44th Parl. 1st Sess.
May 1, 2023
- 03:49:24 p.m.
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Thank you, Chair.
My name is Ernie Daniels and I am the president and CEO of the First Nations Finance Authority. I am a member of the Salt River First Nation in the Northwest Territories.
I'd like to thank Leane Walsh and her team at CIRNAC, the First Nations Tax Commission and the First Nations Fiscal Management Board for working collaboratively on these amendments to the First Nations Fiscal Management Act, or FMA, over the last several years.
The First Nations Finance Authority, or FNFA, is a non-profit organization whose mandate is to provide financing, investment and advisory services to those first nation governments across Canada that voluntarily schedule to the FMA.
The FNFA board is elected annually from the member first nations. The FMA received royal assent in 2005 with all-party support, and the FNFA has been providing services to first nations governments across Canada ever since.
To date, 342 first nations have been scheduled to the FMA, and FNFA has loaned over $1.8 billion in financing to its membership of 151 first nations through nine provinces and the Northwest Territories. This has resulted in the creation of over 20,000 jobs and an economic output of $4 billion, which demonstrates that we are stronger together.
However, certain economic and social needs of our member communities can only be met through amendments to our act.
The FNFA strongly supports Bill C-45 in principle. It brings significant positive change that will lead to enhanced opportunities for first nations and indigenous governments across Canada. For example, the financing secured by other revenues regulations will be incorporated directly into the FMA. Bringing the provisions about other revenues directly into the FMA will result in a comprehensive FMA that is much easier to follow.
Another example is that the definition of “borrowing member” is expanded in anticipation of eligibility being expanded to indigenous governments and non-profit organizations through other regulations that will still be required. These important entities provide essential economic and social services to first nations.
The proposed amendments will have significant positive impacts for first nations.
Thank you and mahsi cho for your time and consideration.
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- 03:54:01 p.m.
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Thank you for that question, Mr. Vidal.
We really believe that the monetization of government transfers, be it a new source of funding or an existing source of funding, will really be a big game-changer when it comes to closing this infrastructure gap. I actually became aware of a report that was done just recently by AFN and CIRNAC together that indicated this infrastructure gap is at $349.2 billion. That's a staggering number. There's no way this government, which is funding infrastructure right now, will be able to do that in the next few years without an innovative solution. I really believe that the concept of leveraging means we can build more today than tomorrow with tomorrow's inflated dollars. Inflation does really eat away at funding amounts that are static.
In the recent budget we requested a budget ask of $200 million to start the monetization project, and $200 million annually over a 20-year period would create in excess of 12,000 homes, for sure. That makes a big difference on our reserves. Also, on replacing diesel generators, the idea of monetizing existing expenditures on diesel would almost be cost-neutral to replacing the diesel generators that exist in our communities right now.
Those are a few examples. We didn't get the budget ask. We will continue to do that. I'm sure at some point in time that monetization will happen, but I just don't know when. The concept is sound. It works. Every other government does that.
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- 03:57:23 p.m.
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Yes, I would agree with that. The concept of time and money is that it only goes one way. The value of your dollar goes down every single year.
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- 03:57:50 p.m.
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The challenge is that the social problems still exist. Overcrowding in homes creates a multitude of problems. The social problems are still there and will still continue. The population growth in our communities is growing faster than the Canadian average, so that problem is not going to go away. We need better air ventilation in our schools for our schoolkids. We need proper water, more water, rather than all the boil advisory notices we get every year. It's those types of issues that will be dealt with. It will create employment. It will create an economic impact that I strongly believe Canada as a whole will benefit from, not only the first nations.
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- 03:59:42 p.m.
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Thank you for that question. It's a really good question.
I think it fits, because all the amendments that are part of Bill C-45 have a direct impact on first nations communities, especially services to communities. We would hope that infrastructure, especially with the First Nations Infrastructure Institute coming on, will help communities to plan and build the proper infrastructure they need and with the costs associated with that. That definitely will be a benefit, for sure. The more infrastructure we can get into our communities, like health services and health and community centres, those things will benefit our communities.
