The Indigenous Loan Guarantee Program: Advancing Economic Reconciliation Through Equity Ownership

The Government of Canada’s Indigenous Loan Guarantee Program (ILGP) represents a transformative federal initiative aimed at facilitating Indigenous participation in the Canadian economy through equity ownership in major projects. With an initial commitment of $5 billion—since expanded to $10 billion—the program seeks to address historic exclusions from economic development and foster substantive Indigenous economic reconciliation.

Legislative and Institutional Framework

Launched in 2024 and formally operational as of early 2025, the ILGP is administered through the Canada Indigenous Loan Guarantee Corporation (CILGC), a subsidiary of the Canada Development Investment Corporation (CDEV), a federal Crown corporation. CILGC is mandated to issue loan guarantees ranging from $20 million to $1 billion, enabling Indigenous groups to access commercial financing for equity stakes in large-scale projects.

The program is open to Indigenous groups with constitutionally protected rights under section 35 of the Constitution Act, 1982—including their wholly owned subsidiaries. Eligible projects must directly relate to or impact those rights, aligning with the Crown’s duty to consult and accommodate.

Policy Evolution and Program Expansion

Originally limited to projects in the natural resources and energy sectors, the ILGP was expanded in March 2025 to permit participation across all sectors of the economy. This policy shift ensures that rights-holders are a part of Canada’s accelerated push to build and marks a significant departure from prior federal financing models, which frequently excluded Indigenous equity participation due to structural barriers.

The expansion to a sector-agnostic model also responds to longstanding criticisms of systemic exclusion under the Indian Act, which limits First Nations’ ability to leverage reserve land or communal property as collateral. By offering a federal backstop, the ILGP enables financial institutions to offer Indigenous borrowers more favourable terms, effectively removing a key impediment to capital access.

Due Diligence and Program Mechanics

ILGP applications are reviewed on a rolling basis through a staged assessment. Initial eligibility is determined by Natural Resources Canada for the first two years, with CILGC assuming that role thereafter.

The due diligence process evaluates commercial viability, including project financing, cash flow, Indigenous ownership, and operational readiness. Capacity support funding is available for this phase, though not for feasibility or early-stage planning.

CILGC also enables coordination with provincial loan guarantee programs, allowing stacking up to 100% of equity acquisition costs. Up to 75% of total project costs may be supported through combined federal sources, including grants and Crown-backed financing.

Strengthening Outcomes Through Indigenous-Led Governance

As the ILGP moves forward, legal and policy commentators have underscored the importance of embedding Indigenous leadership in governance and oversight structures. Such an approach aligns with Canada’s obligations under the United Nations Declaration on the Rights of Indigenous Peoples Act and would strengthen trust in the program over the long term.

Continued focus on inclusive implementation will also be essential. Ensuring the program reflects the full diversity of Indigenous legal orders and realities will enhance its effectiveness and reach.

The first loan guarantee marks a major milestone for the ILGP—read more about how it supports Indigenous ownership in major projects through the Stonlasec8-Enbridge transaction: here.

Conclusion

The Indigenous Loan Guarantee Program is a meaningful step toward economic reconciliation, enabling Indigenous Nations to become equity partners in major Canadian projects. It offers a mechanism to materially engage Indigenous groups as equity stakeholders, not merely beneficiaries, in major Canadian infrastructure and development projects.

Boughton Law’s Indigenous Practice Group advises First Nations on equity participation, governance, and financing. If your Nation is exploring opportunities under the ILGP, we can help you navigate the process and protect your long-term interests.