RoadMap Project: An Indigenous-led Paradigm Shift for Economic Reconciliation

Geordie Hungerford:

It's really meant to provide this optional pathway for First Nations from dealing with poverty, to beginning to think about managing wealth and opportunity for indigenous peoples.

Michael Torrance:

Welcome to Sustainability Leaders. I'm Michael Torrance, Chief Sustainability Officer with BMO Financial Group. On this show, we will talk with leading sustainability practitioners from the corporate, investor, academic, and NGO communities. To explore how this rapidly evolving field of sustainability is impacting global investment, business practices, and our world.

Speaker 3:

The views expressed here are those of the participants and not those of Bank of Montreal, its affiliates, or subsidiaries.

Sarah Morris Lang:

September 30th, 2022 marks Canada's second National Day for Truth and Reconciliation. Deemed a federal statutory day to recognize the devastating impacts of residential schools and to honor its survivors. It reminds us of the need to educate ourselves about Canada's history with indigenous peoples and the actions still required to establish justice and advanced healing for harm done.

Sarah Morris Lang:

In 2021, the location of unmarked graves of child victims on the grounds of residential schools jolted many non-indigenous Canadians to awareness of our country's systematic, and violent attempts to erase indigenous culture and identity. Residential schools were just one of many inventions of the Indian Act, designed to erode inherent rights entitled for the purpose of land and resource appropriation.

Sarah Morris Lang:

While the resilience and cultural vibrance of the varied indigenous peoples across Canada is increasingly visible, the effects of colonization in these populations is still evident through disproportionate rates of poverty, poor health, and other negative outcomes for First Nations, Inuit, and Métis people. This has ripple effects for all Canadians.

Sarah Morris Lang:

One way Canada is working to remediate this harm is through the federal government's 2021 passing of Bill C15. A commitment to harmonize all federal laws with the principles outlined in the United Nations Declaration on the Rights of Indigenous People. There is a commitment to do this work over the next several years and in collaboration with indigenous peoples across the country. It's an enormous undertaking, but it's very promising. Where do we go from here?

Sarah Morris Lang:

My name is Sarah Morris Lang, and I lead social equality related initiatives for BMO Global Asset Managements Responsible Investment team. I am grateful to live and work in Toronto within Treaty 13 area on the traditional territories of the Mississaugas of the Credit, the Anishinaabeg, the Chippewa, the Haudenosaunee, and the Wendat Peoples.

Sarah Morris Lang:

Today it is my great honor to speak with the First Nation's Financial Management Board CEO, Geordie Hungerford. And Data and Analytics Manager, Shawn Blankenship about the Roadmap Project. The Roadmap Project is an innovative indigenous-led vision and strategy for implementation of the Universal Declaration on the Rights of Indigenous Peoples in Canada.

Sarah Morris Lang:

It provides an optional path for indigenous groups to move away from the Indian Act through the provision of enabling tools and resources to enhance self-determination, own source revenue generation, more equitable public and private partnerships, and enhance socioeconomic wellbeing. Thanks so much for being on the show, Geordie and Shawn, and for helping us mark Canada's second National Day of Truth and Reconciliation.

Geordie Hungerford:

Thanks for having us.

Shawn Blankinship:

Yeah. Great to be here.

Sarah Morris Lang:

Before we dive into questions about the Roadmap Project, I'd like to help the audience get to know you both and your organization a little better. Geordie, can you tell us about how your background informs your work as the CEO of the First Nation's Financial Management Board? And what drew you to the FMB in the first place?

Geordie Hungerford:

Sure. Well, [foreign language 00:04:06]. Geordie Hungerford. [foreign language 00:04:08]. My ancestry's Gwichʼin, First Nation of the Arctic, up in the Northwest Territories, Yukon and Alaska. And I'm also British Irish.

