Finance deal struck help Indigenous communities build infrastructure | CBC News

Today, the Canada Infrastructure Bank (CIB) and the First Nations Bank of Canada (FNBC) announced the signing of a $100-million deal to help Indigenous communities borrow money to build infrastructure.

For decades, Indigenous leaders and business experts have said limited access to affordable loans with flexible terms have held back important 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 industrial developments. 

The agreement was announced at the annual conference of Aboriginal Financial Officers Association of Canada in Winnipeg, which is in Treaty 1 territory. 

“If you need new broadband, you need new roads — you know, all the good things that you might need — energy infrastructure, we have a program that will allow you to do that,” FNBC CEO and president 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 elements not covered under CIB infrastructure criteria.    

So, for example, in a housing or commercial development, CIB funds can be used for things like water, roads, sewage or utilities, but FNBC financing would be available for houses or buildings.

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

A federal Crown corporation, the CIB was created in 2017 under Bill Morneau, the Liberal government’s finance minister at the time. Its mandate is to attract private-sector investment and use loans, loan guarantees and equity to get public infrastructure projects built. 

The FNBC is an Indigenous-owned bank with about 20 branches across the country. It has about $650 million in loans with Indigenous communities.  

Stephen Scott, CIB director of Indigenous infrastructure, explained that the partnership between the Crown corporation and the FNBC bridges a gap.   

“Infrastructure projects are typically larger, in the hundreds of millions to billions of dollars. And we have an organization that’s set up to deliver on those level of infrastructure 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 deliver 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 partnering with the CIB, the FNBC can use its expertise in working with Indigenous communities and support new projects in a way it has not seen before. 

Lomax said the FNBC could get behind projects other banks would reject because its community knowledge could give it a deeper understanding of their real risks.