Finance deal struck help Indigenous communities build infrastructure

Today, the Canada Infra‐ structure Bank (CIB) and the First Nations Bank of Canada (FNBC) announced the signing of a $100-mil‐ lion deal to help Indige‐ nous communities borrow money to build infrastruc‐ ture.

For decades, Indigenous leaders and business experts have said limited access to affordable loans with flexible terms have held back impor‐ tant development projects in Indigenous communities across the country.

Both organizations say the financing deal means First Nations, Métis and Inuit communities will be able to get loans more quickly and easily for projects ranging from roads, to water and wastewater management, utility connections, as well as housing, commercial and in‐ dustrial developments.

The agreement was an‐ nounced at the annual con‐ ference of Aboriginal Finan‐ cial Officers Association of

Canada in Winnipeg, which is in Treaty 1 territory.

"If you need new broad‐ band, you need new roads you know, all the good things that you might need - energy infrastructure, we have a pro‐ gram that will allow you to do that," FNBC CEO and presi‐ dent Bill Lomax told the crowd at the conference.

He added that a key to this program was its flexible scale.

"Now, not just on the $100-million scale, but if you have a $5-million project or a $1-million project, we can now take care of that."

The CIB is providing $100 million for which Indigenous communities will be able to apply and access through the FNBC, which is managing the fund.

Depending on the project, FNBC will also provide matching or possibly even greater financing for elemen‐ ts not covered under CIB in‐ frastructure criteria.

So, for example, in a housing or commercial devel‐ opment, CIB funds can be used for things like water, roads, sewage or utilities, but FNBC financing would be available for houses or build‐ ings.

That could increase the total financing available to more than $200 million.

A federal Crown corpora‐ tion, the CIB was created in 2017 under Bill Morneau, the Liberal government's finance minister at the time. Its man‐ date is to attract private-sec‐ tor investment and use loans, loan guarantees and equity to get public infra‐ structure projects built.

The FNBC is an Indige‐ nous-owned bank with about 20 branches across the coun‐ try. It has about $650 million in loans with Indigenous communities.

Stephen Scott, CIB direc‐ tor of Indigenous infrastruc‐ ture, explained that the part‐ nership between the Crown corporation and the FNBC bridges a gap.

"Infrastructure projects are typically larger, in the hundreds of millions to bil‐ lions of dollars. And we have an organization that's set up to deliver on those level of in‐ frastructure projects. We don't have an organization that's well suited to some of the smaller projects."

The FNBC "has the scale, it has the people, it has the specialized understanding of the Indigenous market to de‐ liver on that a lot quicker than we can."

Lomax said loan rates from the FNBC will be "much lower than your typical market rates ... not quite zero, but we're getting close there."

He also said that by part‐ nering with the CIB, the FNBC can use its expertise in work‐ ing with Indigenous commu‐ nities and support new projects in a way it has not seen before.

Lomax said the FNBC could get behind projects other banks would reject be‐ cause its community knowl‐ edge could give it a deeper understanding of their real risks.