Government of Canada Doubles Funding for Federal Indigenous Loan Guarantee Program

Written By David Bursey, Duncan McPherson, Luke Morrison, Ashley White and Samantha Chenatte

On March 21, 2025, Prime Minister Carney announced important changes to the federal Indigenous Loan Guarantee Program (Program). The Government of Canada doubled funding for the Program from C$5billion to C$10 billion and opened the Program to sectors outside of energy and natural resources. Prime Minister Carney noted this expansion "will ensure that rights-holders are a part of Canada's accelerated push to build."

The Program provides loan guarantees to Indigenous groups to participate in large projects located on their traditional territories. Interested Indigenous groups apply for loan guarantees by which the federal government commits to repay the applicable lender if the Indigenous group cannot fulfill their loan obligations. This loan guarantee lowers interest rates for Indigenous groups, increasing their access to capital and participation in large projects and promotes economic reconciliation for Indigenous groups across Canada.

Background

The Government of Canada introduced the Program in Budget 2023 and again in Budget 2024 (see our previous discussion of the Program along with snapshots of provincial loan guarantee programs/financing sources here). In December 2024, the Government launched the Canada Indigenous Loan Guarantee Corporation (Corporation) to facilitate the Program. The Corporation guarantees loans ranging from C$20 million to C$1 billion to Indigenous groups that qualify. The Corporation is a wholly-owned subsidiary of the Canada Development Investment Corporation, a federal Crown corporation that provides financial advisory services to the Government of Canada.

The Government launched the Program on February 21, 2025. It initially provided up to C$5 billion in loan guarantees to Indigenous communities. Funding was also limited to projects in the energy and natural resource sector. One month later, the Government announced changes to the program: funding increased from C$5 billion to C$10 billion, and the scope expanded to any industry sector.

Eligibility

To participate in the Program, an applicant must be an Indigenous group recognized as section 35 rights holders under the Constitution Act, 1982, or a wholly owned subsidiary of such a group. Any proposed project must directly affect the section 35 rights of the applicant.

For the program's first two years, Natural Resources Canada will oversee the assessment of applicants' section 35 eligibility. After this initial period, the Corporation may assume this responsibility.

Process

Indigenous groups may apply for loan guarantees on a rolling basis, with no fixed deadlines. Applications are reviewed as they are submitted. Priority will be given to current projects that are further along in their development and show clear potential for generating cash flow. However, applicants should contact the Corporation early in the process to discuss their project and receive guidance on preparing a strong application.

When an application is received, it is assessed for eligibility and screened to determine if further due diligence is required. If so, the Corporation conducts a detailed analysis of the program's financial and commercial viability, including its operational and Indigenous components.

Investment analysis and due diligence capacity support funding may be available to Indigenous groups that require additional assistance during the due diligence phase. Once the review is complete, a final decision is made on funding and, if approved, a guarantee agreement is negotiated between the Corporation and the Indigenous group.

The Corporation does not have any specified timelines for the application and approval processes, though it commits to ongoing communication with applicants through the process.

Bennett Jones has industry-leading experience in energy and infrastructure project development including in mining, oil and gas and CCUS, power, hydrogen and other clean technology, and developing strategies for Indigenous participation in major projects.

To discuss the potential opportunities and implications of the Program, please contact the authors, or the Bennett Jones Aboriginal Law, Energy, Mining or Energy Regulatory practice groups.

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