Thank you for joining us today, Ernie Daniels,
President and CEO of the First Nations Finance
Authority. You're originally from Salt River
First Nation in the Northwest Territories, just
along the border with Alberta, which is fascinating
as a former Bank of Canada Governor Mark Carney
also hails from the adjacent town of Fort Smith.
Is there something unique about this little enclave
that attracts talent to the Bank of Canada? I
think you can say that. And so I try to encourage
our youth to, you know, keep their future open,
their goals and aspirations. You may be even
prime minister. You never know. It's interesting.
I never did meet Mark personally, but his father
was a principal at our school. Oh, wow. So it's
the Bank of Canada Mafia, right? If I could say
something else, it's... In Fort Smith, there
used to be two residential schools, two hostels.
And one of them was set up to host exceptional
students. And a lot of those students went on
to be leaders in the government in the Northwest
Territories. Excellent. So can you tell us a
little bit more about your upbringing and some
of your background and how often you get back
to your community now? What motivated you initially,
you know, as we're talking about giving examples
for the youth of today to pursue a career in
the financial industry? Thank you. Really appreciate
that question. It's not very often I do talk
about myself, and I don't think a lot of us are
used to that. I was born and educated in the
Northwest Territories, a member of the South
River First Nation, which is located in and around
the town of Fort Smith, the municipality of Fort
Smith, Northwest Territories. Just a bit about
Fort Smith, like, just to give you an idea what
my... upbringing was. It's a home of the largest
free -roaming herd of bison in the entire world.
Wow. It's the only place in the world where the
endangered whooping cranes nest, and they nest
in our traditional lands of Salt River First
Nation, which is pretty good. It's in Wood Buffalo
National Park, which is really close to Portsmouth.
The Slave River is the main water source. It's
a huge river. It has four sets of rapids, and
it hosts some of the best whitewater kayaking
in the world. And it's also, the rapids are home
in the summer to nesting white pelicans, and
it's a main contributor to Great Slave Lake.
So it's very, very interesting. I come from a
large family, seven boys, one girl. So we were
big into sports. So team sports, team events
were all important, I think. Those team sports
really help you as you get into future life and
all the activities and things that you end up
doing. You need a good team if you want to win.
And so that's what I've been really fortunate
to be involved in. I'm a musician myself as well.
Played in a rock and roll band in the 70s with
my brother and my cousin. So we had a pretty
good band going back then. It's a small town,
like 2 ,500 people, still 2 ,500 people today.
In my early years, there was no road access,
so everybody got to know everybody. We knew everybody.
Everybody knew what everybody was doing. I do
remember early years, without running water,
we had to go and get our water from the town
pump and those kind of things. It was really
good when we got water. I think it was a good
backdrop to grow up in. really feel what living
without was, like living without water and those
kind of things. And really appreciating when
you do have that, because, you know, some of
our communities in Canada suffer from a lot of
water issues. So I have a really good appreciation
of that. So it's really helped me in all my endeavors
and my career and everything I've done. It's
been a really good springboarding for that. Great.
Well, so what instrument did you play or were
you the lead singer? Sorry, we're going to go
through this in a bit more detail. No, I wasn't
the lead singer. I was a drummer, talking about
drums, like the drum beat. Yes. I was a drummer
and I did background vocals. It was fun times.
And okay, now you talked about team sports. So
what type of team sports were you playing? So
we played hockey. Of course, you know, just about
all Canadian communities have hockey in their
background. We played fastball, played baseball
when we were really young. With fastball, we
traveled around a lot because our team was primarily
Indigenous people. So there was six of us from
our family on the team. So we travel into the
United States for tournaments and to Western
Canada and went to a lot of the national tournaments.
So those things played, I don't know if you ever
heard of the sport broomball, but yeah, we played
that, you know, recently, like I went recently,
but maybe about 30 years ago, I took up golf
and fell in love with it and still continue.
to play today something i enjoy great great well
it sounds like ernie it sounds like you spent
all of your school your young school years in
uh salt river yeah fort smith yeah yeah salt
river really didn't have a physical reserve at
the time that they they were promised back in
1921 but the federal government uh failed to
deliver and just up in i think 1990 or 2000 is
when We did treaty land entitlement and got a
reserve. And so we're trying to build up our
reserve and it's, it's a chore. Like if you don't
have physical assets and on a reserve, it's really
difficult to get the support from the federal
government because their, their funding arrangements
are just not. made for those type of situations.
And it's unfortunate. We have a lot of nations
that encounter that in Canada today. So it's
one of the things that the government needs to
look at. It's really changing their funding arrangements
to help these nations get off the ground and
going because otherwise it's a struggle. Yes.
Moving on a bit, you know, to your career, you
know, and you've led, I guess, FNFA since 2012.
