WEBVTT 00:00:00.170 --> 00:00:03.069 Welcome to Drumbeats, the must -listen -to podcast 00:00:03.069 --> 00:00:05.710 which explains why Indigenous partnerships are 00:00:05.710 --> 00:00:08.689 the key to securing successful outcomes in natural 00:00:08.689 --> 00:00:11.070 resource and infrastructure investment in Canada. 00:00:12.470 --> 00:00:15.449 I'm Mark McNacca, and today Rob and I are joined 00:00:15.449 --> 00:00:18.429 by Jeffrey Sear, founder and managing partner 00:00:18.429 --> 00:00:22.649 of Raven Indigenous Outcome Funds, the team pioneering 00:00:22.649 --> 00:00:25.769 outcomes -based financing in Indigenous communities. 00:00:26.800 --> 00:00:29.539 Jeff has built the first Indigenous -led outcomes 00:00:29.539 --> 00:00:32.500 investing platform of its kind, a model well 00:00:32.500 --> 00:00:35.420 worth looking into. One that blends government 00:00:35.420 --> 00:00:37.920 purchasing, community leadership and private 00:00:37.920 --> 00:00:41.600 capital to deliver projects. For example, his 00:00:41.600 --> 00:00:44.359 team has launched a $50 million Indigenous Outcomes 00:00:44.359 --> 00:00:47.640 Fund, raising $20 million in its first close 00:00:47.640 --> 00:00:50.640 and raising over $30 million shortly thereafter. 00:00:51.159 --> 00:00:54.100 with capital already flowing into 7 to 10 projects 00:00:54.100 --> 00:00:57.719 across Manitoba, Saskatchewan, Alberta, Ontario, 00:00:57.820 --> 00:01:01.259 and Quebec. As an example, they've retrofitted 00:01:01.259 --> 00:01:05.239 125 homes with geothermal systems, hired and 00:01:05.239 --> 00:01:07.439 trained local Indigenous crews to deliver the 00:01:07.439 --> 00:01:10.859 work, and generated a 4 % return delivered early 00:01:10.859 --> 00:01:13.659 to investors, a first -of -its -kind Indigenous 00:01:13.659 --> 00:01:16.980 outcomes financing success. This will be a two 00:01:16.980 --> 00:01:19.799 -part podcast. In this part one, you'll learn 00:01:19.799 --> 00:01:21.840 how Jeff turned a problem into an opportunity. 00:01:22.540 --> 00:01:25.079 It's the origin story behind a model now scaling 00:01:25.079 --> 00:01:28.819 across the globe, including Canada. Let's dive 00:01:28.819 --> 00:01:32.719 in. Jeff Sear, founder and managing partner, 00:01:33.000 --> 00:01:36.260 Raven Indigenous Outcome Funds. Welcome to the 00:01:36.260 --> 00:01:40.859 podcast. Thanks, Mark. Good morning, Jeff. Thanks 00:01:40.859 --> 00:01:45.519 for joining us. Yeah, happy to be here. Gratitude 00:01:45.519 --> 00:01:47.519 for reaching out to have me on your podcast. 00:01:48.200 --> 00:01:49.939 Why don't you tell us a little bit about your 00:01:49.939 --> 00:01:52.319 background? And now I understand you're in Quebec, 00:01:52.400 --> 00:01:55.219 and you can also please tell us about something 00:01:55.219 --> 00:01:57.260 you're wearing, because I think there's a good 00:01:57.260 --> 00:01:59.620 story there for our listeners. Oh, yeah, sure. 00:02:00.659 --> 00:02:04.760 So, Tanchi Ani Bojo. My traditional name is Kinuken 00:02:04.760 --> 00:02:06.640 and Nene, which is Eagle Man Leading. I'm from 00:02:06.640 --> 00:02:09.039 the Métis Nation of the Red River Valley, southern 00:02:09.039 --> 00:02:11.860 Manitoba. That's where my traditional territory 00:02:11.860 --> 00:02:14.379 is, and I traditionally harvest and go back there 00:02:14.379 --> 00:02:16.419 to do that quite regularly. And as Raul pointed 00:02:16.419 --> 00:02:18.780 out, I live... Now in Mont -Tremblant, Quebec. 00:02:19.319 --> 00:02:22.419 I went the other direction in my living choices. 00:02:23.800 --> 00:02:28.159 And I'm a founder and managing partner of Raven 00:02:28.159 --> 00:02:31.080 Outcomes, to short form, and CEO of the Raven 00:02:31.080 --> 00:02:34.000 Indigenous Impact Foundation, which is an ancillary 00:02:34.000 --> 00:02:36.180 arm of the work we do and an important part of 00:02:36.180 --> 00:02:39.840 the blended finance capital stack that we need 00:02:39.840 --> 00:02:41.680 to do in Indigenous communities these days. We 00:02:41.680 --> 00:02:43.900 can get into that if you like. Today, I'm actually 00:02:43.900 --> 00:02:48.240 wearing a traditional Métis beaded vest. which 00:02:48.240 --> 00:02:52.419 was done by my father, who was a Métis elder. 00:02:52.460 --> 00:02:55.919 He passed away last year. This is one of the 00:02:55.919 --> 00:02:59.759 heirloom I'm really bad at beading. I don't do 00:02:59.759 --> 00:03:02.419 that. My wife, who's also a Métis from Saskatchewan, 00:03:02.460 --> 00:03:05.719 she beads, so she's picked up some of the artwork 00:03:05.719 --> 00:03:09.800 along the way. But it's important to me, and 00:03:09.800 --> 00:03:11.099 it's important when we have these conversations 00:03:11.099 --> 00:03:13.840 to make sure that we represent who our communities 00:03:13.840 --> 00:03:17.460 are, who we are in that space. Yes. Beautiful, 00:03:17.580 --> 00:03:21.919 Jeff. And tell us how you came to be CEO of the 00:03:21.919 --> 00:03:27.900 Raven Outcomes Fund. Tell us a bit about your 00:03:27.900 --> 00:03:30.960 background and what got you into the investment 00:03:30.960 --> 00:03:35.500 sector in the first place. Yeah, great question. 