CANADA Trends and Developments Contributed by: Mahdi Shams, Kevin Sorochan, Joshua Krane and Scott Masson, MLT Aikins
ventures and marketing alliances to source deals and deliver combined debt solutions. In energy and infrastructure, funding is staged against dated events. Typical triggers include permit issuance, interconnection, defined Indigenous consultation milestones and executed offtake or supply contracts. If a milestone is missed, credit facilities restrict discre- tionary spending or sweep excess cash to repayment until the issue is cured. This approach aligns capital deployment with execution risk and sustains projects through longer approval cycles. Recent national security amendments and broader screening practices further increase the value of com- mitted capital that can remain in place while approvals progress. As these regimes take hold, private credit is likely to account for a larger share of Canadian financ- ings because it delivers certainty, staged draws, and clear accountability for conditions that matter to clos- ing. Equity financing For publicly traded enterprises, the first months of 2025 saw a reduced availability of financing deal flow which affected companies of all sizes. While many issuers held off on securing additional public capital during this period due to the relatively low demand for equity financing, those that needed to secure such financing saw less favourable deal terms or compara- tively disappointing returns. Financing demand and supply has largely rebounded in the latter half of 2025 Co-investment has moved from optional to stand- ard on larger transactions. Federal policy is steering pension funds and insurers toward domestic assets through incentives and process clarity rather than quotas. On 7 March 2025, Transport Canada issued a policy statement that expands the tools airport authorities can use to attract private investment and signals openness to longer lease horizons, as well as the use of the MPO to co-ordinate approvals on nationally significant projects. The objective is to reduce approval risk and provide investable pipelines for long-duration capital. and is expected to continue into 2026. Co-investment by domestic institutions
These signals are shaping syndicate design. Sponsors reserve larger Canadian sleeves in equity syndicates and set staged equity calls against dated milestones such as permit issuance, grid interconnection and commercial operations. This approach reduces syn- dication risk, matches investment duration to asset life and embeds regulatory undertakings into shareholder and financing documents, which institutional investors require. Commentary across 2025 emphasises that the government’s emphasis on incentives, co-invest- ment programmes and targeted process reforms is meant to “unlock” more Canadian patient capital for infrastructure and energy without imposing allocation mandates. Canada Growth Fund (the “Fund”) After a slower ramp-up, the Fund has shifted from policy signal to execution by anchoring priority pro- jects. By late 2025, new commitments in 2025 alone exceeded the cumulative total from launch through 2024, confirming a marked acceleration in deploy- ment. In October 2025, the Fund announced an investment of up to CAD2 billion to finance the Small Modular Reactors project to be constructed at the Darlington New Nuclear Project which will be major- ity owned and operated by Ontario Power Generation Inc. The project carries a risk profile that traditional financing would not support, yet its expected impact is significant, with the creation of up to 18,000 Cana- dian jobs annually during construction and an estimat- ed CAD38.5 billion added to the GDP over 65 years. The transaction illustrates how public risk sharing can unlock private and Indigenous investment in energy and infrastructure during a period of uncertainty. The Fund makes cash flows more predictable through tools like carbon price backstops, which helps lend- ers fund at better levels. It also acts as a credible anchor investor that closes financing gaps and sig- nals policy support that draws in pensions, insurers and private credit, producing larger equity syndicates and firm debt commitments. Its support fits cleanly with milestone-based funding, so deals keep moving while reviews run. Combined with the MPO, the Fund reduces timetable risk and lowers the overall cost of capital for projects that matter to Canada.
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