You know, you talked about the importance of
teamwork. What were some of your key milestones
or turning points in your career? that you've
led you to where you are today? If I can go just
a little bit before the FNFA, because that's
where a bulk of my work experience came from.
I graduated high school, and when I came out
of high school, I wasn't too sure on a future,
what I wanted to do or anything. So a job came
available, working with Environment Canada. It's
a long name that a lot of people kind of look
at me, but what is that? So it's a hydrometric
surveys technician. So what it did was we took
inventory of rivers and lakes throughout the
entire Northwest Territories when it was one
big territory. Wow. So I got to see a lot of
northern Canada in the wilderness, you know,
into some really beautiful places. I got to see
a lot of wildlife, but actually really learned
a lot from that as well because it was highly
technical and very mathematical. When you're
measuring cubic feet per second on rivers like
the Slade River and other rivers, it was very
unique. But there was no opportunities there
to advance because, you know, you got 300 people
waiting for the supervisor to retire. It's a
chance of moving up. So that's when I started
looking for other opportunities. And I was really
fortunate that in... In Fort Smith, at the time,
the government in Northwest Territories was setting
up a new program called Public and Business Administration.
It was at the time, Tabatcha College. Tabatcha
is a Dene name. I took that. And lo and behold,
I was amazed on how well I did with accounting.
I never took accounting before. And so that's
when I decided to become an accountant. So that's
what I did. I went to the CGA program. You know,
now they're all merged in Canada. Yeah, so I
did DAC while working at the same time, which
was really, really difficult. Did some accelerated
accounting courses, but managed to get through
that. And at the time when I got my designation,
there was another First Nation individual and
myself that graduated when the North was here.
But I think there was just a handful of Indigenous
professional accountants in Canada at the time
when I got my designation. So we were breaking
new ground for sure and becoming really... you
know, more professional other than lawyers, because
there's a lot of lawyers, a lot of professional
lawyers and indigenous lawyers. Sorry, Rob. Can't
have too many of those. So not enough accountants,
not enough of us to do the finance work that
really is important, right? So then I got that
and I went into public practice for a while.
Then I actually worked for a few development
corporations. More in the real estate acquisition
of existing businesses and really unique kind
of things in the Northwest Territories. A little
bit different than Southern Canada. We actually
partnered with Plumbers Lodges out of Winnipeg
to buy up all the lodges on Burberry Lake. It
was a unique experience. And yeah, so during
that time, I obviously started getting a lot
of experience and it was being noticed by government
Northwest Territories. And I was appointed to
the Northwest Territories Development Corporation.
It was a crown corporation of the government.
It was more of an economic development vehicle
to try to get economic activities in all the
communities in the territories, including Nunavut,
which was part of a territory then. So that was
really unique. Also got appointed to the chair
of the Legislative Assembly Building Society.
So it's a mouthful. Back in the 90s, the government
in Northwest Territories used to go from community
to community to have their legislative assembly.
So they'd be traveling around. They never had
a permanent home. And if they were in Yellowneck,
they operated out of a hotel. So they decided
to build a building, a beautiful structure. And
I was fortunate enough to get on that board.
I wasn't the chair right away. A former commissioner
was the chair, and I got to know him really well.
And when he decided to leave, he recommended
I become the chair. And so I became the chair.
But it was my first introduction to the financial
markets. We actually raised money, the society
did, by issuing some investment vehicles to residents
of the Northwest Territories to buy an investment
into this building. So it was a very unique structure
that was set up. So it really showed me the power
of leveraging and utilizing revenues from...
your people, your population, and so forth. That
was a good introduction to that. Then I found
my way to Ottawa. I don't know if you know about
the Royal Commission on Aboriginal People that
was done in the 90s and kind of wrapped up the
90s. There was a recommendation out of there
to set up a healing foundation. So the government
had set up... aboriginal healing foundation funded
it with 350 million dollars to address the legacy
of the physical and sexual abuse across the country
so the whole purpose was to fund communities
to do healing programs and so i got recruited
and i was really interested it would be the first
time that i'd be working with the budget of that
size and so that's what intrigued me and uh i
was fortunate enough to be selected as a director
of finance And we started working with that and
got more into the markets, the capital markets,
kind of like, but not fully. We set up a strip
bond portfolio to try to grow the $350 million,
set up a program with the money to increase a
certain amount with a little bit more risk, more
in the balanced portfolio kind of arrangement.
