The indigenous loan guarantee program will have no green conditions, opening up opportunities for controversial developments such as oil, gas and nuclear projects.
Details of the program, announced in Tuesday’s federal budget, answer questions that have dogged the program since it was announced last fall in a mini-budget.
The federal Indigenous loan guarantee program will be worth up to $5 billion and will be “sector agnostic”, meaning any sector can be developed, the latest budget revealed.
A finance official said Canadian National Observer that the decision reflects Ottawa’s commitment to economic reconciliation and self-determination. In practice, the decision avoids telling indigenous groups how they should pursue their economic development, as was historically the case.
It is designed to level the economic playing field by ensuring First Nations and other Indigenous groups can access loans from banks through an Ottawa guarantee. Previously it was difficult to get loans for indigenous groups.
The program can also work in conjunction with similar Indigenous loan guarantees in Ontario, Alberta, Saskatchewan and, most recently, British Columbia, increasing the amount of capital available for Indigenous economic development.
Ottawa’s contribution will also reduce loan interest rates for Indigenous developers by taking advantage of Ottawa’s AAA credit rating, which is the highest available.
“This is an economic stimulus,” said one finance official, noting that indigenous resource development should not be limited by credit, capacity or sectoral parameters set by Ottawa.
The program will cost $16.5 million over the next two years and will be managed by Natural Resources Canada. The funds will support the capacity of Indigenous communities and organizations to ensure they can develop and apply for loan guarantees.
The federal Indigenous loan guarantee program will be worth up to $5 billion and will be “sector agnostic”, meaning any sector can be developed, the latest budget revealed.
The 2024 budget did have some reserves for clean development, with $36 million over three years to renew the Strategic Partnership Initiatives Clean Energy program.
Climate adaptation gets $100 million less for fire season
In the wake of last year’s wildfire season, Ottawa spent $260 million on response and recovery measures within Indigenous communities.
That amount was far greater than the $145.2 million in the 2024 budget that Ottawa committed to spending over five years to build greater climate resilience.
The new funding will help Indigenous communities build greater climate resilience through climate-adapted infrastructure and mitigation strategies, such as fire-retardant cladding and roofing, as well as funding for emergency management coordinators within communities.
Funding will be administered through existing programs such as smart fire and the emergency management assistance program.
The 2024 budget continues the practice of not including in funding the expected financial burden of this year’s fire or flood seasons, the finance official said. Instead, the cost of recovery and emergency response for this year’s wildfire season will emerge in the Autumn Economic Statement.
Infrastructure and Housing Gap on Neglected Reservations
Ottawa is also committing $918 million over five years, starting in 2024, to close the First Nations, Métis and Inuit infrastructure gap, some of which could be used for climate mitigation, a senior official said. finance.
However, development will be at the discretion of First Nations, Métis and Inuit leaders, the official said. Some may want to invest in climate-friendly infrastructure, while others may choose to build as many homes as possible.
The investment contributes in part to closing the infrastructure gap by 2030, as promised by Indigenous Services Minister Patty Hajdu. However, it is less than the $349.2 billion a recent report from the Assembly of First Nations said it was necessary.
Meanwhile, another $75.1 billion is needed to close the infrastructure gap in Inuit Nunangat and $2.7 billion for Métis communities, according to a report by CBC News.
“As much as municipalities, cities and other communities are facing difficulties, our people have been facing this for a long time,” said Akwesasne grand chief Abram Benedict. Canadian National Observer ahead of budget.
In Ontario alone, about $58.9 billion is needed to close the infrastructure gap in reserves by 2030, a gap that is among the widest in the country.
“First Nations in this country had hoped to see significant investments in infrastructure within reserves,” Benedicto said in a statement after the budget. “Today’s budget fell far short of what is required to deliver on that promise.”
Three new parks
Three new parks have also been established with continued funding in this year’s budget. They include the Pituamkek National Park Reserve in PEI, a new national urban park in Windsor, Ontario, and a national marine conservation area for British Columbia’s Great Bear Sea.