Geordie Hungerford:

As a CEO of the First Nation's Financial Management Board or FMB, which is a federal indigenous led institution. I was a securities regulatory lawyer, I was an investment banker, and a management consultant. I've also represented my own Gwichʼin nation on the Arctic Economic Council and on our development corporation board.

Geordie Hungerford:

And so having this diverse background, I think it gives me a perspective and an ability to draw from a whole bunch of different skills. I first got to know FMB when I was on the board from 2015 to 2017, and a friend of mine had recommended that I apply for that position. And when I was there, I really bought into our chair, Herald Cala's vision for how to build financial and administrative capacity in First Nations, in order to create social and economic development.

Geordie Hungerford:

And a lot of the thinking is based on what's called the Harvard Project in the US, which looked at success factors for Native American tribes. And so we're taking some of those principles and adding our own, and being able to go and implement things that would be more difficult to do in the US, and implementing them successfully. And so we've evolved to become a thought leader on economic reconciliation and a United Nations Declaration on the Rights of Indigenous People, or UNDRIP.

Sarah Morris Lang:

Fantastic. Thank you for that. And, Shawn, I know you also have deep experience in accounting and consulting. Can you share with us how this informs your work as the data and analytics manager at FMB? And what you're most passionate about in your work?

Shawn Blankinship:

Yeah, definitely. Prior to working at FMB, I worked in accounting public practice. So I would work on the year end financial statements with a number of First Nations communities. So I've been able to work directly with numerous First Nations. And really see on the ground there's a lot of great insight that can be gained into fiscal policies and economic activities that First Nations are undertaking.

Shawn Blankinship:

That's how I kind of got into the space of data and stats in the indigenous context. And what I'm most passionate about is the ability to use this type of data and stats to really advance forward practical policies that have a benefit for First Nations communities and First Nations members across Canada.

Sarah Morris Lang:

Fantastic. Let's talk about the Roadmap Project. This past May, the Fiscal Management Act Institutions, published the first chapter of the Roadmap Project and it laid out the vision and strategy to advance economic reconciliation in Canada. Could you tell us a little bit about how the Financial Management board fits into the wider group of the Fiscal Management Act Institutions?

Geordie Hungerford:

Yeah, so there's three institutions, and hopefully soon to be four, that were created under a piece of legislation called the First Nation's Fiscal Management Act. And the dream of that law was to provide First Nations with support and tools to strengthen their communities and build their economies.

Geordie Hungerford:

So First Nations can choose whether or not to participate under the FMA, the Fiscal Management Act. And so we begin to work with them on passing bylaws with respect to financial administration and then work with them to develop their financial capacity. And eventually if they choose to, we can certify that they have good financial management in place.

Geordie Hungerford:

Now, the Roadmap itself was created to answer the question, how do you create economic reconciliation? What programs and institutions are needed? And what systemic change needs to happen? Because it's not just about throwing money at the problem. And the Parliamentary Budget Office has released a report in the last few months that looked at the increased money being spent by the indigenous ministries, but found very little change in outcomes.

Geordie Hungerford:

So what we're talking about is an indigenous led solution like the Harvard Project talks about. Indigenous led solutions lead to better outcomes for communities, where they can lead and they can own their own solutions. So we did that story about the fictional community called Moose Rapids. And it highlights basically the need and the outstanding gaps that are occurring right now with communities, particularly remote communities.

Geordie Hungerford:

Looking at the lack of appropriate housing, water treatment, roads, high speed internet. The lack of in community schooling and healthcare. And the lack of ability to implement needed infrastructure in a timely way that can be maintained for the whole life cycle of the infrastructure.

Geordie Hungerford:

But we look at how this community, under the proposals that we have in Roadmap, can develop and change and flourish and move beyond some of the negative situations that are going on in the community, to grow and develop capacities in ways that sustain the community. And then through this economic development, the community will become more fully connected with the rest of the country and the world.

