Finance deal struck help Indigenous communities build infrastructure

Today, the Canada Infrastructure Bank (CIB) andthe 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, Mtisand Inuit communities will be able to get loans more quickly and easily for projects ranging fromroads, to water and wastewater management, utility connections, as well as housing, commercial and industrial developments.

The agreement was announced atthe annualconference ofAboriginal Financial Officers Association of Canadain 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 Lomaxtoldthe crowd at the conference.

He added that a key to thisprogram 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 financingfor 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,theCIB was created in 2017 under Bill Morneau, the Liberal government's finance minister at the time. Its mandate is to attractprivate-sector investment and use loans, loan guarantees and equity to get public infrastructureprojectsbuilt.

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

Stephen Scott, CIB director of Indigenous infrastructure,explainedthatthe partnership between the Crown corporation and theFNBCbridges 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."

TheFNBC "has the scale, it has the people, ithas the specialized understanding of the Indigenous market to deliver on that a lot quicker than we can."

Lomax said loan rates from theFNBCwillbe "much lower than your typical market rates ... not quite zero, butwe're getting close there."

He also said that by partnering with the CIB, the FNBCcan use its expertise inworking with Indigenous communities and support new projects in away it has not seen before.

Lomaxsaid theFNBC could get behind projects other banks would reject because its community knowledge could give it a deeper understanding of their real risks.