00:03:35.639 --> 00:03:37.759 I wish it was a straight path and an easy answer, 00:03:37.840 --> 00:03:39.800 but of course it never is. Life doesn't play 00:03:39.800 --> 00:03:42.139 that way. I actually started out as a political 00:03:42.139 --> 00:03:44.949 economist and a negotiator. And I worked, you 00:03:44.949 --> 00:03:47.129 know, on First Nations rights and land claims 00:03:47.129 --> 00:03:49.229 and then on Métis rights and land claims and 00:03:49.229 --> 00:03:52.009 did a lot of work in that space, leading negotiation 00:03:52.009 --> 00:03:54.310 teams and policy teams around self -government 00:03:54.310 --> 00:03:57.030 and self -determination, those things that were 00:03:57.030 --> 00:03:59.830 important. That takes you back about 20 plus 00:03:59.830 --> 00:04:02.949 years ago that I started doing that. And then 00:04:02.949 --> 00:04:05.449 did a tour with the federal government where 00:04:05.449 --> 00:04:08.259 I was asked to come in and draft. legislation 00:04:08.259 --> 00:04:11.639 and lead consultation and then work on the implementation 00:04:11.639 --> 00:04:14.340 of supreme court decisions and a fed prof and 00:04:14.340 --> 00:04:17.959 indigenous community levels of tripartite i left 00:04:17.959 --> 00:04:19.319 there and i'm going to try to make this brief 00:04:19.319 --> 00:04:23.279 for your podcast um to go work at what was then 00:04:23.279 --> 00:04:25.319 called the national association of friendship 00:04:25.319 --> 00:04:28.879 centers as their ceo and that's all the friendship 00:04:28.879 --> 00:04:30.420 centers in canada who are in urban environments 00:04:30.420 --> 00:04:33.120 there's about 110 of those plus provincial associations 00:04:33.120 --> 00:04:36.259 what i would call the the really pointy end of 00:04:36.259 --> 00:04:37.879 the stick of service provision and indigenous 00:04:37.879 --> 00:04:41.339 communities really dealing with um tricky stuff 00:04:41.339 --> 00:04:44.160 on the ground housing homelessness food jobs 00:04:44.160 --> 00:04:48.319 you name it um and a wonderful experience for 00:04:48.319 --> 00:04:52.139 for seven eight years but the that's where the 00:04:52.139 --> 00:04:55.019 story of I take off into the investment space 00:04:55.019 --> 00:04:56.980 came from, I got out of the Friendship Centers, 00:04:57.060 --> 00:04:58.680 but while in the last couple of years I was there, 00:04:58.759 --> 00:05:01.660 I ran two Indigenous Innovation Summits, one 00:05:01.660 --> 00:05:04.060 in Winnipeg and one in Edmonton. And really what 00:05:04.060 --> 00:05:06.300 we're talking about is the social and financial 00:05:06.300 --> 00:05:08.800 innovation ecosystem that was burgeoning around 00:05:08.800 --> 00:05:12.600 the time of 2015, 2016, really at the end of 00:05:12.600 --> 00:05:15.089 the TRC report. the Truth and Reconciliation 00:05:15.089 --> 00:05:17.470 Commission in Canada, and looking at all these 00:05:17.470 --> 00:05:19.910 gaps that we had, socioeconomic gaps, capital 00:05:19.910 --> 00:05:22.110 gaps, you name it. It was all existing, and I'm 00:05:22.110 --> 00:05:26.629 sure you've heard this podcast before. And in 00:05:26.629 --> 00:05:28.410 that period when I left the Friendship Centers 00:05:28.410 --> 00:05:30.629 and we had these summits, a lot of Indigenous 00:05:30.629 --> 00:05:34.990 entrepreneurs and then communities approached 00:05:34.990 --> 00:05:38.089 me as a known sort of quantity, I think, in the 00:05:38.089 --> 00:05:40.149 ecosystem to say, hey, we're missing capital 00:05:40.149 --> 00:05:43.389 for X, Y, and Z. And in different forms. That's 00:05:43.389 --> 00:05:46.050 Indigenous -friendly. That's somewhat patient 00:05:46.050 --> 00:05:48.689 and is responsive to actual Indigenous needs. 00:05:48.769 --> 00:05:50.589 So it's not capital doing what capital wants 00:05:50.589 --> 00:05:55.750 to do, just being extractive of profit. But capital 00:05:55.750 --> 00:05:57.610 that actually works for our people. This is the 00:05:57.610 --> 00:06:02.750 story behind outcomes, really. So back then in 00:06:02.750 --> 00:06:06.689 2016, 2017... I founded Raven Indigenous Capital 00:06:06.689 --> 00:06:09.709 Partners. So the first global Indigenous -led 00:06:09.709 --> 00:06:13.649 VC firm, venture capital firm. We did two funds, 00:06:13.649 --> 00:06:15.149 had a couple of business partners, the First 00:06:15.149 --> 00:06:18.290 Nations and a non -Indigenous business partner. 00:06:18.329 --> 00:06:21.730 At the time, we scaled that up to do a couple 00:06:21.730 --> 00:06:24.389 of funds, Canada to the US, and it's doing pure, 00:06:24.449 --> 00:06:27.250 what I call pure venture cap work, right? So 00:06:27.250 --> 00:06:29.509 if you think venture capital deals with enterprises, 00:06:29.529 --> 00:06:31.689 it deals with businesses, and the thing that 00:06:31.689 --> 00:06:33.269 they're making, the service that they're providing, 00:06:33.370 --> 00:06:35.269 and how they want to scale that, it's driven 00:06:35.269 --> 00:06:39.290 by a certain sort of economic and financial reality. 