Ontario Embeds Indigenous Equity in New Hydro Procurement Process
Ontario’s new long lead time hydro procurement framework makes Indigenous equity participation a major competitive factor, offering bid price reductions of up to 10 per cent. The initiative targets 200 megawatts of new capacity by May 2035, supported by a $15-million IESO fund.
Ontario has introduced a new long lead time (LLT) hydro procurement process that significantly increases the role of Indigenous communities by embedding equity participation as a major competitive factor. Unlike previous models where Indigenous inclusion was optional or symbolic, the new framework allows bids to be effectively reduced by up to 10 per cent based on Indigenous participation scores.
Under the previous feed-in tariff (FIT) model, Indigenous inclusion was transactional and optional, offering extra cents per kilowatt-hour for bringing an Indigenous community along. The LLT framework shifts this approach by giving additional weight only to projects situated within the traditional territories or treaty lands of the Indigenous community holding equity.
The procurement is estimated to add 200 megawatts of new capacity, consisting mostly of small greenfield projects in Northern Ontario. Commercial operation for these projects is targeted for May 2035.
To support this transition, the Independent Electricity System Operator (IESO) operates an Indigenous Energy Support Program (IESP), a $15-million fund designed to support the assessment and development of opportunities for partnerships and participation in energy infrastructure projects. This funding aims to provide capital autonomy so Indigenous Nations can negotiate partnerships effectively.
Partnership agreements under the new framework allow an Indigenous partner to reduce, but not entirely remove, its ownership stake before the five-year mark, and once on its own volition any time during the project. Through these arrangements, Indigenous communities gain decision-making authority at the board table and intergenerational wealth through revenue streams. Projects built in partnership with Indigenous Nations are expected to encounter fewer conflicts, delays, and legal disputes.
Financial risk remains present for Indigenous Nations, requiring due diligence and potential financing through specific programs such as the Ontario Indigenous Opportunities Financing Program and the Canada Indigenous Loan Guarantee Corporation.