NIEDB Recommendation Letter: NIES Bank of Canada

Dear Ms. Rogers:

It was a real pleasure to meet with you and your Bank of Canada colleagues on October 6. It was a collegial and productive discussion, which I hope helps the Bank of Canada become an even stronger advocate for economic reconciliation within the Canadian context.

We were very happy to learn the Bank of Canada has shared the National Indigenous Economic Strategy (NIES) widely within your organization, and that you are using it to inform your forthcoming Reconciliation Action Plan. The NIEDB stands ready to review a draft of this plan as it becomes available, and will be happy to provide input as it evolves. In relation to the NIES, as stated in the Call to Economic Prosperity 31 the Bank of Canada has a role to play in ensuring that public servants understand the history of this nation, and the critical importance of economic reconciliation:

We look forward to hearing which specific Calls to Economic Prosperity will inform your own strategic planning, and take this opportunity to reiterate that the Bank of Canada could take a leadership role in the implementation of the following Calls to Economic Prosperity:

#28 Recognize and measure the Indigenous contribution to Canada’s prosperity and work towards increasing Indigenous economic growth.

#81 Enhance and strengthen existing Indigenous financial institutions and Indigenous economic development and sectoral organizations to build Indigenous economic capacity.

#82 Conduct research and develop case studies focused on successful Indigenous community projects.

#84 Reform government policy and legislation to remove all barriers to Indigenous access to capital.

#90 Research and action the mechanisms that will stimulate Indigenous economic prosperity.

#93 Create an Indigenous Business Development Bank or intermediary for Indigenous finance.

#96 Require that all public servants receive mandatory training on Indigenous businesses and Indigenous procurement mandates.

In regard to the issue of Indigenous representation at the Board of Directors level, we trust you will pass along our recommendation to require such representation to Governor-in-Council, supported by the fact that the Reserve Bank of New Zealand (RBNZ) has 3 Maori representatives on their Board.

We also hope to hear back from you on progress regarding some of the immediate actions that could be taken by the Bank of Canada in support of economic reconciliation, including:

• Modifying the Bank of Canada Fellowship Program to include Indigenous-specific research in fields related to the Bank’s core functions.
• Updating the mandate of the Bank of Canada’s Indigenous Advisory Circle to include advice and guidance on operational matters.
• Expanding mentorship opportunities for Indigenous youth
  seeking experience in the financial and regulatory sectors.

Finally, we call upon the Bank of Canada to add your voice to our call for increased support for Aboriginal Financial Institutions (AFIs). Autonomous, Indigenous-controlled, community-based financial organizations, these institutions are key to supporting the growth of Indigenous economies across Canada. AFIs provide developmental lending, business financing and support services to First Nations, Métis, and Inuit businesses in all provinces and territories.

The AFI network plays a critical role in filling the financing gaps and unmet needs faced by Indigenous entrepreneurs. AFIs make loans that conventional financial institutions cannot, and have become experts in risk assessment, mitigation, and management for Indigenous entrepreneurs and communities. Although AFIs take on more risk than conventional commercial lenders, annual loan losses averaged only 2.1% in 2019-20. As we noted, most AFIs have loan limits of $250,000 due to the limited availability of capital. But that limit does not realistically cover the cost of a commercial building or major piece of equipment, which significantly restricts the AFI’s ability to support business growth.

In addition to increasing the amount of capital accessible by the AFI network, more needs to be done to increase access to more competitive, marketdetermined borrowing rates.

The NIEDB looks forward to continuing to work with you to address economic reconciliation within Canada.

Yours sincerely,

Dawn Madahbee Leach
Directrice général
Le Conseil national de développement économique des Autochtones