00:06:40.209 --> 00:06:42.589 As patient, as flexible as we could make it, 00:06:42.629 --> 00:06:44.410 there's still some realities behind the model. 00:06:45.810 --> 00:06:47.990 Approach my community to say, look, we really 00:06:47.990 --> 00:06:50.670 want to solve self -determination of indigenous 00:06:50.670 --> 00:06:53.529 clean energy on our reserve and reform our housing. 00:06:54.029 --> 00:06:56.670 So this is an issue that's generally been in 00:06:56.670 --> 00:06:59.529 the bail wick of governments, right, of statutory 00:06:59.529 --> 00:07:04.550 responsibilities. And I was approached by a number 00:07:04.550 --> 00:07:07.569 of foundations in Indigenous communities who'd 00:07:07.569 --> 00:07:10.009 been working on some geothermal work and got 00:07:10.009 --> 00:07:13.129 stalled. They'd done like a $10 million worth 00:07:13.129 --> 00:07:14.829 of geothermal work and then got stalled out by 00:07:14.829 --> 00:07:18.389 the federal government. And I, at the time, was 00:07:18.389 --> 00:07:20.449 working in a process with a bunch of folks and 00:07:20.449 --> 00:07:21.750 said, you know what, the capital is just flowing 00:07:21.750 --> 00:07:24.100 in the wrong way. The wrong people are responsible 00:07:24.100 --> 00:07:26.180 for doing the wrong things on the capital stack. 00:07:26.259 --> 00:07:28.220 So it's not working for the community. And the 00:07:28.220 --> 00:07:29.560 community is always left trying to pick up the 00:07:29.560 --> 00:07:31.399 bag. There's never enough capital to do the things 00:07:31.399 --> 00:07:35.439 that you want. And so I guess I kind of wedged 00:07:35.439 --> 00:07:38.240 myself into doing something I didn't anticipate. 00:07:38.439 --> 00:07:39.899 So on the side of my desk, while I was doing 00:07:39.899 --> 00:07:42.040 venture capital investing, I started building 00:07:42.040 --> 00:07:44.980 what would then become the first community -driven 00:07:44.980 --> 00:07:47.199 outcomes contract in Peguas First Nation and 00:07:47.199 --> 00:07:50.879 Fisher River, sort of in central Manitoba, to 00:07:50.879 --> 00:07:54.060 do 125. housing retrofits and geothermal unit 00:07:54.060 --> 00:07:58.319 installations, which, to be honest, they were 00:07:58.319 --> 00:08:01.600 doing these at the pace of about one or two a 00:08:01.600 --> 00:08:04.920 year on different reserves across Canada. And 00:08:04.920 --> 00:08:10.480 so we did the 125 in just over two years. COVID 00:08:10.480 --> 00:08:12.819 started to get in the mix, so some things got 00:08:12.819 --> 00:08:16.480 slower as we went through it. And that turned 00:08:16.480 --> 00:08:18.800 out to be successful, really successful. And 00:08:18.800 --> 00:08:21.819 then my phone really started to ring. And not 00:08:21.819 --> 00:08:23.899 from where I thought it was. When you say successful, 00:08:24.060 --> 00:08:28.779 how were you measuring that? In a couple ways. 00:08:28.860 --> 00:08:32.519 First of all, we installed 125 units and retrofitted 00:08:32.519 --> 00:08:35.519 125 on reserve housing. So this is a housing 00:08:35.519 --> 00:08:38.399 owned largely by band councils, right? Very little 00:08:38.399 --> 00:08:41.539 private ownership at the time, or still is, as 00:08:41.539 --> 00:08:43.860 you know, the legal situation in Canada on res. 00:08:45.519 --> 00:08:49.809 But so we have this like... Trailing issue in 00:08:49.809 --> 00:08:51.570 Canada of housing stock. We don't have enough 00:08:51.570 --> 00:08:53.730 houses. We really don't have enough on reserve. 00:08:53.850 --> 00:08:55.549 And so you have multifamilies and dwellings. 00:08:55.549 --> 00:08:57.909 And it's really tough on the housing stock. It 00:08:57.909 --> 00:09:00.409 really beats it up as well. So you're not getting 00:09:00.409 --> 00:09:02.090 it, even though there's government programs in 00:09:02.090 --> 00:09:05.070 place to somewhat address. It's never enough 00:09:05.070 --> 00:09:06.850 and it's never timely and it's never done in 00:09:06.850 --> 00:09:08.549 a way that the kingdom can really access it. 00:09:08.889 --> 00:09:12.289 So success looked at doing it, hiring local people 00:09:12.289 --> 00:09:16.009 to have HVAC level jobs and management jobs because 00:09:16.009 --> 00:09:19.539 they would actually manage it. It would be direct 00:09:19.539 --> 00:09:21.519 investing in the community. It would be reducing 00:09:21.519 --> 00:09:24.399 energy bills by 50%, reducing greenhouse gas 00:09:24.399 --> 00:09:26.860 emissions, and increasing the longevity of the 00:09:26.860 --> 00:09:30.899 housing stock by at least two to three decades, 00:09:31.000 --> 00:09:33.559 if not more. And we're in the process of measuring 00:09:33.559 --> 00:09:37.279 how you get to that. So you had all these combined 00:09:37.279 --> 00:09:40.159 impacts. So you have outcomes, but then you have 00:09:40.159 --> 00:09:42.879 direct impacts for the community as a whole. 