The Globe and Mail reports that Indian Affairs Minister Robert Nault will introduce legislation this fall aimed at helping natives create their own economic stability and independence by allowing them to borrow money from international markets.
The goal of the package, a part of several initiatives made by Mr. Nault this year, is to let natives, as a collective, use a bond system to raise money, allowing them to develop better roads, sewage systems and to establish new businesses.
Two other, already announced plans are a land-management package — restoring bands’ authority to zone land — and a controversial governance package that Ottawa said gives First Nations more power over community decisions.
Mr. Nault said Thursday that helping aboriginals develop institutions on their lands means “you’ll see more business enterprises and more investment for First Nations.” The initiative has been led by natives themselves.
“We need the institutions that the rest of Canada takes for granted,” Manny Jules, First Nations spokesman for the package, said at a press conference in Ottawa. “Our institutions will bring the standards, certainty and capacity that our economies and investors need.” Bands will be able to opt into a pool, to be called the First Nations Finance Authority, if they choose to do so.
Eligible bands will then collectively borrow money on national and international markets. They will collectively guarantee each other’s credit.
The hope is that interest rates on the borrowed money will be substantially lower than the rates most bands face now. Ottawa will not back the bonds, which means taxpayers will not be on the hook if a band defaults.
Rather, Ottawa will provide the legislative authority for the bond system to get off the ground. The bands will borrow against future revenue, such as money that comes from the federal government, as well as property tax and stakes in some natural resources.
Formal consultations on Mr. Nault’s proposed First Nations Fiscal and Statistical Management Act have now begun, Mr. Nault said. He hopes legislation could be passed by next year. It would mean the creation of four public institutions to help run and support the bond system.
While the Assembly of First Nations has been lobbying hard for the collective borrowing package for years, some bands are expected to oppose the federal presentation, saying it will tread on treaty and aboriginal rights.
Others will be concerned that the system will exclude the poorest — therefore the neediest —of native bands because they will not meet the standards for budget accountability and taxation.