And it worked really well. We earned $100 million
in addition to the $350 million and went a long
ways. We managed to keep our administration to
15 % of the fund. And really, it was highly successful
and had no failures. And really, it did a lot
of healing. And I got to travel around and listen
to the stories and listen and meet people. So
I started to develop. a really good network of
contacts and individuals. It's really important
if you're moving forward. So those were really
key milestones for me in that area. And then
while I was in Ottawa, I kind of like to build
things. So the Healing Foundation was pretty
well built and set and they were just funding
it or monitoring the funds. So I wanted to do
something different. And an opportunity came
with the Aboriginal Finance Office Association,
which is set up to provide educational and capacity
products to First Nation or Aboriginal finance
managers across the country. So very unique organization.
And I was there for seven years. When I got there,
there was membership was about 400, in between
400 and 500 people. We had an annual conference
that was drawing about six, 700 participants
regularly. And when I left in 2011, there were
1 ,700 members and our conference was attracting
1 ,300 participants. So did something right there.
We really listened to the needs of our finance
managers, try to deliver the products to them
that would really help them do their job much
better. And then I got a phone call from the
former president and CEO of First Nation Finance
Authority, Deanna Hamilton. She was the individual
that really spearheaded the birth of FNFA and
getting it to the point where it was at that
point in time. It was legislated and just on
the verge of doing great things. So she came
and she said she was retiring and she would like
me to consider replacing her. That's how I ended
up here and came at the right time. You know,
timing is always really good when you're advancing
in your career. And so I did come at the right
time. It was structured more to finance First
Nations that were doing property taxing. So that's,
you know, that's not a lot of First Nations.
But when I got here, they were just finishing
up the major amendment to the Act was the financing
other revenues that First Nations had. So when
that regulation came in in 2011, it was a major
change for the organization. I think that's not
a milestone for me, but it's a milestone for
the organization and really a milestone for Indigenous
communities, First Nations across Canada. So
from that point on, we worked very hard, Steve,
very instrumental in helping build that path
to the capital markets. We have to get the capital
markets believing in what we're doing, which
is... It wasn't an easy task. We started lending
in 2012, and finally in 2014, we had enough to
go to the capital markets and issued our first
venture in 2014. And it was the first time in
the history, in the entire world, where a boring
pool of First Nations garnered an investment
-grade credit rating that allowed us to issue
our bond. So that was a major milestone for sure.
It set the stage for what was to come. And, you
know, I think I always look back to that point
is, you know, we really proved to government
and to First Nations that we can do this. This
can be done. Since then, you know, 10 years later,
we've issued 11 debentures, had three or four
successive credit rating increases. So we're
now at AA with S &P and Moody's. I'm not too
sure what Steve will tell you, but credit rating
with Morningstar DVRS is because their rating
numbers are a little bit different. But I think
it's very close to a double A. And in the meantime,
we were able to be awarded the Governor General's
Award for Innovation back a few years ago. So
we were actually the first financing organization
to be a recipient of the Governor General's Award.
It was because our model was so innovative, there
wasn't anything else. like that for First Nations
globally and in Canada. To me, it was another
milestone, a huge milestone. You know, the work
that we did and how we had to work with the capital
markets and how we had to also work with the
First Nations to really believe in us, believe
in what we're doing. It took a lot of work in
those early years. And I think those are personal
milestones that we were able to do that and to
get the First Nations to. really believe in us
because I believe that without the First Nations
believing us, we got nothing. We can't go forward.
We need them because they're putting their revenues
forward to support the financing that they really
want us to go out and get. And so I felt really
good about that. And since then, we've actually
been recipients of a number of awards. We won
the financing for the future. Ward was back a
few years ago as well, just around, just after
COVID, I think. It was announced in London, England
as well. We were up against organizations from
all across the globe and we came out on top in
the category we're in. Impressive. Yeah. It's
a fantastic story, Ernie. I love hearing about
your... Personal background, too. It's inspiring
when leaders like yourselves talk about humble
upbringings and what you've learned through your
travels. And maybe you've dispelled some preconceived
notions about what accountants get up to in their
spare time as well. But for the audience who's
not familiar with FNFA, can we go back a little
bit and talk about just what? the FNFA's purposes
and how it was established. Established in 2005
by federal legislation. Yeah, the receiver was
sent in 2005. And the purpose was to establish
not only FNFA, but some other organizations as
well that came out of that, like the First Nations
Financial Management Board, First Nations Tax
Authority, I guess indirectly the First Nations
Major Projects Coalition. And so a really important
act that spawned organizations doing amazing
things all these years later. In the FNFA's case,
what was the purpose of establishing? The first
iteration of the FNFA was in the early 1990s.
It was started here in West Bank First Nation.
And Steve at the time was working for the Municipal
Finance Authority of BC, which is the model that
FNFA is built after. So Deanna Hamilton, who
I mentioned earlier, was working with West Bank
because they were doing property taxation with
non -members on the reserve. And some other individuals
looked at how can we raise money from the property
taxes that we're collecting, like other municipalities,
because they didn't have that access to do that.