00:09:42.980 --> 00:09:45.720 And then there's all kinds of tertiary impacts 00:09:45.720 --> 00:09:48.519 that would emerge, right? So houses that never 00:09:48.519 --> 00:09:50.200 had air conditioning all of a sudden got air 00:09:50.200 --> 00:09:52.200 conditioning with you. So things are starting 00:09:52.200 --> 00:09:55.659 to kind of change at the community level. Even 00:09:55.659 --> 00:09:57.440 like things that you don't think about at first, 00:09:57.539 --> 00:10:00.519 like band councils are on block funding. So they're 00:10:00.519 --> 00:10:02.000 funding all this stuff under one single block 00:10:02.000 --> 00:10:04.080 of funding from the federal government. So if 00:10:04.080 --> 00:10:07.220 you reduce housing costs, so energy, for example. 00:10:07.759 --> 00:10:10.419 to 50 % of what it was. They saved that money 00:10:10.419 --> 00:10:12.279 and then could put it in education or job care 00:10:12.279 --> 00:10:14.720 or whatever they want. So there's a tertiary 00:10:14.720 --> 00:10:18.399 effect on the local economy as well. So a bit 00:10:18.399 --> 00:10:20.360 of a long -winded answer, Rob, to your question, 00:10:20.419 --> 00:10:23.559 but there's a lot of... And we paid investors 00:10:23.559 --> 00:10:26.480 back 4 % on that one. I was going to ask, yeah, 00:10:26.539 --> 00:10:29.440 from the investor's perspective. Wow. And we 00:10:29.440 --> 00:10:33.600 did 4 % because we... At the time, I didn't really 00:10:33.600 --> 00:10:36.240 understand what the market was going to be. So 00:10:36.240 --> 00:10:38.500 we started market building. And we're like, well, 00:10:38.639 --> 00:10:42.679 let's not give egregious returns and then have 00:10:42.679 --> 00:10:45.919 everyone rush into it like an AI goldmine and 00:10:45.919 --> 00:10:49.080 throw money at it. Because that's a problem from 00:10:49.080 --> 00:10:51.779 past indigenous communities. So let's kind of 00:10:51.779 --> 00:10:54.659 take a stepped approach, a staged approach to 00:10:54.659 --> 00:10:57.340 it. But the investors were happy. Because they 00:10:57.340 --> 00:10:58.759 were taking a risk on something that hadn't been 00:10:58.759 --> 00:11:01.740 done before. And it paid it back in just under 00:11:01.740 --> 00:11:05.379 three years. I love the fact that you got the 00:11:05.379 --> 00:11:10.019 community involved too and a bit of ownership 00:11:10.019 --> 00:11:14.299 of the resolving and solving the problem. It 00:11:14.299 --> 00:11:16.940 wasn't just hiring, putting money in, hiring 00:11:16.940 --> 00:11:20.019 contractors to come in and retrofit and then 00:11:20.019 --> 00:11:23.379 leave. It sounds like it was community involvement 00:11:23.379 --> 00:11:27.129 all the way through. Yeah, one thing I would 00:11:27.129 --> 00:11:30.730 say about that is those skills and that body 00:11:30.730 --> 00:11:36.350 of workers then went on to do other. So, for 00:11:36.350 --> 00:11:40.590 example, in Fisher River, they went on to put 00:11:40.590 --> 00:11:44.850 geothermal in the gym, the car wash, the laundromat, 00:11:44.850 --> 00:11:47.149 and then the big school that fun got. And it 00:11:47.149 --> 00:11:50.149 was their workers who did it. So this self -determination 00:11:50.149 --> 00:11:53.110 piece becomes critical in the long -term trajectory 00:11:53.110 --> 00:11:56.820 of the community. because we had a leaky bucket 00:11:56.820 --> 00:11:59.779 economy before right as you said rob contractors 00:11:59.779 --> 00:12:02.960 would come in but the real profit poured out 00:12:02.960 --> 00:12:04.840 after the work was done and none of the skill 00:12:04.840 --> 00:12:07.580 was left over so trying to solve for that at 00:12:07.580 --> 00:12:11.419 the same time yes what about the investors who 00:12:11.419 --> 00:12:15.419 secured that return can you describe what type 00:12:15.419 --> 00:12:19.419 of investors did you have yeah those those early 00:12:19.419 --> 00:12:24.509 investors um were not your big institutionals, 00:12:24.509 --> 00:12:26.830 of course, and they wouldn't do that. It was 00:12:26.830 --> 00:12:30.690 family offices, high net worth individuals, foundations, 00:12:31.129 --> 00:12:33.429 community foundations as well came on board. 