It is time for a national strategy on Indigenous access to capital.
As a country, more work is needed to close the social and economic gaps between Indigenous and non-Indigenous people living in Canada. To do so, systemic changes are required to empower Indigenous communities to be self-sustaining through meaningful reconciliation, the ability to generate own-source revenue and equal access to opportunities that fulfill self-determination.
What is needed are innovative policy tools to enable Indigenous access to capital and capacity building for communities to fully participate in the economy as called for by the Truth and Reconciliation Commission Call to Action 92.
Without change, we will face prolonged economic uncertainty for Indigenous communities and more process uncertainty for private sector investment in our country. This means fewer jobs for Indigenous and non-Indigenous alike and, most importantly, a slower path to reconciliation.
It is also important to recognize that without Indigenous access to capital, we are forgoing opportunities as a country to meet our net-zero commitments, which require new clean energy projects, most of which would be built on Indigenous lands. These projects include mining critical minerals used in batteries or solar panels, LNG and hydrogen facilities, and other infrastructure supporting the global energy transition and emissions reduction plans while also fostering economic activity in remote communities around the province.
Today, the federal Indian Act limits ownership by First Nations of their lands, leaving them without the assets necessary against which they can borrow or raise capital, requiring alternative methods of accessing credit at prohibitive borrowing costs.
As outlined in a recent report co-authored by the First Nations Major Project Coalition and the Business Council of British Columbia, Canada can reduce project uncertainty and advance reconciliation by demonstrating free, prior and informed consent from Indigenous communities from the outset of a project by ensuring Indigenous communities become co-proponents or equity holders of major projects.
Governments, industry, and Indigenous leaders must collaborate to enable access to capital at competitive terms for Indigenous communities to effectively participate and determine ownership positions in projects and infrastructure that enable economic opportunities for all.
In our joint report, we offer three solutions.
The first is to establish a purpose-built Indigenous Infrastructure Bank that provides financing to qualifying projects. This entity would focus on the priorities and goals of Indigenous communities, incorporate Indigenous knowledge, and support Indigenous communities with loans at competitive interest rates for new infrastructure. An Indigenous Infrastructure Bank would also have the capacity to consider the unique challenges facing Indigenous communities, including remoteness, existing infrastructure gaps, and limiting policy or legislative frameworks.
Second, the government should create an Indigenous Loan Guarantee Program to support Indigenous equity or joint ownership purchases of major projects within or through their territories, such as linear infrastructure. Enabling Indigenous project ownership or co-ownership would provide sustainable, own-sourced revenue for those communities and benefit the individuals living there.
Finally, if we expect the meaningful economic participation foundational to meaningful reconciliation, Indigenous communities require the tools to engage with global businesses looking to invest in Canada. Indigenous communities need access to enhanced business capacity, and the right commercial supports to make informed business decisions and participate in designing and assessing projects within their territory.
The federal and provincial governments have an obligation to ensure this capacity support exists. These skills will also build individual Indigenous community members’ expertise and strengthen the communities’ corporate governance and decision-making processes. The result will be stronger deals based on community interests and capital market realities, reducing risks and maximizing the opportunity for all involved.
For Canada, inaction on these recommendations risks our overall investment climate and would exacerbate the stagnation of economic growth we would otherwise gain from unlocking new activity. For Indigenous communities, inaction means a continuation of the status quo, no increase in the standard of living and no advancement towards achieving self-determination.
We are committed to working together and in partnership with the federal and provincial governments to remove barriers and advance solutions for the benefit of Indigenous and non-Indigenous people across Canada.
As published in The Hill Times. Written in collaboration by Chief Sharleen Gale, Chief, Fort Nelson First Nation and Chair, First Nations Major Project Coalition, and Greg D'Avignon, President and CEO, Business Council of B.C.