In terms of reconciliation, I think it's empowering our communities to do things on their own terms and on their own time. I believe that's the whole benefit of the FNFA. It's a voluntary process as well. I strongly believe that when first nations are in control of when they do their assets, when they do their economic development and when they choose to do certain things, such as developing a property tax system, all those things are, to me, true reconciliation.
Thank you.
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- 04:02:13 p.m.
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That's a good question again.
There was availability in part of the existing legislation to develop a regulation for self-governing first nations. This work is actually going on right now. I think we're getting closer to having that completed. That regulation, I believe, is in section 141. It's really close to being finalized.
The other thing, especially for the Northwest Territories, is that these sets of amendments right now actually are looking at expanding eligibility. This would be for not-for-profit organizations that are providing services to first nations. Up in the Northwest Territories, we do have a few not-for-profit development corporations that are doing economic work in our communities. I could see that the amendments and the regulations that would need to be done shortly afterwards would do that.
As it exists right now, a number of communities in the Northwest Territories have actually expressed interest in the act and the work we do under the act. As a matter of fact, this morning I have an invitation to go and speak in the Northwest Territories about how more communities in the Northwest Territories and more first nation bands can get involved in becoming part of this work under the FMA and actually end up financing different projects.
I think there is a benefit. It's happening slowly. Hopefully, these sets of amendments will lead to more involvement and more economic activity from the first nations in the Northwest Territories.
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- 04:04:52 p.m.
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That's a good question. Believe it or not, in this day and age, with this legislation getting royal assent in 2005, there are still some first nations that are not aware of what we do under the act. Other than that, there are first nations that feel they don't have the revenues or the wherewithal to join this act. Once they find out, and once they see that other similar first nations have actually gone in and have actually borrowed, the interest happens. A few of them, some nations, like to work on their own. Some are just learning about it, and some are actually seeing the benefits of joining and want to join now.
It's going to take some time. We have 342 scheduled to the act, which is a high number. It's really a good number in itself. If you grouped 342 municipalities together to take advantage of an act like this, they would gladly do so.
I think we would like to see more first nations join, of course, but from my knowledge, from what I hear, those are some of the reasons why.
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- 04:07:49 p.m.
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I believe there will be an opportunity to open up more to other indigenous groups, such as Inuit and Métis. I think that's the next logical step in this. Right now, I do believe that getting the not-for-profit organizations that are providing services to communities will definitely be beneficial. For example, in B.C., the First Nations Health Authority would like to undertake an infrastructure program. They may be already doing that, but there's a need for health centres all across the province. I can see that being the same for other provinces in the country as well.
In some cases, another possible group that could access, or be eligible later on, would be first nations collaborating together on a single project, operating from a not-for-profit basis, of course. I'd like to see that myself. I think that the first nation groups were the first groups that actually started working on legislation like this. It started in B.C., and Harold or Manny could probably answer that a bit better than I can because I came in later. I came in in 2011, and they were there from the start.
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- 04:10:07 p.m.
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That's very good question again. I think that when we start amendments, it takes a lot of time and effort to get things moving forward.
We would like to see the eligibility expanded to Inuit and Métis, but we have to work with our counterparts at the federal government, which is CIRNAC in this case. Sometimes amendments go forward that they want to support. Also, they could have reasons why we're not working on Métis and Inuit right now.
Like I say, I am positive that will be forthcoming. I'm sure about that.
I will leave my comments at that.
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- 04:12:21 p.m.
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Thank you for that question.
First of all, the act is a voluntary act. Those organizations would request to work under the act.
With regard to competition or more lending groups, I would imagine you're talking about sharing the pie. I always go back to letting the choice be with the first nations or the entity that's borrowing to see what type of financing would be most suitable for them. I think there is a lot to go around.
With first nations, we mentioned a $349.2-billion infrastructure gap. I can imagine that gap is pretty big for Inuit and Métis as well. I was at a conference a few weeks ago, and I heard that the Inuit infrastructure gap is about $60 billion.