00:12:33.669 --> 00:12:36.809 Those were the ones who said, yeah, we need better 00:12:36.809 --> 00:12:40.070 outcomes. And so let's, and this, we're not talking, 00:12:40.149 --> 00:12:44.009 I think the first investment pool was just shy 00:12:44.009 --> 00:12:47.090 of $5 million for that, right? And so we're not 00:12:47.090 --> 00:12:50.529 talking, it's not insignificant, but it's not 00:12:50.529 --> 00:12:56.070 huge. Correct. And so most of those later on 00:12:56.070 --> 00:13:00.149 became investors in our first fund. So they had 00:13:00.149 --> 00:13:03.149 a great experience and then kind of laddered 00:13:03.149 --> 00:13:06.610 into. We can talk about the fund after. Yes. 00:13:06.850 --> 00:13:11.269 And what money funds the repayment? He said investors 00:13:11.269 --> 00:13:17.750 are repaid with interest if money is going into 00:13:17.750 --> 00:13:24.870 the retrofit. Right. The way that it works is 00:13:24.870 --> 00:13:28.149 the repayment, or what I call the outcomes purchase, 00:13:28.450 --> 00:13:32.610 or in financial terms, Rob, a takeout buyer is 00:13:32.610 --> 00:13:36.970 a good way to think about it, is different levels 00:13:36.970 --> 00:13:40.429 of government. And so in this case, it was the 00:13:40.429 --> 00:13:42.889 federal and provincial government. So what we 00:13:42.889 --> 00:13:44.909 end up doing, and in every single outcomes contract 00:13:44.909 --> 00:13:47.370 we've had, we've always had stacked outcomes 00:13:47.370 --> 00:13:50.820 purchasers. One of the reasons, well, we can 00:13:50.820 --> 00:13:55.000 get into that. So they have programs that they 00:13:55.000 --> 00:13:58.879 have put in place to do some of these sort of 00:13:58.879 --> 00:14:02.860 work with very low take -up and very inconsistent 00:14:02.860 --> 00:14:06.799 take -up. And for a variety of reasons. One is, 00:14:07.039 --> 00:14:10.379 I think, the relationship capital you need to 00:14:10.379 --> 00:14:14.000 work in Indigenous communities and to work at 00:14:14.000 --> 00:14:16.399 scale. And so everything that was going on before 00:14:16.399 --> 00:14:18.919 was just one -offs. One house would have, so 00:14:18.919 --> 00:14:21.299 let's, I think an example is helpful for your 00:14:21.299 --> 00:14:25.779 audience. You're on Fisher River First Nation. 00:14:26.059 --> 00:14:28.919 You want to put in a geothermal system in your 00:14:28.919 --> 00:14:32.360 home and do a retrofit of the house. And it's, 00:14:32.360 --> 00:14:35.159 you kind of need to do both. Like it doesn't 00:14:35.159 --> 00:14:37.179 make a lot of sense to do a geothermal system. 00:14:37.240 --> 00:14:40.639 You're producing great energy heat and then have 00:14:40.639 --> 00:14:42.740 it go out doors and windows and rooms and things 00:14:42.740 --> 00:14:47.440 like that. Previously, what you would have to 00:14:47.440 --> 00:14:51.419 do is you would have to apply as an individual 00:14:51.419 --> 00:14:54.860 home tenant or as the first nation on an individual 00:14:54.860 --> 00:14:57.700 home. So just think of the paperwork that starts 00:14:57.700 --> 00:15:00.399 to ensue. To someone like the Canadian Mortgage 00:15:00.399 --> 00:15:01.980 and Housing Corporation and their Section 95 00:15:01.980 --> 00:15:05.779 programs and to a provincial entity. So in Manitoba, 00:15:05.820 --> 00:15:08.480 that's Efficiency Manitoba, which came out of 00:15:08.480 --> 00:15:10.519 Manitoba Hydro, but this is a self -standing 00:15:10.519 --> 00:15:15.110 body now. And they have subsidies, rebates. and 00:15:15.110 --> 00:15:19.269 full -on granting at times to do this work. But 00:15:19.269 --> 00:15:21.870 the problem was it was never coordinated and 00:15:21.870 --> 00:15:24.149 that you, the home occupant, would have to put 00:15:24.149 --> 00:15:27.110 out a typical geothermal system. Geoexchange 00:15:27.110 --> 00:15:30.070 system would probably cost nowadays $31 ,000. 00:15:30.610 --> 00:15:33.250 So you can take out of your pocket $31 ,000 and 00:15:33.250 --> 00:15:34.769 think of what we're talking about here for an 00:15:34.769 --> 00:15:38.169 economic situation on RAS. It's just not. So 00:15:38.169 --> 00:15:40.529 of course you're doing one or two a year. If 00:15:40.529 --> 00:15:43.899 you're lucky. Yes. And you'd have to fill out 00:15:43.899 --> 00:15:45.940 all that paperwork and be adept at doing it and 00:15:45.940 --> 00:15:48.179 hire the contractors and make it all happen and 00:15:48.179 --> 00:15:50.299 then get approval from the housing authority. 00:15:51.220 --> 00:15:55.080 So that's what the problem you're kind of solving 00:15:55.080 --> 00:15:56.620 for. So we come in and said, we're going to do 00:15:56.620 --> 00:16:00.960 125 in just over two years. People are like, 00:16:00.960 --> 00:16:05.120 whoa. But we've never really. So folks like CMHC, 00:16:05.139 --> 00:16:07.240 and kudos to them, by the way, they were extremely 00:16:07.240 --> 00:16:09.419 great to work with. And so was Efficiency Manitoba. 00:16:10.159 --> 00:16:14.779 said, can we please work at scale? Let's do lots. 00:16:15.179 --> 00:16:17.940 And so Raven ends up being the relationship interlocutor 00:16:17.940 --> 00:16:21.379 and the capital provider at the front end. And 00:16:21.379 --> 00:16:23.600 then governments use their statutory programs 00:16:23.600 --> 00:16:26.940 and other things, and we pool the capital and 00:16:26.940 --> 00:16:29.320 act as an outcomes purchase upon verification. 