Designation for sound financial management enables lower-cost financing for first nations development projects
By Don Cayo, Vancouver Sun
While native leaders and federal bureaucrats will continue to fight about which of them is least incompetent to handle the mil-lions of dollars it takes to run the destitute reserve at Attawapiskat, Ont., three B.C. bands are poised to reap the rewards of
The Songhees band in Victoria, the Tzeachten band in Chilliwack and the Osoyoos band have distinguished them-selves as the first three reserves in Canada to win First Nations Financial Management Board certification. This is not merely a plaque on the wall – it’s a designation that will enable them to borrow money for infrastructure projects on the same basis as other municipalities.
This is a big deal for two reasons. First, governments can issue bonds, which effectively means borrowing at lower interest rates than other institutions.
“This gives us access to a greater source of capital at far better rates to build new infra-structure and attract more public and private sector development on our reserve,” said Osoyoos Indian Band Chief Clarence Louie in a news release announcing his band’s certification.
But even more important than the interest rate is the ability this will give the certified bands to compete with other jurisdictions that have long had much easier access to capital.
Research published when the federal First Nations Fiscal and Statistical Management Act was passed six years ago nails down the magnitude of the disadvantage reserves face in trying to attract development capital.
A typical first nations com-munity must commit three times as much revenue as a non-native municipality needs to finance the same amount of infrastructure, it found. More-over, once the infrastructure is in place, it typically attracts only about a third as much private investment.
I suspect that fast-on-their feet bands – and B.C. has several – have done better than this dismal average, especially in attracting private investment to go-getter reserves such as Osoyoos. But as other bands obtain certification, there’s a very real prospect of turning around this traditionally weak performance.
Christina Clarke, the property tax administrator for the Songhees, told me in an inter-view that, as part of the certification process, her band revamped its property tax sys-tem to bring it into line with the practices in surrounding municipalities. It already purchases some services from them.
What these two things mean, she said, is that businesses scouting for a site will find on Songhees land both a tax sys-tem and a level and quality of services that they are familiar and comfortable with.
Meanwhile, the band will have access to cheaper borrowing for its smaller infrastructure projects such as road repairs, as well as a big new multi-purpose building that will serve as an administrative, medical and social centre for the band.
Brian Titus, the chief operating officer of the Osoyoos band, said the new borrowing options will be particularly useful as the band moves beyond the first phase of its 10-year plan to develop its 45-hectare Senkulmen Business Park. The band has already invested $4.5 million in the site, which is intended to eventually provide a home for up to 40 business tenants and 1,000 new jobs.
Among other developments, the band is in contention to have a new provincial correctional centre for the Okanagan located on its lands.
dcayo@vancouversun.com
Blog: vancouversun.com/economy
http://www.vancouversun.com/business/bands+reap+certification+rewards/5927566/story.html