In a conference call from India Nov. 11, where he is involved in a trade mission, Dhaliwal appeared to rule out a federal loan guarantee of C$70 million to assist aboriginal involvement in planning of the C$3 billion pipeline.

"As a government we do not provide loans or loan guarantees for the construction of pipelines, said Dhaliwal, echoing Canada's opposition to proposed U.S. government subsidies for an Alaska Highway project.

"This is not something we've done in the past. We don't have any intention to give loans to the (Mackenzie Valley) pipeline," he said.

But Dhaliwal left the door open to other options, saying "there are many ways of dealing with financing," insisting that the Aboriginal Pipeline Group, which represents most aboriginal communities along the pipeline route, will play an "important role" in any northern pipeline.

He said the Aboriginal Pipeline Group will work with newly appointed federal pipeline liaison, Roland Priddle, to "see how we can move that program forward."

Fred Carmichael, a prominent Northwest Territories business leader who was named chairman of the Aboriginal Pipeline Group last week, has held his first meetings this week with Priddle to explore the APG's request for C$70 million to help fund its share of preliminary design work by the Mackenzie Valley Producers Group, made up of Imperial Oil Ltd., Shell Canada Ltd., ConocoPhillips Inc. and ExxonMobil Canada.

Aboriginal leaders in the Northwest Territories have repeatedly said in recent months that unless their communities are full partners in the pipeline they are ready to derail the project as they did two decades ago.

Following his appointment, Carmichael said there is a "lot of work to do in a very short time frame to achieve significant aboriginal participation in the project."