00:16:30.220 --> 00:16:32.360 So hopefully I didn't confuse that too much for 00:16:32.360 --> 00:16:35.279 everybody. No, not at all. And just for our audience, 00:16:35.500 --> 00:16:38.100 CMHC is Canada Mortgage and Housing Corporation. 00:16:40.379 --> 00:16:42.639 So really good to bring things together like 00:16:42.639 --> 00:16:43.960 that because that's what happened. There are 00:16:43.960 --> 00:16:45.779 good initiatives. There are good programs. But 00:16:45.779 --> 00:16:49.059 when you're doing them one by one, I mean, on 00:16:49.059 --> 00:16:54.080 a reservation or not, $31 ,000 is a lot of money. 00:16:54.080 --> 00:16:57.179 And the paperwork, we all know it's just a nightmare. 00:16:57.419 --> 00:17:00.919 So when you can do it at scale, that's fantastic. 00:17:01.500 --> 00:17:03.820 And then you built the reputation for your first 00:17:03.820 --> 00:17:08.369 fund. Right. And I think. The capital we've managed 00:17:08.369 --> 00:17:10.990 to pool kind of on a per home basis was probably 00:17:10.990 --> 00:17:15.349 about 70 ,000 per home. So that ends up being 00:17:15.349 --> 00:17:20.470 a significant retrofit. And, you know, it has 00:17:20.470 --> 00:17:22.450 health implications too, because you're removing 00:17:22.450 --> 00:17:24.950 black mold and you're getting airflow. And so 00:17:24.950 --> 00:17:27.150 all these implications that kind of fall from 00:17:27.150 --> 00:17:29.109 it. So I think that's what got people excited. 00:17:29.890 --> 00:17:32.450 Yes. And then you change the community, what 00:17:32.450 --> 00:17:34.750 it is to grow up and live in that community, 00:17:34.809 --> 00:17:37.910 because all of a sudden, It's gone from terrible 00:17:37.910 --> 00:17:41.049 housing conditions, right? Your housing conditions 00:17:41.049 --> 00:17:43.410 start to be good. Then you have time to concentrate 00:17:43.410 --> 00:17:45.289 on other things because you're not just fighting 00:17:45.289 --> 00:17:48.430 to survive, right? You're thinking, okay, how 00:17:48.430 --> 00:17:50.609 can I grow and develop? And as you said, you 00:17:50.609 --> 00:17:53.769 brought capacity and capabilities into the reservation 00:17:53.769 --> 00:17:56.789 where none existed before. Now they have these 00:17:56.789 --> 00:17:58.890 opportunities to go around. How can we make our 00:17:58.890 --> 00:18:03.130 community even better, even stronger? Yeah, and 00:18:03.130 --> 00:18:08.200 we've seen that. call it consequences or benefits, 00:18:08.400 --> 00:18:12.640 where we, you know, there's a story of an elder 00:18:12.640 --> 00:18:14.599 in the community had her house, one of the first 00:18:14.599 --> 00:18:16.640 ones. The community usually prioritizes the elders, 00:18:16.720 --> 00:18:18.559 by the way, to do the houses first. Because we 00:18:18.559 --> 00:18:20.180 let them prioritize what's going to get done. 00:18:21.000 --> 00:18:23.279 She said, hey, I got air conditioning in the 00:18:23.279 --> 00:18:25.319 summer, so now what's happening is all the grandkids 00:18:25.319 --> 00:18:27.140 are coming over and they're friends. And they're 00:18:27.140 --> 00:18:29.279 hanging out at the grandkids' house. And what 00:18:29.279 --> 00:18:31.400 happens is then grandma starts telling stories. 00:18:31.500 --> 00:18:33.339 And of course, storytelling is transmission of 00:18:33.339 --> 00:18:34.839 traditional knowledge. So there's a cultural 00:18:34.839 --> 00:18:39.460 impact too that kind of occurs ancillary to the 00:18:39.460 --> 00:18:41.779 direct benefit of, I don't know, getting 4 % 00:18:41.779 --> 00:18:43.559 return on your investment or putting a geothermal 00:18:43.559 --> 00:18:46.400 system in, which is where the exciting part happens, 00:18:46.460 --> 00:18:49.799 which is what I mean being closer to the impact, 00:18:50.079 --> 00:18:52.980 which I love personally. That's why we do the 00:18:52.980 --> 00:18:55.640 work. Does that particular program continue? 00:18:56.569 --> 00:18:59.250 Yeah, it does. It continues in the fund. And 00:18:59.250 --> 00:19:03.970 it's matured, which I think is important. If 00:19:03.970 --> 00:19:05.869 you're talking about market readiness, it's a 00:19:05.869 --> 00:19:12.349 maturing thing. So we put the first fund together, 00:19:12.789 --> 00:19:17.750 Raven Outcomes, Indigenous Outcomes Fund 1, which 00:19:17.750 --> 00:19:21.549 is targeted as a $50 million fund. We raised 00:19:21.549 --> 00:19:27.380 the first $20 million. So late 24, so fall 24, 00:19:27.680 --> 00:19:31.960 raised the first $20 .4 million. And then next 00:19:31.960 --> 00:19:34.259 week, we'll do the second closing at $33 million, 00:19:34.559 --> 00:19:39.099 going to $50 million by the end of Q2. And I 00:19:39.099 --> 00:19:40.980 can say that momentum and interest from investors 00:19:40.980 --> 00:19:44.359 has picked up radically. So that's good. But 00:19:44.359 --> 00:19:48.700 when we put the fund together, we already had 00:19:48.700 --> 00:19:52.740 interest from communities and from outcomes purchasers. 