Geordie Hungerford:

The community will be healthier. It will help in the healing process that residential schools and colonialism has had an impact on communities. So it's really meant to provide this optional pathway for First Nations from dealing with poverty, to beginning to think about managing wealth and opportunity for indigenous peoples.

Shawn Blankinship:

Great points there. And I think kind of utilizing what we can do about it, kind of having that aspect of the so what? And where can we go from here? I think that's where data and stats can bring a lot of really great, great value for our local First Nations leaders and in policy makers.

Sarah Morris Lang:

So, Shawn, would you say that this fictional community, that this remote First Nations community really kind of embodies a lot of the recurring patterns you probably saw in your research?

Shawn Blankinship:

Yeah. I know particularly with some of the research, a lot of challenges specifically in remote communities. We can see issues of poor conditions for residential housing and that can lead to a host of other problems. It's important to recognize kind of where we're at, but also recognize that's not where we have to stay. That we can really identify the situation as it is and then identify policies to move forward and advance reconciliation.

Sarah Morris Lang:

So that's great. Then I wondered if you could provide an overview of the historical and current systematic barriers that indigenous people's in this country face?

Geordie Hungerford:

Canada has around 600 First Nations and indigenous groups. So situations and experiences can vary. So a lot of factors go into community situations, and these factors influence the choices that First Nations governments are able to make.

Geordie Hungerford:

Reflecting on the more remote communities, a lot of what you take for granted in a big city is not in the community. There may not be high schools, there may not be a medical person. There may be very poor internet, or it may be satellite based communications. Some of the communities may be fly in only.

Geordie Hungerford:

The communities are also recovering from over a century of policies that destroyed the language, the culture, the way of life. And that really undermined the confidence of the communities. The people themselves were restricted from voting. From going to university, or becoming a professional. From doing commerce through the pass system, where they had to get permission to leave the reserve. Or even hiring a lawyer to fight some of these injustices.

Geordie Hungerford:

And of course, with the residential schools, you're already familiar with the intergenerational effects of that. So communities such as this fictional community, the way that they are developed now, they have to rely on these short term program transfers from the federal government to try and meet their needs. So they have to come back every year and ask for money. And that's unlike any other government in Canada.

Geordie Hungerford:

So municipal, provincial, and federal governments, they can plan for several years out and they can borrow accordingly to meet their needs. But with the First Nations having to go back and ask for money every year, and we call this pay as you go, this means they can't plan. And it's very difficult to build infrastructure, schools, or clinics, or healing centers, and those all require multi-year funding.

Geordie Hungerford:

So FMB's heavily invested in providing optionality through the Roadmap Platform and the FMA, to give choice to nations and communities to support them in becoming more independent and enhancing their economic opportunities. And in time, they will develop more wealth in the community. And we need to think about how that wealth itself is being managed.

Sarah Morris Lang:

So this is really at the heart of the Roadmap, a new fiscal relationship, and it really is a major paradigm shift. Can you talk about the key pillars of the Roadmap?

Geordie Hungerford:

We have six main areas that we're focusing on. And we're hoping that this will be a platform for nations to help govern themselves and form true nation to nation partnerships with Canada. And so the first one's on data and statistics, which Shawn is a master at.

Geordie Hungerford:

Basically there's very little data right now on indigenous communities. People just do not know what is going on economically, and they don't know what the needs are in the community. If you don't know where you want to go, you're never going to get there. And so data and statistics are the sort of things that help you with determining that journey.

Geordie Hungerford:

We hope that the federal government will provide more data and statistics powers within us and the other FMA institutions, to be able to start to measure economic growth and economic needs and infrastructure needs in communities. Infrastructure is our next chapter, and that focuses on the infrastructure needs in communities. And particularly how do you finance them? How do you ensure that they're viable infrastructure projects?

Geordie Hungerford:

Right now, most of the infrastructure is being set by Ottawa and there may not be an understanding of local needs. There may not be an understanding of local weather conditions. And there may not be somebody on the ground that's able to go and maintain the infrastructure and ensure that it meets its expected life.