So they looked at Kelowna and they looked at
other surrounding municipalities and found out
that they belong to this municipal. Finance Authority
of BC. And so it's a cool boring model. And that's
how the FNFA was born in the early 90s. And they
fought for legislation for almost 20 years. That
really started the thought of this. So in 2005,
when they got to Parliament in 2006, received
Royal Assent, the second iteration of FNFA came
into force. And unlike the other institutions
that operate under the Act, We're not a crown
corporation or we're not affiliated with the
government in any way. The other institutions
have directors that are appointed by the government,
save a few directors point from other organizations.
In our case, our directors are appointed from
our members because they have all the risk involved
in this, all the benefits. And so they make up
the board. So that's how we're very unique. We're
a First Nation -led organization. You know, it
was much driven by the priorities of our First
Nation members that we serve. Primary function
is to find and secure financing in domestic and
international capital markets for First Nations.
And the financing we secure, primarily through
the issuance of debentures, is securitized by
the own source revenues of qualifying First Nations.
So where historically the financing support we
provided was primarily for infrastructure as
roads, we're now venturing into more economic
development types of investments. And I keep
going back to, you know, we seem to be evolving
each year into the different types of investments
we're making, the inroads we're making into the
capital markets. where we now have international
investors buying our debt. So our debt is well
known in the world, which is unique in itself.
On what parts of the world? Can you say what
parts of the world? Yeah, Steve can actually
add to this as well. But I know we have investors
from Korea, Europe, the United States, and I
believe we had investors from the Middle East
as well. I don't know how much, I don't think
we could say who, but it's just, you know, the
banking syndicate we work with do a really good
job of getting investors in front of us so that
we can present to them. And Steve's been doing
a really good job with that. It's great to see
an Indigenous -led institution attracting capital
from around the world because there's not enough
capital in Canada to meet the demands if we're
going to close. whether it's the infrastructure
gap or some of the other gaps that exist in First
Nations, other Indigenous communities, might
have to attract capital from outside of Canada.
And you're already doing it. So congratulations.
Oh, thank you. For our listeners, sorry, Steve
Byrne is the Chief Operating Officer of FNFA,
and he'll be joining us on another podcast. Yeah,
you've overseen tremendous growth over your tenure
of 10 years, starting with the very first bond
issuance. And now you've said 10 and over $2
billion raised, over $2 billion invested. How
many members do you have and what does it take
to become a member of a pretty special club,
it seems? Yeah, very good question. So I'll start
with how we become a member. One of the other
institutions that operates under the First Nations
Fiscal Management Act is called the First Nations
Financial Management Board. And their mandate
initially in 2011 when we were working with them
was their mandate is to develop standards for
financial management. They were based on COSO,
the Committee for Sponsoring Organizations, back
in probably around... just before 2010, they
were working on that. So they developed standards
for like a model, a level, a certain level of
financial management. So all First Nations have
to adopt that. Then they went through an assessment
of looking at their financial history and rating
them with certain financial ratios that were
recommended at the time from the capital markets.
And so based on that, if the First Nations develop
this, what they call a financial administration
law that has these standards and pass the financial
ratios. They're awarded the financial performance
certificate from the FMB. That was the ticket
to get to FNFA. So First Nations, all First Nations
have to meet the standards. So the one group,
we have a boring group that's all the same standards.
So once a First Nation has a performance, they
come to us. We do our due diligence and assess
their ability to finance debt going into the
future. So we're more future -looking. PASP is
really done by the FMB, which we rely on. But
at the same time, we are looking for the nations,
looking at what revenues they have that can support
loans. And so that's how members become a member
with us. We have about 100 in the... 70 members
now, I believe it is. Steve Burnham, he may correct
me on that because it changes pretty regularly.
And of that, there's almost 100 that are bordering
of that group. And one of the first steps, I've
got to go even further back. One of the first
steps that a nation has to do, it's supposed
to be a formality step, but it's the longest
step in the process. It's requesting to the minister
of CERNA. Crown Indigenous Relations Minister
that you want to work under the Act. So the whole
purpose of that is to signify that First Nations
are voluntarily working under their Act. They're
not being forced to work under the Act. And so
with anything, with government, it takes an easy
process, I guess, can take months. So once they
have that, then we work with them and we get
financing to them pretty quickly if they need
it. We set up our own due diligence, and we haven't
had a failure to date, which is really good.
So you would start, you would have a number of
nations who are allowed to work or permitted
then to work under the Act, and then there's
a subset who meet certain criteria who become
members of EFA authority. That's correct. Yes,
there's about three. There's an excess of 350.
First Nations that are scheduled under the Act.
