Accessing business loans has historically posed challenges for Indigenous peoples; however, a trend is emerging wherein First Nations are transforming into financiers themselves. Indigenous-led ventures like Cedar Leaf Capital, which launched in October of last year, and First Nations Financial Markets, established earlier this month, are setting an example of this shift. These majority-Indigenous owned firms are integrating into the capital-raising ecosystem, operating as investment dealers that connect companies seeking funds with investors purchasing bonds or equity.
Clint Davis, an Inuk from Labrador and the CEO of Cedar Leaf, emphasized the underrepresentation of Indigenous peoples in capital markets. The emergence of such organizations like Cedar Leaf is not only promising for Indigenous economic participation but also aims to bolster Indigenous capacity within the financial sector. Notably, Cedar Leaf features an all-Indigenous bond trading team, thereby directly contributing to economic development through employment opportunities.
Cedar Leaf Capital has already engaged in 54 bond issuances exceeding $41 billion. A significant deal involved raising $715 million to enable 36 First Nations in British Columbia to acquire a 12.5 percent stake in Enbridge’s Westcoast natural gas pipeline in May. This transaction marked the first usage of the Indigenous loan guarantee program, designed to reduce interest rates on loans through federal backing, illustrating a growing Indigenous financial ecosystem that also includes the First Nations Finance Authority, created almost two decades ago to assist member nations in obtaining lower interest rates by pooling their resources.
Cedar Leaf's collaboration with the First Nations Finance Authority is evidenced by its participation in the issuance of a 30-year bond in June, which raised $350 million to aid the Haisla First Nation in financing its majority equity ownership in Cedar LNG. This approach signifies a new paradigm in Indigenous fundraising, as highlighted by Scott Thomson, CEO of Scotiabank, who stated that Cedar Leaf Capital is reshaping the financial landscape to better reflect Indigenous interests.
Thomson also pointed out that, with the federal government's focus on resource projects, firms like Cedar Leaf provide a mechanism for Indigenous groups to take the lead in these developments. The potential for economic empowerment is tangible, as noted by Davis, suggesting that various initiatives are converging to create substantial opportunities for Indigenous communities.
Mark Podlasly, CEO of the First Nations Major Projects Coalition, noted the pressing need for alternative financing options that further empower Indigenous communities. Although Indigenous groups are using their own capital rather than pursuing grants, they still face various limitations in accessing necessary resources. He emphasized the importance of innovative approaches, both within capital markets and among Indigenous peoples, to achieve the ultimate goal of increasing economic empowerment.
Furthermore, the rise of Indigenous-owned investment dealers opens up new avenues for broader economic reconciliation with companies and organizations. Robert Van Belle, CEO of First Nations Financial Markets, described the anticipated integration of their firm in syndicates aimed at reconciliation with Indigenous peoples. He cited sectors like insurance and large institutions, which may not have established relationships with Indigenous communities, as potential participants in this economic shift.
First Nations Financial Markets was established through the acquisition of a majority stake in Agentis Capital Markets by six Alberta First Nations. It is also looking to hire Indigenous staff as part of its strategy to enhance representation within the capital markets. The Chief of the Sawridge First Nation, Isaac Twinn, commented on the transformative nature of the firm, noting that Indigenous decisions must now be made collaboratively rather than externally imposed.
The initiatives undertaken by Cedar Leaf and First Nations Financial Markets signify an exciting moment for Indigenous economic participation, heralding a period of renaissance for Indigenous communities. Cedar Leaf's immediate goals include securing additional private and government partnerships as it navigates through its inaugural year of operations, reflecting a significant shift in the dynamics of Indigenous involvement in the financial sector.
