The Canada Infrastructure Bank on Monday announced a program to help First Nation, Métis and Inuit communities buy equity ownership stakes in projects in their traditional territories, saying it would help the CIB meet its previously announced commitment to invest at least $1-billion in Indigenous infrastructure.
The new Indigenous Equity Initiative is not a loan guarantee program – in which a government or another lender backstops a loan for a borrower who might not otherwise be able to borrow those funds – but an initiative through which CIB can provide loans directly to Indigenous communities so they can buy equity stakes in major projects, CIB managing director Hillary Thatcher said.
The program will offer loans to Indigenous communities to help them buy equity stakes in projects in which the CIB is an investor.
“Our initiative is a little bit different in that we can just do a direct loan,” Ms. Thatcher said.
“We don’t need to have a financial institution lending to the community – we can now lend to them directly.”
Loans through the new initiative will be limited to five sectors in the CIB’s mandate: public transit, clean power, green infrastructure, broadband and trade and transportation.
Recently, Indigenous groups have raised concerns that Ottawa could exclude oil and gas projects from a prospective loan-guarantee program to make it align with the federal government’s goal to reach net-zero emissions by 2050.
The CIB announcement comes on the heels of the federal government’s fall economic statement, in which Ottawa said it would work on developing an Indigenous loan-guarantee program “to help facilitate Indigenous equity ownership in major projects in the natural resource sector,” with details to come in the 2024 federal budget.
Indigenous groups, including the British Columbia-based First Nations Major Projects Coalition, have been lobbying for a federal Indigenous loan-guarantee program for several years, saying such a program would help Indigenous communities benefit from projects going through their traditional territories and spur development in sectors including critical minerals.
Ontario, Alberta and Saskatchewan have Indigenous loan-guarantee programs.
In an October letter to Prime Minister Justin Trudeau, four Indigenous groups – First Nations LNG Alliance, First Nations Power Authority, Indigenous Resource Network and Athabasca Indigenous Investments – said “the inclusion of oil and natural gas as an eligible project type is critical to the prosperity of many Indigenous nations in Canada, some of whom are pursuing partnerships in traditional oil and gas and in Canada’s emerging liquefied natural gas sector.”
First Nations Major Projects Coalition chief executive officer Niilo Edwards on Monday called the new CIB initiative a much-needed tool to help Indigenous nations finance their projects, saying in an e-mail that “more options are better” when it comes to improving access to capital for Indigenous communities.
As for Ottawa’s Indigenous loan-guarantee program, the coalition hopes it will be “sector agnostic,” meaning oil and gas projects would be eligible.
Created in 2017 by the Liberal government as a Crown corporation to encourage infrastructure development through public-private partnerships, the CIB was criticized for being slow and ineffective, with the House of Commons transport committee in 2022 recommending that it be abolished.
But CIB has continued to operate, with a mandate to use at least $1-billion of its $35-billion in federal funding to pursue economic reconciliation with Indigenous communities.
The Indigenous Equity Initiative will feature loans between $5-million and $100-million to cover up to 90 per cent of Indigenous equity interest, CIB said.
The $1-billion target “is a floor, not a ceiling,” Ms. Thatcher said, adding that there are more than $2-billion worth of prospective deals that could be under consideration in the Indigenous Equity Initiative program.
Wendy Stueck