Good morning. U.S. tariffs have sharpened debate over who controls development in Canada and how prosperity is shared, even as a growing share of major projects is being shaped by Indigenous-led organizations across the country. That’s in focus today, along with a closer look at the economics of Canada’s immigration clampdown.
Up first
In the news
Tariffs: U.S. President Donald Trump’s erratic trade policy has put a chill on Canadian business investment and consumer spending, but fewer Canadians expect tariffs to tank the economy.
Deals: Adastra Group, an IT consultancy co-headquartered in Toronto and Prague, is selling a majority stake to American private equity firm Carlyle Group Inc., bringing in outside capital for the first time in 25 years as it pushes more into artificial intelligence services.
Tech: Britain and ChatGPT maker OpenAI have signed a new partnership to deepen collaboration on AI security research and to explore investing in the country’s AI infrastructure.
On our radar
- Northrop Grumman, which announced in May that it has teamed up with Ontario-based Diamond Aviation on a new intelligence-gathering aircraft project, has raised its annual profit forecast on sustained demand for its defence systems. F-35 maker Lockheed Martin also reports before markets open.
- Earnings also include Canadian National Railway and General Motors.
- Fed chief Jerome Powell kicks off a conference on the regulation of big banks this morning. Markets still don’t know what to make of Trump vs. the constitution.
Flowing River Capital founders Eric Clark, Thomas Benjoe, Cadmus Delorme and Tyler Willox pictured last week at their Regina offices.Heywood Yu/The Globe and Mail
In focus
A future built by First Nations business leaders
First Nations leaders and premiers met yesterday to discuss land rights as pressure builds on getting shovels in the ground on so-called megaprojects. Two major pieces of legislation aimed at speeding up approvals, meanwhile, are being challenged in court.
Running beneath those tensions is a rapidly expanding network of Indigenous-led organizations providing communities with the financing, governance tools, and investment training needed to secure long-term ownership in projects already reshaping the country.
More than 110 First Nations communities across Canada either obtained or announced an equity interest in a major infrastructure project between the start of 2022 and April 2024, according to a report from law firm Fasken Martineau DuMoulin LLP.
Here’s a snapshot of how a growing number of organizations are cementing a foundation for Indigenous-led funding and development – opening doors to opportunities both large and small, from major infrastructure investments to mid-market business acquisitions.
The projects
We’ll start with the Stonlasec8 Indigenous Alliance Limited Partnership, which recently announced it bought a minority stake in Enbridge Inc.’s British Columbia natural gas pipeline network.
- Why it matters: The consortium of 36 First Nations secured $400-million in federal loan guarantees as part of the transaction.
- The group became the first to access the Indigenous Loan Guarantee Program, which was set up by Ottawa last year to ease access to equity stakes in major industrial projects.
- In March, Carney doubled the amount of loan guarantees available to Indigenous communities under the program to $10-billion.
- The Enbridge deal is part of a growing wave of First Nations–led investments in energy infrastructure – including the $6-billion Cedar LNG project, which is majority-owned and majority-funded by the Haisla Nation in partnership with Pembina Pipeline.
- Indigenous-led companies have secured increasing equity in pipelines, power infrastructure and natural resource developments across the country in recent years.
The advisers
Flowing River Capital, an Indigenous-led company that announced its formal launch last week, is aiming to help communities invest some of the roughly $12-billion stemming from land-claims settlements between First Nations and the Government of Canada over the past decade.
- Why it matters: The partners are building financial know-how to acquire and manage interests in companies across various sectors while preparing communities to reinvest in their own social needs.
- Flowing River hopes to expand its educational offerings while bolstering economic development among First Nations and Métis peoples.
- “The economic horse pulls the social cart,“ company chairman Cadmus Delorme said.
The bankroll
» The First Nations Finance Authority (FNFA) operates like a provincial borrowing agency, issuing debentures to fund infrastructure projects for Indigenous communities across Canada.
- Why it matters: Since 2014, it has raised more than $3-billion through 11 increasingly large offerings, attracting global investors and earning AA credit ratings comparable to Ontario government bonds.
- Its pooled borrowing model – unique in the world for Indigenous governments – has drawn interest from countries like Australia and New Zealand. The funds support long-term loans with competitive interest rates, helping communities overcome structural barriers under the Indian Act.
» The First Nations Bank of Canada, established in 1996, is a chartered bank that is majority-owned and operated by Indigenous shareholders.
- Why it matters: Along with the Business Development Bank of Canada, the two groups announced last month that they are making $100-million in financing available for Indigenous communities and economic development agencies seeking to acquire businesses.
With reports from Jeffrey Jones and Jameson Berkow
Charted
The population isn’t the problem
It’s that we have too little capital, and too little incentive to make use it efficiently, Andrew Coyne writes. With meagre productivity gains and flat investment, the only thing Canada has going for it is labour supply. Rather, it was the only thing Canada had going for it.
Bookmarked
On our reading list
Health wealth An AI app is helping diabetics count carbs with photos of their food – and major health care insurers are buying in.
Wealth health: How a lockdown opportunity put mutual fund manager Fidelity on the growth fast track.
Into the ether: Crypto-linked stocks are rising after Trump’s stablecoin law signing.
Morning update
Global markets were mostly lower on mixed corporate earnings, while investors took stock of tariff negotiations between the U.S. and its trading partners. Wall Street futures edged down while TSX futures followed sentiment lower.
Overseas, the pan-European STOXX 600 was down 0.4 per cent in morning trading. Britain’s FTSE 100 edged up 0.02 per cent, Germany’s DAX declined 0.85 per cent and France’s CAC 40 gave back 0.53 per cent.
In Asia, Japan’s Nikkei closed 0.11 per cent lower, while Hong Kong’s Hang Seng gained 0.54 per cent.
The Canadian dollar traded at 73.09 U.S. cents.