So there's always going to be a lag between the
certified First Nations, I mean, the scheduled
First Nations, the certified, and the Boring
members. If we all have the same amount, then
that means everybody's included, right? So, yeah.
Yeah, curious about, do you have different size
communities and nations wanting to join? Is the...
price of admission the same for every community?
Or does it depend on projects you have? So are
there different sizes for different shapes of
communities? Guess what I'm asking. Yeah, so
yeah, not all mentions are the same and they're
not all created equal in some location in most
cases and really opportunities. So we have our
interest rate is the same for Every size of First
Nation, that does not change. They borrow as
a group. They go through the same process as
one another because they're in a borrowing group.
They're taking risk of the other members, but
they're also benefiting. So there's a risk -reward
kind of thing because if something goes wrong,
then it's a borrowing pool. You support your
members in that pool. And it's been working really
well so far. You know, more and more nations
are coming to us with different types of projects.
Depending on the complexity of the project, we
obviously have to do more due diligence for some
things. And then like some other things that
are pretty easy, like if you have a revenue sharing
agreement with Canada that flows or with a province
or that flows pretty regularly to build an administrative
building, well, that's pretty easy. But then
if you get into... A complex project like the
seven Mi 'kmaq communities that purchase clearwater
seafood is a little bit more complex. So there's
different natures of that. And then again, if
you get into oil and gas, natural gas projects,
there's a lot more due diligence. So it's just
a type of the project, but everything else is
pretty well the same for the nations in terms
of how we operate. We operate like a lockbox
mechanism. where we have a custodian that receives
the, we intercept the money through the revenue
streams to our custodian. We get paid first and
the balance goes back to the First Nation and
it's been working really well. That's kind of
the uniqueness of this. And are you typically
lending alongside an equity component? So are
you, have you got equity investors? What's for
equity, if you were going to put? Steve can give
you more details on this. But we actually, when
we're going out and issuing, like we're raising
the money and then reland it to the nations.
So we have a relanding rate. Obviously, we got
to cover our costs of operating. We do manage
pools of money because we operate a sinking fund
on the bonds. We have a debt reserve fund that's
been set up to 5 % of. the loan amount for each
of the loans that a borrower would borrow from
us. And we do have support from the federal government
for the credit enhancement fund that helped us
at the beginning. And so we manage those pools
of money. And so we do invest those. Steve can
give you more details on that. It's pretty well
for the benefit of the members. The sinking fund
is there to retire the bonds at the term of the
bond. So we are earning other principal payments
that they're making to us. And so, yeah, you're
not just lending, you're providing some advisory
services as well, investment services. Are our
nations, other than the sinking fund, are nations
placing some funds with you to invest? Yeah.
So, you know, for the first six, seven years,
we really worked on getting the loan program
going. We also, what's another milestone for
the organization is setting up our own commercial
paper program. Before we were operating on a
facility, credit facility from a consortium of
banks. But now we operate our own commercial
paper where we raise $600 million a month. And
that's to fund communities that are in between
our debenture issues or construction projects.
So we do have that available and we have a credit
rating for that, which is... I forget the rating
for that, but it's in kind of the middle of the
pack, like more your AA kind of thing. That allows
us to do that regularly. The advisory services
is more to assist the First Nations in looking
at their debt, maybe restructuring some of their
debt. And, you know, prior to the FNFA coming
on, a lot of our nations were paying double -digit
interest rates on their debt, like 11%, 12%.
Or even back a few years ago when the interest
rates were really low, they were still paying
crime plus, which is really, really high. Sometimes
we finance a high interest rate debt because
it does free up cash flow for the nations. And
in turn, they turn that money into infrastructure
because every time our nation has any revenues
that they have that they can utilize for their
communities, They're building infrastructure.
You're aware of the infrastructure gap. So that's
that. And our investment services, we just started
focusing on that maybe two and a half years ago.
We were operating a pool investment product for
our members. We were working with MFABC at the
start. And now we're working on our own. So we're
offering a pretty good rate for nations that
have really idle cash. that's available. We're
not like a trust company that can manage large
trusts like settlement funds that our nations
have. But yeah, we do have a lot of nations investing
with us right now, which is really good. It's
been a busy period. What does the future look
like for FNFA? I think the future looks pretty
good ever since the government of Canada recognized
the UNDRIP. at the UN. I was actually there in
person and witnessed Minister Caroline Bennett
at the time announced that Canada was going to
adopt the UN Declaration. It was a huge turning
point for nations in Canada. And with that, Canada
has actually passed a bill last year to implement
UNDRIP and really focus on economic reconciliation.
