2024-11-01 – CIBC’s role in investing in Indigenous communities – A recent interview with the Hon. Lisa Raitt

Robert Brant: Lisa, you’ve been distinguished leader, held several leadership roles in public and private service over the years. Coming out of the summit, what is your vision for the future of investment in Canada, in particular as it relates to investment in Indigenous communities?

Lisa Raitt: Yeah, well, thank you very much and I was delighted to be invited to come over and take part in the conference. We’ve been doing a lot of work in Canada about getting the word out that Indigenous peoples want to be part of a project, an equity partner in some cases, not in all cases. It really is up to the community how they want to proceed, but there is an obligation for free prior informed consent and with that comes the opportunity to have investment. The tricky part about it though, is in Canada it’s very difficult for Indigenous communities to get competitively priced capital in order to be able to participate in a project. And we’ve been kind of struggling with that here in Canada for a while. Governments have stepped in to provide some loan guarantees, but it really is the capital markets and the financial sector that have to start to play a much bigger role in making sure that we can flow the funds into these great projects so that they can partner with other corporations to build the actual infrastructure we need for this country to have long term economic growth. One of the one of the elders in the country always says that all roads or resources go through First Nations land and it’s very, very true. So we need to get it right. We need to make sure that the financing is there. So that’s Canada and now over here in the UK, why not let the world know what a great opportunity is, what a stable investment this is and and how Canadians are moving forward And Indigenous communities are looking for investment, not just from Canadians, but from around the world.

Robert Brant: Absolutely, because what is happening in Canada is unique in my experience to what is happening in the rest of the world as regards Indigenous involvement. And it’s really something we should be proud of. We’ve learned from past mistakes and I think we’re doing things a lot better. How do you see the role of institutions like CIBC in facilitating and supporting sustainable investment and development, in particular in Indigenous communities?

Lisa Raitt: Look, Indigenous communities have been using banks for a long, long time. There’s no question about it. And we have had great customers and clients along the way. It’s the capital markets that are getting involved now. And as you know, capital markets are a different beast, probably don’t have as much understanding of Indigenous ways, Indigenous cultures, indigenous approaches to to relationship building. So I think institutionally what we need to do is just take a breath and understand that it’s not run-of-the-mill. It’s a very different entity. And as a result, we have the obligation to serve our client best. And the way to do that is to understand exactly how to make sure that we’re interacting, that we’re bringing to the table the information that is needed and this that. The other part of it too, that I, I’ve learned is that pace is very different. Decision making takes a little bit longer because it’s more consultative and that the planning is for even generations and that you can’t force the timelines and the deadlines. And it’s not, it’s not necessarily a bad thing. You know, in our world, we’re always rushed, rushed, rushed trying to get things done quickly. But you have to meet the cadence of the client. And I think how financial institutions have to adapt is have that understanding.
I think one of the one of the takeaways for us as well is the importance of helping to build capacity so that the ability for Indigenous communities to, in their own space have the ability to do due diligence or judge whether or not a project is good if the deal is something good. Ideally, we’d like to get to a point where they’re doing all that in their own community instead of hiring advisors. So we have an obligation on building helping build capacity as well, which means hiring more people to work in capital markets.

Robert Brant: Lisa, can you provide some examples of successful collaborations between the financial sector and indigenous communities?

Lisa Raitt: You bet there are. They start slow, but they do come online and more and more projects are happening. So I’ll give you an example. There is a project, mainly these projects, Rob, are in the oil and gas space or in the resources space. And they’re the ones that are coming to fruition right now. And without getting into, you know, details, I would say that the examples are for in one instance where the company will lend the money to the Indigenous community and then they have a portion of equity, like 10 percent, 15% or something. A big difference. I think a game changer was the Clearwater Fisheries deal that happened in Nova Scotia and the Maritimes, Atlantic provinces where I’m from. It was John Risley, who owned Clearwater Foods, decided that he had known Chief Terry Paul for many, many, many years. And when John Risley decided he was going to sell, he knew that there was going to be Indigenous partnership in it. And the whole deal was pretty much structured around having making sure that Indigenous partnership was going to be part of and a significant part of this operation. The hard part is finding the money. So why it’s it was a landmark. It was it was a significant raise. They did partner with another private sector entity in order to do the deal, but they got it done. And it’s the kind of thing where the most important part of book the value of Clearwater Foods is the fishing licences that they hold. And the indigenous peoples hold many, many fishing licences in the in Atlantic provinces and they have a traditional right to fish the waters. And as a result, putting it all under one roof just made so much sense. And you know that those fishing licence are going to stay intact. They’re not going to be broken up and sold. And the reason being is that 7 generations of planning. And Chief Terry will tell you that right now, his people may be fishers and they may be in the plants, maybe running the plants, but eventually they’re going to be the CEO’s and the CFO’s, they’re going to be on the board. And it’s just, it has to build the capacity throughout the community. But you know, from a social point of view, imagine knowing that you are, you know, a big part of this massive conglomerate that one day as a kid growing up a member to or Escazoni, you can go and work for that incredible, incredible corporation and still be working with your your people and living in your community. It’s it’s a wonderful story. So I look at that as the, I think that was the very first deal where people went, Huh, Well, that was interesting.

Robert Brant: Yeah, Lisa, we’ve seen different models over the years used for financing in Indigenous communities. We’ve seen things like impact benefit agreements and jobs promised, sometimes royalties paid. In Canada, there are some unique structures being used. You mentioned equity. What do you see as the future as between the different models that are out there?