00:19:53.150 --> 00:19:56.130 So the question was investors. And that actually 00:19:56.130 --> 00:19:59.349 happened fairly quickly. I think people saw what 00:19:59.349 --> 00:20:03.369 it was. It's a new investment vehicle in a way, 00:20:03.490 --> 00:20:07.069 in a way. So once we got over the first hurdle 00:20:07.069 --> 00:20:12.369 with explaining it, we're now moving from what 00:20:12.369 --> 00:20:16.569 I would say foundations, family offices, smaller 00:20:16.569 --> 00:20:18.609 financial institutions into the institutional 00:20:18.609 --> 00:20:21.009 institutions. It's a lot of institutional words 00:20:21.009 --> 00:20:23.549 there. if you get my drift on where that's headed. 00:20:24.150 --> 00:20:26.529 And so we're starting to see the ticket size 00:20:26.529 --> 00:20:29.430 go up on investors coming in. Now, what it led 00:20:29.430 --> 00:20:32.730 us to your question, Rob, where it led us is 00:20:32.730 --> 00:20:36.990 we did a early investment in Sioux Valley Dakota 00:20:36.990 --> 00:20:40.809 Nation, which is 25 units. And we warehoused 00:20:40.809 --> 00:20:42.710 that deal before the fund closed and then brought 00:20:42.710 --> 00:20:45.109 it into the fund about three months later because 00:20:45.109 --> 00:20:47.109 they wanted to do work. And you're still dealing 00:20:47.109 --> 00:20:49.069 with construction seasons. Manitoba is particularly 00:20:49.069 --> 00:20:55.819 cold. And then we signed a second deal at Broken 00:20:55.819 --> 00:20:59.640 Head Ojibwe Nation for 100 units, about a $7 00:20:59.640 --> 00:21:02.680 million investment. And we have another investment 00:21:02.680 --> 00:21:06.339 in Onion Lake in Saskatchewan and Alberta. And 00:21:06.339 --> 00:21:09.039 Onion Lake is different because it's home solar 00:21:09.039 --> 00:21:15.539 and retrofit. And we're agnostic on the energy 00:21:15.539 --> 00:21:17.519 source or what that is. We're just interested 00:21:17.519 --> 00:21:21.240 in the impact on communities. But it also crosses 00:21:21.240 --> 00:21:23.200 the Alberta -Saskatchewan border, the First Nations 00:21:23.200 --> 00:21:24.960 across the border. So you're dealing with two 00:21:24.960 --> 00:21:27.440 provincial entities and the federal entities. 00:21:27.519 --> 00:21:29.740 So it's slightly more complex, mostly for us, 00:21:29.779 --> 00:21:34.279 in doing it. And then we have one in Ontario 00:21:34.279 --> 00:21:38.019 that's pretty much ready to go, another one in 00:21:38.019 --> 00:21:40.980 northern Manitoba, then one in Quebec that we're, 00:21:40.980 --> 00:21:44.619 in Kahnawake that we're looking at. So that stuff's 00:21:44.619 --> 00:21:49.359 moved fairly rapidly forward. Yeah, and I'm excited. 00:21:49.880 --> 00:21:52.940 I'm excited to get going on it. It is exciting. 00:21:54.279 --> 00:21:58.220 In 2023, Jeffrey Sear and his team at the Raven 00:21:58.220 --> 00:22:01.059 Indigenous Impact Foundation, working alongside 00:22:01.059 --> 00:22:04.059 the Sorensen Impact Institute at the University 00:22:04.059 --> 00:22:08.160 of Utah, released a report, The State of Outcomes 00:22:08.160 --> 00:22:10.180 -Based Finance in Canada, which we're now going 00:22:10.180 --> 00:22:14.059 to talk through in detail. It provides a critical 00:22:14.059 --> 00:22:17.900 overview of the OBF opportunity for Canada compared 00:22:17.900 --> 00:22:21.670 to its peers. The key feature of outcomes -based 00:22:21.670 --> 00:22:24.609 finance is the alignment of financial incentives 00:22:24.609 --> 00:22:28.529 with positive social outcomes. Investors provide 00:22:28.529 --> 00:22:31.349 the upfront capital required to deliver, taking 00:22:31.349 --> 00:22:34.589 on the financial risk. If the predetermined outcomes 00:22:34.589 --> 00:22:37.609 are successfully achieved, the government pays 00:22:37.609 --> 00:22:40.410 for the results. The investors will then receive 00:22:40.410 --> 00:22:43.430 their capital plus a return on their investment. 00:22:44.049 --> 00:22:46.950 This structure not only encourages a focus on 00:22:46.950 --> 00:22:50.450 effective evidence -based interventions, but 00:22:50.450 --> 00:22:53.230 also provides a mechanism to pay for results 00:22:53.230 --> 00:22:57.930 rather than simply for services delivered. Globally, 00:22:57.950 --> 00:23:01.910 outcomes -based finance, OBF, is already proven. 