Closing the First Nations Infrastructure Gap
Monetization is the practice of leveraging annual cashflows into long-term debt to build key infrastructure for communities.
FNFA debentures are currently secured by First Nation own-source revenue dollars and are a proven way to raise capital for First Nations projects.
Monetization would complement this approach by leveraging annual federal transfers to build infrastructure at today’s costs.
FNFA is advocating for the adoption of this model to address the widening infrastructure gap between the rest of Canada and First Nations communities.
APTN Newscast of Press Conference
Standing Senate Committee on Indigenous Peoples – FNFA’s Session on Monetization
The Standing Senate Committee on Indigenous Peoples from March 22, 2023, features Ernie Daniels, Steve Berna, and Jody Anderson of FNFA as they discuss the feasibility of piloting monetization to close the infrastructure in First Nation communities. Sourced from the Senate of Canada’s website.
The concept of Monetization is not new. In fact, it’s used widely by municipal and provincial governments to fund infrastructure through issuing debentures.
Example: A 10-year annual federal funding commitment would mean that, for each participating First Nation, a $1 million annual infrastructure grant could be leveraged through an FNFA debenture into an $8 million infrastructure project; a 25-year term would be leveraged to approximately $18 million.
Support for Proposed Model
Standing Committee on Indigenous and Northern Affairs (April 2022)
- Recommendation 3: That the Government of Canada work with the First Nations Finance Authority, the First Nations Tax Commission, and the First Nation Financial Management Board to test monetization through a pilot project on replacing diesel generation in remote communities
- Recommendation 8: That the Government of Canada improve and refine its requirements that a minimum of 5% of the value of Federal contracts (valued over $5 million) are awarded to Indigenous businesses.
Expanding and Diversifying
- Bonding Insurance: FNFA is working to establish a process that enables Indigenous construction companies to attain affordable bonding insurance so they can bid on the approved Monetization projects, and Request For Tenders issued by Canada.
- Asset Insurance: FNFA is also working on enabling First Nations communities to access affordable and adequate asset insurance—an ongoing challenge they face.