Geordie Hungerford:

And what we're advocating for is the creation of a new First Nations Infrastructure Institute that can assist nations in making decisions on infrastructure. Because as per the Harvard Project, if a community's owning the process, then there will be better outcomes. The third chapter is on economic development. Shawn, why don't you talk about the economic development and the jurisdiction chapters?

Shawn Blankinship:

So economic development really evaluates a number of themes. First is looking at a coordinating body that will be able to pull together a number of the resources and services from multiple indigenous organizations that are kind of in this space. To ensure that indigenous business owners and national businesses have the best options to compete within the national and international economic scene.

Shawn Blankinship:

Another very important area to look at is access to capital. There's often significant financing gaps where an indigenous entrepreneur may have a great idea, but they won't be able to get the loan simply because their business is located on a First Nations reserve land. We believe, and many of our clients believe, that having a greater access to capital will move forward economic reconciliation in a very meaningful way.

Shawn Blankinship:

Jurisdiction is a very important concept. Really looking at advancing First Nation's jurisdictions as well as fiscal powers for nations that want to pursue this. A common difficulty now is that First Nations may not have the ability to raise independent revenues in a way to fund basically the services and infrastructures that the First Nations communities need, to have really healthy and sustainable communities. So really advancing some concepts there, some possible new jurisdictional powers, as well as powers for raising independent revenue.

Geordie Hungerford:

Yeah. And our final two chapters, Strength Through Working Together, which really focuses on communities coming together to get economies of scale, be it in service provision or in economic development opportunities. So we look at our friends out on the East Coast in the Micmac Nations over there, and they've come together to create the Atlantic First Nations Water Authority.

Geordie Hungerford:

So instead of having their water being managed by Indigenous Services Canada, they've created an independent organization of around 15 First Nations getting together and managing their own water. And we see this as an opportunity for all sorts of opportunities for devolution out of Indigenous Services Canada for different kinds of authorities, be it an infrastructure authority, a health authority.

Geordie Hungerford:

We also look at opportunities for nations to get together to use their rights and create businesses. So on the East Coast, the Atlantic First Nations got together and borrowed $250 million through the Finance Authority and another $250 million elsewhere. They partnered with a business on the West Coast and bought the largest seafood, integrated seafood business on the East Coast, Clearwater Foods. So those nations are now part of a billion dollar business and creating opportunity for their people.

Geordie Hungerford:

We also look at governance and the opportunity to use the First Nations Financial Management Board and our Financial Management System Certification as a way to give comfort to particularly the government of Canada and the provincial governments, to start to share more revenue opportunities with the nations and to share more fiscal powers. Because we think that to have real nation to nation relationships, you need to have some degree of jurisdiction. And jurisdiction means that you have the ability to have fiscal powers and also the ability to pass laws. So a sharing of wealth and a sharing of power is really what's required in order to build nations.

Geordie Hungerford:

And this really comes back to the UN Declaration on the Rights of Indigenous People, which calls for self-determination for nations. And it's really different than the colonial system, under which Canada has operated for the last 150 years. And now we're looking at nations being able to make their own decisions. And when there are decisions made by Canada or the province, that they are consulted and cooperated with. So we think through these six chapters, that nations will be able to advance and begin to share in that prosperity of Canada.

Sarah Morris Lang:

Wow. So this is really incredible. It really is a massive change. We're at a stage now where we really do need to move much more quickly. Can you tell us how many First Nations right now are engaging with the FMA Institutions? And who is this Roadmap for?

Shawn Blankinship:

We have over 320 First Nations that we currently scheduled to the Act. Many of these First Nations have financial administration laws and are working towards a certifications under the FMB. It's important always to note that optionality is a very important piece of the work of the FMA. That's both FMB and our sister organizations.

