By all accounts, Canada is in its energy era. It’s certainly a sentiment shared by the Global Energy and Climate Group at Fasken Martineau DuMoulin LLP.
“We’re at an interesting place in the world at this present time,” says firm partner and group co-leader W. Ian Palm. “There’s a whole lot we can do domestically — with assets in Canada, smart people in Canada, and capital primarily based in Canada — to play a role in creating economic value for Canadians now and into the future.”
A collaborative, broad-based practice
Fasken’s energy and climate group is co-led collectively by three partners: Palm in Toronto, Chris Bystrom in Vancouver and Pierre-Olivier Charlebois in Montreal. Described by Palm as collaborative and broad-based, the group draws on deep bench strength across Fasken offices in each of Canada’s major business centres. More than 100 lawyers, including environmental, transactional, and regulatory, work together backed by the firm’s broader platform of more than 900 lawyers.
The group’s real point of distinction, in Palm’s view, is pairing energy with climate. This doesn’t mean the firm has stepped back from oil and gas or LNG work. Quite the opposite, it is forward-thinking enough to address rising interest in demand and the role Canada can play in exporting energy to global markets together with helping clients address the need for Canada to reduce carbon intensity to meet this demand.
“Not everybody combines the two like we do,” Palm says, adding clients increasingly expect help in meeting rising energy demand in a way that reflects Canada’s push to cut carbon emissions.
Because of strategic offices across the country as well as in London and Johannesburg, the group addresses the needs for regional differences. The Calgary office is very engaged on supporting local energy practices, whether it be pipeline companies on the litigation side or energy development businesses, while Vancouver is focused on hydro, renewables and LNG in particular, and the Quebec-based lawyers grasp the nuances and unique opportunities available to Quebec’s electricity market and regulatory landscape.
The four forces
The Fasken team identifies four factors at play that are having a significant impact on the energy sector. First are the global ambitions to significantly expand investment and export opportunities for Canadian businesses, including critical minerals which are essential to the country’s energy transition. The federal government, with the support of various provinces, is looking to double export markets outside of the U.S. over the next decade.
“One of the strengths Canada has been demonstrating as a country — and Fasken’s played an exciting part in that — is that a number of jurisdictions where we’re engaged are opening their eyes to the notion that Canada could be part of the solution in addressing energy needs globally,” Palm explains.
A second theme, longer running than the first, is growing electricity demand driven by electrification and decarbonization across a broad range of sectors. This trend began four or five years back, with most provinces indicating electricity demand will continue to increase materially. That was before the AI boom and the increasing demand accounting for data centres. In Ontario, for example, the IESO most recently expects demand to grow more than 75 per cent by 2050.
The net result, Palm says, raises complicated questions: how can new generation capacity and transmission facilities be developed and built in a short time frame? Where does the capital come from? How can government policies get implemented to advance all of this?
“It requires smart, engaged people who understand the energy sector, and we’re well positioned for that. It’s about focusing on it in a critical manner.”
Theme number three is the growing momentum associated with Indigenous reconciliation, with Fasken observing developments around how governments, the private sector, banking institutions, utilities, and other parts of the economy are addressing Indigenous equity. For example, the federal government doubled its Indigenous Loan Guarantee program to $10 billion from $5 billion.
Fasken worked on the first transaction to close under it: Enbridge spinning out its Westcoast pipeline system in B.C. into a separate limited partnership, in which almost 40 First Nations acquired a 12.5 per cent interest.
Though historically there’s been opposition to certain types of development from some First Nations, Métis and Inuit communities, “now there is more engagement,” Palm says.It's more than participation in impact benefit agreements. Indigenous communities are looking for a meaningful role and an economic interest in energy infrastructure on a go-forward basis.
“Any transmission lines, generation projects or other energy infrastructure that's going to be developed in Canada, whether it’s renewables, nuclear or oil and gas, there’s going to be an important Indigenous equity and community component to it,” he explains. “The strength in our indigenous, infrastructure and energy practices come together to support that. Frankly, these are fun transactions to be involved in. They can be complicated — there's a range of interests that you’re trying to manage and engage with. At the same time it is an opportunity to be creative and help stakeholders meet ambitious goals.”
The fourth and final force relates to climate change and innovation. Opportunities centre on sustainable finance and clean tech, with parts of the innovation economy interested in finding more ways to be part of the solution in meeting climate goals.
The consequences of that engagement are “some pretty interesting innovative businesses arising right across the country,” Palm notes, adding that Fasken has great strength across the board in emerging technology by bringing together its expertise in venture capital and private equity financing.
Other trends make the group’s radar as well, if with less fanfare. For example, new federal tax incentives that reward investment in renewable energy, nuclear and other carbon-reducing projects.
Palm also points to Natural Resources Canada’s first-ever Nuclear Energy Strategy, which frames nuclear power as both a domestic energy source and a significant export opportunity. Fasken is actively engaged in supporting larger nuclear projects, emerging small modular and micro modular reactor businesses, as well as fusion developers.
“We're trying to play a role in shining a light on some of these opportunities as a way to help these businesses grow, and also as a way for us to get smarter about how these opportunities may arise.”
Making the most of a rare period of time
In his 30 years of practising law in the energy sector, Palm sees this moment as the beginning of a new more confident energy era for Canada. The volatility of trade tensions with the U.S. and increased wildfire activity across various parts of Canada, along with the rise of international conflict, have juxtaposed serious challenges with incredible opportunity — and the ability for lawyers in the space to make a real difference.
Palm, who says the Fasken energy team is “passionate, with a purpose,” notes that strong energy infrastructure is essential to success, and that’s exactly what Fasken is contributing to.
“It’s a rare period of time. We’re seeing increased interest in the financial community, businesses and government eager to invest in energy and find practical solutions, and we as lawyers are eager to help facilitate that.”
This article was produced in partnership with Fasken Martineau DuMoulin LLP