So with economic reconciliation, a lot of opportunities
are coming forward. Some of the things that we're
working on is to try to close this infrastructure
gap. Canada right now, the estimated amount that
a recent study with AFN, the Assembly of First
Nations, and Indigenous Services Canada did jointly
indicated that the infrastructure gap was $349
.2 billion. That just shows you the severe underfunding
to our communities that led to this. It didn't
really keep up with our population growth. And
really, First Nations had no control over infrastructure
that was being built in our communities. They
were more or less prescribed. And that was the
reason why we ended up in this situation. And
just with the experience that we have, the FNFA
has with leveraging First Nations oil and source
revenue into the capital markets and getting
more money today at today's dollar, not tomorrow's
inflated dollar. We actually have been working
on this since... I actually went back and looked
at my notes yesterday. 2017 is when I started
presentations to the Senate INAN Committee on...
monetizing federal government transfers to close
the infrastructure gap. I don't know how else
the government is going to do this. They're rolling
out some infrastructure programs, but not enough.
And they're doing it kind of over time, like
four or five years, or in two years they will
do this. But it's still, like we call it a pay
-as -you -go model that the government of Canada
uses to fund infrastructure. So whatever you
have in your budget, that's what you build. So,
you know, as individuals, we buy a house. And
there's not a lot of us can go and we don't have
the money in our bank and go and pay like $500
,000 or even a million dollars to buy a house
today. So we mortgage it. And we mortgage it
based on our ability to pay that back, which
is primarily our salary. And so based on that
concept, we win. pursuing the government and
really advocating that they set aside a certain
amount each year, monetize that, and increase
it over time so we can go out and leverage into
the capital markets that amount to build more
today at today's price. How would that differ
from what's happening now? At the moment, you
have members who are pooling their future revenues,
streams, and borrowing against that. in a way,
what would this... Well, it's really no different.
So the only difference is the source of revenue.
First Nations, their borrowing capacity with
their own source revenue is not even close to
where it would be to close a $350 billion infrastructure
gap. Even at $30 billion, it would be difficult
for First Nations' own source revenues to build
that infrastructure to close that gap. And it's
the government's responsibility for infrastructure
because they have an annual budget of about $2
.5 billion for infrastructure for all nations
across Canada in one given year. So a majority
of that goes to maintenance because the buildings
are, existing buildings are deteriorating. Schools,
you hear about the water, the drinking water
stuff and problems in Canada. So all of that.
A majority goes there. Then there's very left
for new construction. I'll give you an example.
When we got the federal officials interested
in this monetization, it was with Health Canada,
and they were separate from Indigenous Services
Canada at the time. They were looking at building
a number of health centers in Ontario in different
communities. In each of the health centers at
the time, was going to cost around $10 to $12
million. A couple of years later, that price
was $20 million. And so every time they delay,
the price of construction just goes up and the
budgets stay the same. And you're not building
enough to really satisfy the needs for the well
-being of the First Nations in our community.
And that's what it's really about. the well -being,
the quality of life for our communities. And
the government is not keeping up. It's their
responsibility. Under the arrangements of the
treaties and so forth, the funding arrangements
that they have with Canada, they have to do that.
So expecting First Nations to make up that, it's
going to be difficult without a revenue stream,
a revenue source from the government of Canada.
And so that's what we're advocating for. You
don't have to be all your budget. But it can
be one that we can start. You know, we can really
grow this to where we actually end up closing
this gap or won't close it fully because $350
billion is a lot. Because I can't see Canada
doing it. They've indicated in some of the mandate
letters, the prime minister did with some of
the mandate letters to some of the ministers.
And in the budget announcements, the speech from
the throne, that they want to close the infrastructure
gap by 2030. So we're in 2024, nearing the end
of 2024. That leaves us five years left. It's
not happening. There's an election coming up.
There's a possibility of a change in government.
That's going to change everything. We don't know
what that's going to be. So they're not going
to close this gap by 2030. But we can make some
steps towards it. We can do it. So that's what
we're advocating for. And one of the other things
that we're working on, which is pretty significant,
I'm sure you're aware of that in the last budget,
the prime minister, they announced this loan
guarantee program that would help indigenous
organizations take equity interest into large
resource projects. Yeah, $5 billion initially.
Yeah, so it's a small amount, but it's a good
number to start with. The issue for FNFA. with
the loan guarantee is that we would not be able
to participate in that. And the reason why we
wouldn't is because most of the entities would
be limited liability corporations, special purpose
vehicles that would either be a collaboration
of Indigenous organizations, whatever the number
is, to take the equity interest. And our eligibility
under the Act right now limits us to working
with an Indian. And you're not banned. So it
has to be a First Nation ban. Can you work for
their economic development arms? We can indirectly.
And that's the First Nation would be the borrower.
And they in turn would relend that to the, on
whatever terms they decide, to the relevant corporations.