Shawn Blankinship:

Some First Nations governments are more interested in, let's say, pursuing financing options through the First Nation's Finance Authority. But they might not be interested in taxation, or it could be the other way around. So at FMA, really what we're about is providing those options to the local First Nation leaders, so that they have the greatest options to benefit their own community.

Sarah Morris Lang:

Thanks, Shawn. And so exercising that option, as you pointed out, greater access to capital. Is that one potential means by which that could happen?

Shawn Blankinship:

Yeah, definitely. In order to obtain access to the financing for the First Nation Finance Authority, they would pursue and achieve Financial Performance Certification through the First Nation's Financial Management Board. And then they would have a range of financing options through the First Nation's Finance Authority.

Shawn Blankinship:

And there are a host of examples. First Nations can pursue it for their own infrastructure, if there's business ventures that they're wanting to participate in. That financing really opens a lot of doors.

Geordie Hungerford:

And I'd just add that it's similar with the Roadmap. So with Roadmap, we're creating a lot of ideas, a lot of opportunities, a lot of dialogue. But we know that not all nations will necessarily be interested in every idea and every part of Roadmap. But we just want to increase that optionality and find groups of nations that want to move forward with certain kinds of economic development opportunities.

Sarah Morris Lang:

And so where are you at right now? What's the level of engagement by the federal government in regards to these ideas?

Geordie Hungerford:

Well, we certainly have a lot of meetings ongoing with many of the ministries. And there seems to be a lot of interest, a lot of uptake on both the political side as well as the government side. And so I think there's a lot of interest to see what the other chapters of Roadmap are.

Sarah Morris Lang:

One of the Roadmap's proposals is related to the monetization of federal funds to enable the raising of finance through public markets to expedite major projects. Are you able to comment on that idea?

Geordie Hungerford:

Yeah. So the way that it works right now is that, as we said, nations get funded on an annual basis. But the FMA through the First Nations Finance Authority has allowed nations to go and stack revenue, or monetize revenue. And be able to borrow against a future stream of expected revenues from both their own businesses as well as from the Government of Canada.

Geordie Hungerford:

There are certain government flows that are not able to be monetized right now. So infrastructure, for example. Infrastructure money that's contributed by the Government of Canada is not permitted to be monetized at this time. So we hope sometime soon that the Government of Canada will permit the monetization of infrastructure. So that nations can directly borrow against the flow of money and be able to build their infrastructure more quickly.

Geordie Hungerford:

But there's other kinds of financing that nations are going to need to be looking at going forward. Nations are going to need venture capital, they're going to need working capital, they're going to need project financing. And so there's a tremendous opportunity here. If you think about any kind of resource development, it's going to be taking place on First Nation territory, if it's the Ring of Fire, or metals that are required for the transition to a green economy.

Geordie Hungerford:

If it's rights of way with respect to roads or with respect to telecommunications or pipelines, these all cross through indigenous territory. And so I think there's an expectation going forward of a sharing of the opportunity with the nations, and so there's going to need to be a financing component to that.

Sarah Morris Lang:

Right. I find this really fascinating just how everything is so connected. I know at BMO, we do engage with a lot of companies that we're invested in and talk about board diversity. And we have a lot of work to do in getting that indigenous representation in those kind of leadership positions. What are your thoughts, Geordie, in regards to what needs to happen?

Geordie Hungerford:

Yeah, it's an interesting question. I mean, there's been a lot of reporting down through the Canada Business Corporations Act for reporting issuers. But the federally regulated financial institutions weren't part of that reporting. But some of it was pretty shocking.

Geordie Hungerford:

So the most shocking statistic was that there was no indigenous people that were in senior management in ETSXV listed issuer. And most of them you presume are in mining and oil and gas. So what does that tell you about the ability for those businesses to be ready for reconciliation?