00:23:02.049 --> 00:23:04.710 It's been many years since the first social impact 00:23:04.710 --> 00:23:08.950 bond was launched. In Canada, outcomes -based 00:23:08.950 --> 00:23:11.069 initiatives have been successfully launched in 00:23:11.069 --> 00:23:15.289 Nova Scotia, Quebec, Ontario, Manitoba, Saskatchewan, 00:23:15.369 --> 00:23:18.609 and British Columbia. In terms of focus areas, 00:23:18.869 --> 00:23:21.549 workforce development is the most covered area 00:23:21.549 --> 00:23:24.230 with six OBF contracts structured in the recent 00:23:24.230 --> 00:23:27.210 past. Other focus areas have included education, 00:23:27.670 --> 00:23:31.809 environmental, social welfare, health, and criminal 00:23:31.809 --> 00:23:34.829 justice. In recent years, there's been a noticeable 00:23:34.829 --> 00:23:37.009 increase in the number of environmental -related 00:23:37.009 --> 00:23:40.430 OBF contracts, all of which have been Indigenous 00:23:40.430 --> 00:23:44.130 -led. Consistent success factors across projects 00:23:44.130 --> 00:23:47.250 are numerous. strong data collection and management, 00:23:47.490 --> 00:23:52.250 political champions, central coordination, capacity 00:23:52.250 --> 00:23:55.109 building for service providers, durable stakeholder 00:23:55.109 --> 00:23:59.309 partnerships, adaptable contracts, and most importantly, 00:23:59.529 --> 00:24:02.609 alignment between purchasers and communities. 00:24:03.069 --> 00:24:06.210 There are challenges with the OBF model, which 00:24:06.210 --> 00:24:08.789 is not widely understood in Canada, of course, 00:24:08.789 --> 00:24:12.410 around the globe. Integrated into policy and 00:24:12.410 --> 00:24:17.420 procurement is challenging. can be complex leadership 00:24:17.420 --> 00:24:22.279 turnover can also slow momentum however what 00:24:22.279 --> 00:24:27.460 is clear is it delivers results so as canada 00:24:27.460 --> 00:24:30.480 goes through this transition outcomes -based 00:24:30.480 --> 00:24:33.500 financing is emerging as a credible and proven 00:24:33.500 --> 00:24:38.160 alternative the potential is strong the ecosystem 00:24:38.160 --> 00:24:43.079 needs to be strengthened obf has already attracted 00:24:43.710 --> 00:24:46.809 Hundreds of millions of dollars in capital. According 00:24:46.809 --> 00:24:50.069 to publicly available information, the UK leads 00:24:50.069 --> 00:24:54.829 the OBF market with over 90 transactions worth 00:24:54.829 --> 00:24:58.369 about $100 million in terms of capital. In the 00:24:58.369 --> 00:25:01.009 US, although there's been fewer number of transactions, 00:25:01.430 --> 00:25:05.769 approximately 25 at the time of the report, it's 00:25:05.769 --> 00:25:09.829 attracted over $200 million in capital. Canada's 00:25:09.829 --> 00:25:12.480 initial efforts. have been primarily driven by 00:25:12.480 --> 00:25:15.839 the Manitoba Social Innovation Office, SIO, and 00:25:15.839 --> 00:25:17.900 a select group of other practitioners in recent 00:25:17.900 --> 00:25:21.420 years. The implication is not that Canada lacks 00:25:21.420 --> 00:25:24.720 the capability. The implication is there's a 00:25:24.720 --> 00:25:28.140 huge opportunity in front of Canada and all Canadians 00:25:28.140 --> 00:25:32.799 to apply the OBF model successfully from C to 00:25:32.799 --> 00:25:36.720 C to C. So if we look at the number of OBF initiatives 00:25:36.720 --> 00:25:39.859 internationally versus where Canada's initiative 00:25:39.859 --> 00:25:42.740 has been focused, we can see workforce development, 00:25:42.980 --> 00:25:47.420 social welfare dominate the initiatives in other 00:25:47.420 --> 00:25:51.599 geographic regions. However, in Canada, the mix 00:25:51.599 --> 00:25:53.720 is slightly different. That's partly because 00:25:53.720 --> 00:25:56.519 we're just getting going in OBF in Canada. And 00:25:56.519 --> 00:25:58.140 we're looking forward to the work of Jeffrey 00:25:58.140 --> 00:26:01.160 Sear and his team at Raven to drive this model 00:26:01.160 --> 00:26:03.740 across the country. But you can see Canada has 00:26:03.740 --> 00:26:05.819 had a lot of focus on workforce development. 00:26:06.200 --> 00:26:08.960 And then rather equally distributed against... 00:26:09.150 --> 00:26:12.250 other types such as social welfare, health, education, 00:26:12.349 --> 00:26:16.130 criminal justice, but want to reinforce in Canada 00:26:16.130 --> 00:26:18.210 something very unique is those environmental 00:26:18.210 --> 00:26:21.950 and agricultural projects are primarily all Indigenous 00:26:21.950 --> 00:26:26.410 -led. So I'm sure over time, this picture for 00:26:26.410 --> 00:26:29.410 Canada will change, may match with its peers 00:26:29.410 --> 00:26:33.769 globally, but it demonstrates the opportunity 00:26:33.769 --> 00:26:38.259 in front of Canada, but also in front of... the 00:26:38.259 --> 00:26:40.900 Indigenous peoples of Canada, to use this model 00:26:40.900 --> 00:26:44.680 to achieve their rightful place in Confederation 00:26:44.680 --> 00:26:49.500 and in the development of the country. Thank 00:26:49.500 --> 00:26:51.680 you to Jeffrey Sear for sharing his insights 00:26:51.680 --> 00:26:54.279 with us, and thank you for viewing and listening. 00:26:55.200 --> 00:26:58.319 Mark your calendars for the upcoming 2026 Summit, 00:26:58.440 --> 00:27:01.460 taking place on the 8th of April. Be sure to 00:27:01.460 --> 00:27:03.640 share, subscribe, and leave a review on your 00:27:03.640 --> 00:27:06.299 favorite podcast channel. Thanks for listening 00:27:06.299 --> 00:27:08.180 to Drumbeats. Until next time.