I was thinking about this for a while. And I
was thinking, well, you know, how can we actually
participate? Because I was at a roundtable. an
economic roundtable that Minister Hyde to Indigenous
Services Canada minister was hosting. And she
invited all the banks, plus all the institutions
and other players in the economic, whatever their
mandates were. And then somebody from one of
the banks got up and because the announcement
of the loan guarantee just came out and everybody's
pretty happy. The banks are happy, right? No
risk, right? And so they were announcing that.
You know, with this loan guarantee program, they
can actually reduce their rate from prime by
one or two percent. Well, really, one and a half
percent. But I was sitting there thinking, well,
we're already two and a half to three percent
below. So I think it's a missed opportunity if
we're not able to provide financing to interest
collaborations of First Nations to take equity
interests. especially where there's a loan guarantee
because there's no risk there. So what we're
doing now, and we have government of Canada working
on this, we have interest from many different
ministers is to amend our act that would allow
us to lend to a special purpose vehicle where
there's a loan guarantee. If it's a 1%, a one
and a half percent saving on a billion dollar
plus project for our nations, that means a lot.
in terms of revenue that they can do. And like
I mentioned earlier, with the revenues that our
nations have, they're putting it back into infrastructure
in their communities. They're going to create
economic development. Like the impacts that we've
made with our investment, we're almost up to
$3 billion. We may be issuing before the end
of the calendar year again or early into next
year. Our estimate is that we've created over
17 ,000 jobs. The economic impact is around $6
billion. So when you think about that, the 17
,000 jobs are not all going to Indigenous people.
They're going to non -Indigenous people. So there's
a benefit for every individual Canadian, for
every investment that is made on the First Nation
Reserve. And the economic impact shows that...
Your non -Indigenous businesses are also benefiting
from the investment that's going on unreserved.
We don't have building supply companies in our
communities. We don't have, you know, car dealerships.
We don't have these supply. We don't have all
the professional, the trades people that we need
to construct our infrastructure and so forth.
So the economic benefit that we've been providing.
You know, it's a big amount for us, like $3 billion,
but in the grand scheme of things, it's a small
amount. It's making an African difference to
Canadians. And so, you know, I always say, well,
Canadians elect who becomes the government. That's
what we're trying to do. We're trying to target
Canadians. So we, you know, and also investors
of how we're attracting investors is we try to
profile. Some of the projects that communities
are taking, we're doing videos, really getting
the First Nation communities to tell the story
themselves of what this infrastructure or what
this investment means to them. By association,
it helps us a lot, but it also helps the community
achieve what they want. But it helps us to get
that wider breadth of investors out there. individual
investors, pension planners and so forth are
made up of individuals. Their money is being
invested into that. And it's really worthwhile
for us to show what their investment dollars
are doing in our communities, building a better
quality of life for our communities. And so that's
what it's all about. That's what drives me. That's
what gets me up every morning. And that's why
I'm still working at this because... You know,
I see that indigenous person myself. I'm very,
very, very proud of that, that, you know, we're
able to do this to help communities and make
it really easy for them to access the capital
markets in the way that we're doing. I personally
don't believe that our nations really understand
the power that First Nations Finance Authority
has to access the capital markets like the way
we do. And I don't believe government also realizes
that. And we should be one of the vehicles that
they should be looking at to try to achieve some
of their objectives. Absolutely. When you think
of your track record, the institution's track
record over the years, the multiplier effect,
what you could do with 200, what you could turn
that into, the fact that that then attracts the
private capital that's needed. It sounds like
a no -brainer. Yeah, so that's what I'm counting
on. And, you know, we're going to do the best
we can to make sure that message is out there
to every Canadian, you know, starting from there.
Yeah, we're working for First Nations. But at
the same time, you know, it really encouraged
Canada to invest in their communities because
it does impact the economy. And they benefit.
There's tax dollars that are being paid too.
I think the investment that they make will be
very small compared to the benefit that they
will get by investing to this. So some of the
other initiatives that we're working on is also
in the insurance area. So we've been financing
infrastructure in our communities for a number
of years now. And we've also, you know, we're
working on closing this infrastructure gap. Right
now, a lot of our communities have... difficulty
getting insurance for their assets. And if they
can, it's very expensive because they're dealing
one -on -one with insurance brokers. This whole
notion of a borrowing pool is another idea that
we came up with is to, well, let's pool all the
insurance purchasing power of Indigenous organizations
across the country and use that as a leverage
to try to get cheaper insurance and really insurance
that we need. We're working on that. We're just
building the case right now where we're doing
a feasibility study and then looking at the structure
of that. It would be independent from us. But,
you know, at the same time, we're funding these
organizations. We really want the community to
succeed, but we really we want to take some of
the risk out of it. And so insurance is one of
those areas. Stay tuned for that. We will get
there at some point in time. And one of the other
areas in insurance is surety and bonding insurance.