Geordie Hungerford:

But certainly across financial institutions, there's not a lot of representation on the boards. There's not a lot of representation in senior management. And a lot of the indigenous people are more on the lower kind of entry level positions within the bank. And so I think there's going to be a need over time to see more representation, more of the executive and board level. And in some of the areas of the bank that traditionally indigenous people are less familiar with.

Geordie Hungerford:

So most people are familiar with retail banking, but you're talking about investment banking or asset management, there's not as great an understanding within the communities. And so I think there's a need to have more indigenous people represented in those areas. And with that, I think there'll become a greater understanding of ESG type issues, and double materiality issues that relate to having a inclusive society, having indigenous people being represented within organizations.

Sarah Morris Lang:

Can you comment a little bit on the consultation you did with First Nations to develop the Roadmap?

Geordie Hungerford:

Yeah. It's basically a distillation of decades of experience of leadership in communities. And so as part of this process, we went out and we talked to our 50 FMS, Financial Management System, Certified Nations. Talked to them about what this framework could be like, and we got an overwhelmingly good response.

Geordie Hungerford:

We also have a First Nations Leading the Way Conference every year, where we reach out to all of our clients. So all 350 odd nations are invited. We also, from time to time, meet with some of the chiefs and council when, particularly when they're at some of the regional meetings. It's been overwhelmingly positive and they've asked us to keep going. And this publication is really an ability for us to distill everything down and then float it amongst the communities and look for feedback.

Sarah Morris Lang:

So then on the private sector side, what can financial institutions and players like capital markets, asset owners, asset managers, commercial banks, do to kind of be ready to better support these efforts and make this a reality?

Geordie Hungerford:

Well, I think one thing is to understand the value of the Financial Management System Certification in terms of mitigating risk for First Nations. With respect to the economic development that's going on, there's a huge potential for the indigenous economy to jump billions of dollars a year and become a significant force in Canada.

Geordie Hungerford:

And so that's going to need some financing and it's going to need some cooperation with various financial institutions. But these nations are going to need everything from regular commercial banking through to more complicated types of banking products and advice.

Sarah Morris Lang:

Shawn, do you have any thoughts?

Shawn Blankinship:

I think a key takeaway is that collaboration is really very essential. And that's collaboration with the private sector, with banking institutions, with governments, to work with First Nations governments and First Nations businesses to really level the playing field. So that when First Nations have a really good business opportunity, that they can pursue it and have the confidence that these other institutions are backing them up.

Sarah Morris Lang:

While we're talking so much about finance, it's really all about wellbeing in moving forward and healing and people's day to day lives. I really want to thank you both for speaking with me today and helping us mark the Second National Day for Truth and Reconciliation in Canada. And I think we're going to see some good things happening.

Geordie Hungerford:

Well, thank you very much. [foreign language 00:28:01].

Shawn Blankinship:

Thank you so much for having us.

Sarah Morris Lang:

Thank you.

Michael Torrance:

Thanks for listening to Sustainability Leaders. This podcast is presented by BMO Financial Group. To access all the resources we discussed in today's episode and to see our other podcasts, visit us at BMO.com/sustainability leaders.

Michael Torrance:

You can listen and subscribe free to our show on Apple Podcasts, or your favorite podcast provider. And we'll greatly appreciate a rating and review and any feedback that you might have. Our show and resources are produced with support from BMO's Marketing Team and Puddle Creative. Until next time, I'm Michael Torrance. Have a great week.

Speaker 3:

The views expressed here are those of the participants and not those of Bank of Montreal, its affiliates, or subsidiaries. This is not intended to serve as a complete analysis of every material fact regarding any company, industry, strategy, or security. This presentation may contain forward looking statements.

Speaker 3:

Investors are cautioned not to place undue reliance on such statements as actual results could vary. This presentation is for general information purposes only and does not constitute investment, legal, or tax advice, and is not intended as an endorsement of any specific investment product or service. Individual investors should consult with an investment tax and/or legal professional about their personal situation. Past performance is not indicative of future results.