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- 04:41:33 p.m.
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- 04:49:54 p.m.
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The legislation itself is meant to work around the Indian Act in particular.
For me, that's really key because it allows the first nation.... Mr. Zimmer mentioned that it puts you in the driver's seat. I think that's the really empowering thing about the act and the amendments that are going forward. It does put that decision-making in the first nations' hands so that they determine when they are going to do things on their own time as long as they have the revenues to support these kinds of things.
Revenue sharing has to be another part of the equation from the federal government that needs to be discussed at some point in time. I think that's really important.
Thank you.
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- 04:56:06 p.m.
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I could give you an example. It was finding a way to get seven communities together to invest into one of the major projects and one of the major organizations in North America, which was Clearwater seafood. Having the capital and having the ability for the institutions to work together so that would allow seven communities to buy 50% of this major investment, I think, is a true success.
It is economic development, as well as really helping the communities be in a better position of managing wealth rather than managing poverty.
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- 04:57:56 p.m.
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I think this portion of the amendment will have a definite positive impact on tribal councils coming together to do economic ventures.
I think the flip side of it is that the FNFA has access to the capital markets where we can get really cost-effective financing, which really makes a difference when the communities are looking at economic development projects, in terms of making a profit. I think that's really key.
Based on the experience of working with the Clearwater example that I gave earlier, I think this allows us to work with a group of first nations together. Of course, we have to go through the regulation process to get that in place, as well as some of the standards that FMB will have to develop in terms of getting not-for-profits and tribal councils in.
I think it's going to be a major difference for these tribal councils as they look at and pursue economic activity.
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- 05:03:01 p.m.
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This is not part of the legislation, but this is an example of what the institutions can do. We're working on an insurance project, because, with climate change, all of those insurance costs are going up. They're going to go up all across the board right across all countries, all nations, everything. We're trying to find a more economical way to insure our assets, to insure our businesses and to insure our homes across our nation. That's one of the things that we're working on. I thought I would add that in.
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- 05:07:18 p.m.
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I think it's a process for a first nation to go through the different parts of the legislation as they work their way through the different institutions to do the different works they want to do. For the FNFA, of the 342 that have scheduled, we have 151 first nations that are borrowing members with us right now. If we had all the first nations joining all at once, it would be a matter of capacity to deal with all of these nations. That's one part of the answer.
The other one is that first nations want to know more sometimes. It takes some effort when you start to talk with a first nation and go through the process, because this is an entirely new way of doing business, if you will, in terms of trying to get, in our case, to the point of getting financing for a specific project. I must say that all the institutions here provide excellent service to the first nations that want to join, and even those that do not.
I know FMB does the 10-year grant process. First nations are getting used to it in most cases, and some are ready to jump into it. For those that will be coming, it will be a matter of time, because they will start to see the benefits the other first nations are enjoying right now.
Thank you.
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- 05:10:21 p.m.
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One of the things I've noticed during the latest work on amendments to the act is that the capacity on the federal government side really needs to be there. We have to make sure that it continues going forward. We're building up our capacity on our side, and we need to make sure that it's still there on the federal side. That capacity on the federal side is what I see.
I think also allowing us to start discussions on the different regulations for expanding to the different indigenous groups as well.... If we can start that work now, a longer runway is more beneficial than a shorter runway.
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- 05:13:24 p.m.
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Thank you for that question.
I'm very well aware of those communities and of the issues that they face.
I think with the regulations that are being developed, in regard to the not-for-profit organizations, if it's limited to first nations then we have a problem. However, I think there might be some openness to “indigenous” as a definition. If we can keep that in mind when we're working on the regulations that would really help. Other than that, we'll have to continue working to expand the definition to include Métis.
We can keep that in mind for the regulations, keeping it as “indigenous” rather than strictly “first nation”.
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- 05:21:04 p.m.
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Agreed here. We would like to see this fast-tracked, if that is possible. It allows us to get on with other things. We have to start looking at other amendments down the road as well, as was mentioned here today, so I think getting this done quickly would be really beneficial to all first nations.
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