The government of Canada has procurement contracts
of $19 billion or so that they give out. They
have a set -aside of 5 % for Indigenous contractors.
They've never reached the 5%. 5 % is never reached.
And there's one primary reason why, amongst some
others, but one of the primary reasons is the...
our contractors can't get access to the surety
and bonding. It's very expensive. We usually
have to deal with a non -indigenous organization
that can do that. And so it's them up. And so
again, the positive impact of a First Nation
company getting up to this 5 % and having this
bonding, again, it's another economic driver.
you're creating jobs and it's not only we can
do the provincial governments so we're working
on uh again another kind of concept with the
kind of the pool pooling together contractors
that come together and setting up a backstop
much like the first instance market housing was
set up with the 300 million dollar backstop to
try to create a housing market across our nations
which is a very difficult task though we We thought,
well, you know, if we had a $100 million backstop,
we don't have to get the $100 million right away.
It can come over two or three years. We can use
that to create this insurance pool where members
are monitoring and policing each other and they
have access to bonding. You could, yeah, if you
could crack that nut, that would be really, really
impactful. So those are some of the things we're
working on. Things get thrown at us every year.
Our organization is growing and evolving at the
speed that I never envisioned when I first started
here. It's almost a different organization from
year to year. We get this long guarantee thing
thrown at us last year. So I don't know what's
coming next year, but we're trying to be ready
for that. We're making sure that we have staff
in place that can, you know, do the due diligence,
do the research, do all this groundwork that
we need done, and to try to move ourselves forward.
It's kind of, again, it goes back to creating
a better quality of life for our communities.
And so this is one way of doing it that I feel
really, really good and really happy to be proud
of. And also, you know, if I can talk about being
on the Bank of Canada for a second. Yeah, you're
the first First Nation member to be appointed
to the board. That's a real honor. Yeah, so it
is a real honor. And, you know, I'm learning
a lot from there, really learning how important
the role of the Bank of Canada is. You know,
they're not seen as one of these organizations
that really have an important role, but they
really do. But, you know, for me, it's not for
me personally to go on the board. It's for the
future. It's to set that opportunity for other
people to come on and go on the bank's board.
I want to advocate for a female Indigenous person
to get on the board. We have a lot of talented
young, not young, but my age, young females that
can actually... can actually be on the board.
So that's what I think. And so that's what I
want to kind of leave behind. I know the bank
is embarking and they're going to be announcing
in a few weeks in Ottawa their economic reconciliation
framework. So that was one of the primarily reasons
why I got chosen to be on the board and just
my background in the capital markets and doing
the work that we did at FNFA here. really, really
helped that. So that's, you know, for me, it's
not about me, but it's about what I leave behind
for somebody else to come in that I can leave
that opportunity. And that's what I like. Again,
congratulations on that appointment. I think
it's how you're talking about these opportunities,
although they're specifically with the Indigenous
community, there's benefits for all of Canada.
And Canada is not operating at its full potential
if the Indigenous communities, you know, don't
have the infrastructure and can't participate
fully. So I think that story is very important.
And Bank of Canada appointment, and then congratulations
on being named recipient of the 2024 BC CEO Award.
So you're clearly recognized, and that's one
of the reasons we have you on the program, for
your leadership, what you're bringing to Indigenous
communities across the country and in BC. And
I think that just sets a standard. And as we
talked earlier in the program, showing the young
people today, there are no limits. Aspire to
whatever you want to be. It takes, as you've
demonstrated and told us, hard work. It takes
good fortune. But if all those things come together,
no one can say there's a limit to how far anyone
can go. Yes, thank you. Really appreciate that.
It is true. And, you know, I, along with Chief
Clarence Louie, who is the chief of a Soyuz Indian
Band, he... Every summer he's involved in an
internship program with a number of Indigenous
First Nation students, young people. For I don't
know how many years in a row, I was invited to
speak to this internship. And it's some of the
things that I tell them. When an opportunity
comes to you, you have to look at it. You need
to look at it. And sometimes you have to take
a chance. Really, never burn a bridge. Keep your
opportunities. Relationship building is so key
in how we achieve our success. And being really
confident and take a chance. The worst thing
that could happen is that you fail, but you also
learn something from it. And it creates, you
know, when the next opportunity comes around,
you... I understand, but you learn something
from every opportunity. And so that's what the
message that I try to get. Well, really appreciate
your time, Ernie. You've got a busy, busy schedule,
clearly, and a lot on the go, but really appreciate
the time you've taken to explain FNFA, a bit
about what the institution does and educate our
listeners, not only here in Europe, but in Canada
as well. It's a fantastic story, and thank you
again for your time. Yes, thank you.