. “My sense is that Indigenous folks are getting more upset because he keeps saying we're going to build highways, mines, and big projects like electrical hydro dams, and folk are asking 'where's the consultation?' Not consultation for consultation's sake, but because this is happening on their territories.”

Coates also noted that the government has perhaps inadvertently set the stage not only for First Nations to oppose projects on which they haven't been consulted, but for First Nations to take the blame for projects that don't proceed.

“The prime minister has set Indigenous groups up to be the fall guy,” said Coates. “If projects don't go ahead, it's going to be their fault, and that's not true. There was lots of opportunity to consult with First Nations on the major projects before they went ahead, but he's always taken this approach of saying, 'We will consult with you, just not yet.'”

The language in which the government framed its recent Bingwi Neyaashi Anishinaabek announcement testifies to the tensions in its approach to Indigenous consultation. It began by highlighting political upheaval, upended global trade, and climate change before celebrating the government's commitment to supporting Indigenous communities in their resilience and self-determination regarding their development priorities.

At the same time, it's impossible to ignore all the ways in which federal and provincial governments have neglected their obligations to Canada's Indigenous peoples. According to government statistics, 39 Indigenous communities across Canada have long-term drinking water advisories, meaning they lack the infrastructure to produce clean water. Another 178 remote Indigenous communities are not connected to the electricity grid and frequently experience rolling blackouts because of energy shortages.

On July 29, 2026, the Pimicikamak Cree Nation in Manitoba announced a class-action lawsuit against the province of Manitoba, the federal government, and Manitoba Hydro for a 110-hour power outage from December 28, 2024, to January 2, 2025. Temperatures reached -40C, and the inability to heat homes meant water pipes burst, requiring the evacuation of almost 4,000 people. As of July 2026, 650 people still can't return home because of damage and mold resulting from water damage. The lawsuit alleges that there were no provisions for inspection or maintenance of the electrical infrastructure, and warnings from the community about the risks to the electrical systems had been ignored since 2018.

The federal government is even opposing the legal obligation to ensure safe drinking water on First Nations reserves, with the Department of Justice Canada attempting to overturn a court ruling on drinking water rights and the government revising language in the proposed First Nations Clean Water Act to weaken any implication that the government has a duty to provide clean drinking water to First Nations reserves.

As Coates suggested, if the federal government is truly committed to the values it claims to uphold, it needs to reconcile its aspirational rhetoric with what it actually does to realize them. The stakes will therefore be high for a planned first ministers' conference between the First Nations, provincial premiers, and the prime minister on October 26, 2026, at which the process for approving major projects will be a significant agenda item.

“Over $600 billion of projects are forecasted for First Nations lands over the next decade,” said Woodhouse Nepinak at the AFN Assembly. “But they won't advance without the support of First Nations chiefs from the entire Assembly of First Nations.”