OTAWA –
The federal government is providing up to $5 billion in loan guarantees to help Indigenous communities invest in natural resources and energy products.
But when it comes to a promise to close what advocates say is a growing Indigenous infrastructure gap, Ottawa is more than $420 billion short.
As mentioned in last year’s autumn economic statement, the Indigenous loan guarantee in Budget 2024 allows communities to decide which projects to invest in.
The loans would be guaranteed by the federal government, ensuring Indigenous borrowers can get more favorable interest rates.
First Nations business leaders have long called for an Indigenous loan program to enable investment in oil and gas projects.
The First Nations Major Projects Coalition anticipates that Indigenous participation in the natural resources and energy sector could reach $525 billion in capital investments over the next 10 years.
Up to $50 billion more could be needed for indigenous capital financing, the coalition projects.
But the Federal Indian Act does not allow First Nations to put up their land or other assets as collateral, making it difficult to obtain financing.
“If Canada wants to ensure that Indigenous communities can fully benefit from future opportunities, they need fair access to affordable capital that meets their unique needs,” he said. document says.
Last year, Ottawa committed to lending affordable capital to Indigenous communities through the Canada Infrastructure Bank to help them buy stakes in infrastructure projects the bank is also investing in.
But the infrastructure bank is only mandated to invest in projects that drive initiatives such as clean energy, green infrastructure, broadband technology and transportation.
Similar Indigenous loan guarantee programs already exist in Alberta, Saskatchewan and Ontario, but some stakeholders argued the lack of a federal program led to jurisdictional loopholes that prohibited economic development.
But while Indigenous communities may be seeing gains in investment opportunities, the budget falls far short of closing the infrastructure gap.
A recent report from the Assembly of First Nations found that $349 billion is needed to close the infrastructure gap by 2030, a goal Ottawa had promised to meet.
To bring indigenous infrastructure on par with that of the rest of the country, an additional $135 billion would be needed for housing, $5 billion for digital connectivity and another $209 billion for other infrastructure, according to the report.
Inuit Tapiriit Kanatami, which represents more than 65,000 Inuit in Canada, also called for $75.1 billion over 35 years to support 115 projects and about $790 million annually for operations and maintenance over the next 25 years in its budget proposal to federal government.
The Metis National Council, which represents Metis people in Ontario, Alberta, Saskatchewan and British Columbia, sets its infrastructure requests at $2.7 billion.
But the budget only allocated $918 million over five years to Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada to help close the gap.
That $918 million includes $426 million for on-reserve First Nations, $370 million for Inuit communities and $60 million for Métis communities. The previously announced $4 billion over seven years was allocated to implement an urban, rural and northern housing strategy which the government says is currently under joint development with Indigenous partners.
Tuesday’s budget also includes $89 million to support increased road access, $175 million for First Nations emergency management and preparedness, and $467 million for First Nations and Indigenous-led policing. Inuit.
But the promised money still leaves a shortfall of more than $420 billion that the Assembly of First Nations warned could have dire economic impacts on the communities and people it serves.
“Without these funds, the infrastructure that First Nations communities across the country rely on will continue to deteriorate at an alarming rate,” the AFN report says.
“Without this investment, First Nations health, safety and community infrastructure will be in worse shape with each passing year.”
Ontario Regional Chief Glen Hare, whose jurisdiction needs $25.8 billion for housing, said last week that community members are being forced to live in overcrowded housing because they have nowhere else to go.
“People should never have to face the agonizing decision of choosing between living in overcrowded and unsafe conditions or abandoning their family and community,” Hare said.