Lisa Raitt: Oh, I think for the communities that choose to want to have an equity stake in a project that runs through their lands, that the markets are going to respond in the most efficient way that they can. So I’ll give you an example. Fort Mackay, for example, bought some assets from an oil and gas company. They didn’t have to go for a loan guarantee. They actually went out to the market and they ended up doing a bond and they they were able to raise the money for, for other projects. The sheer size of it means that you may have to go to the First Nations Financing Authority. They can help you with that or you get a guarantee from either your provincial government or your federal government or the both of them. And then you use that to try to go out to investors in the market and see who’s interested that way. So a lot of these are working their way through the system right now. But I have to tell you, talking to my partners at CIBC, it’s not as difficult as you may think. You know, our goal is to get the best price for the client and make sure that they’re not going to be burdened by too high a cost on the on the capital. But it seems to be working. There’s always going to be tweaks that are going to be needed from any federal policy or provincial policy and we’re there to help communicate that in the most appropriate way.

Robert Brant: It does sure seem like the days of a non Indigenous business wanting to do a project on Indigenous lands, just leasing the land or just promising some jobs or some training is probably not good enough. And we at McCarthy Tatro are seeing different models used. Equity isn’t for everybody. There are risks and challenges. Debt is sometimes expensive, but the key now I think is it’s a choice and there’s a menu of choices available for Indigenous communities and the financial markets are there to support those choices.

Lisa Raitt: I agree. The other point too, Rob, when you mentioned choice, it’s such an important word because sometimes you can learn great things from the community about where your project should be sited or what route it should take and where certain things should happen and how they should happen. And that is as important, I think, for Indigenous communities as is the the monetary side of it, the revenue side of it. They want to make sure the project is done right. They are the trustees of the land and they take it very seriously. And as a result, they want to know at the beginning what the project looks like. And it’s not because they’re nosy and it’s not because they want to get in your business. They actually can add value and help. And especially in Canada, where environmental assessments can take a long time, why wouldn’t you want to start by going and speaking to the Indigenous community and just say this is what we’re thinking of, What do you think? And build the relationship from there. Like I said, we don’t have to rush and do everything immediately. Hopefully what will happen is you’ll end up having a shorter time because you took the chance or you took the time to do the work up front as opposed to ending up in court at the back end of a project.

Mark Magnacca: Just on that, Lisa, so you know, Canada is one of the top D7 destinations for FDI. How do you think in this environment that we are, with onshoring and French showing, how will this role that the indigenous peoples are now playing in the economic development of Canada, not just their communities because it’s of the country as a whole? How do you think this will affect the perception and the attractiveness as a destination for FDI?

Lisa Raitt: So it’s, it’s really interesting what’s happening. I can’t speak or Indigenous communities, I’ll let them speak for themselves. But what they have told me in my observation is in a lot of cases, foreign direct investment is coming right into the communities and bypassing the Canadian government. Quite frankly, they’re not going to the Crown in order to seek permission to go and speak to the Indigenous community. They’re going directly to the Indigenous community. So part of the role that I can help play at CIBC is something like this, creating these kind of connections here in the UK that allow me to say to somebody in British Columbia who is looking for investment, where do I start? How do I reach out to other people without going through the government? I can say, well, look, you can come, here’s the platform, come here and, and they can help you and, and try to figure out what, how to get in front of the right people. Because, you know, the part of the work that’s being done right now is the work that is necessary for foreign investment to take a, a real good glance at projects. And it has to do with creating strategies and creating programmes. So in British Columbia, for example, the First Nations there have a critical mineral strategy that they’ve put together and they want to travel with it and they want to explain it to companies and investors in other countries. And now they have a path that they can follow by being able to go through a forum like this that isn’t necessarily connected to the government. Going to the government’s not a bad thing. And Jonathan Wilkinson, who is the Minister of Natural Resources, says that every time he goes to a foreign country to talk about LNG, he is going to ask for an indigenous delegation to come with him to put the people together, which makes a a lot of sense. And I see no reason why any government going forward would not do exactly the same thing. It helps facilitate trade. But the the reality is, is that capacity needs to be built, strategies have to be in place, and then you need root in order to be able to facilitate and then you go from there.

Robert Brant: Yeah, the law is catching up with Canadian law adopting the UN Declaration on Rights of Indigenous Peoples. But the business world, and I think Indigenous communities are already there. The fact is, whatever the law says, if you want to get a project done, if you want to invest in a business that’s going to have an impact on an Indigenous community in Canada, you will need that community’s consent. Bit surprising. We heard at the summit of instances in the past where projects, pretty big projects on Indigenous lands proceeded without consent. And our audience was familiar with some of the protests and court cases. But hopefully the lessons have been learned and as you said, free prior and informed consent is the way of the future and the only way to get things done.

Lisa Raitt: Yeah, Yeah, exactly.

Robert Brant: Lisa, we’ve heard a lot at the summit about the importance of prior and informed consent in a different way of doing business with Indigenous communities. What advice would you offer the next generation of business leaders who want to engage in a respectful and productive way with Indigenous communities?

Lisa Raitt: Wow, that’s a really good question. The what’s interesting is that the current like, I guess our, I guess we’re saying that we’re old, Rob, but the current people of my age who are, who are the, who are involved in businesses in Canada, they’re not close minded to this whatsoever. If you look at any of the resource companies, they definitely want to have Indigenous participation and and equity in partnerships. Like they can learn from it. If you’re not thinking in that way, then you’re really not going to be doing any kind of development in Canada. I mean, let’s just put it, I think very frankly, because it’s every piece of land in this country is going to have either a claim on it or potentially a claim on it. And as a result, want to make sure that you’re being astute in how you approach it. So the next generation, man, I like you said it. I think we said prior to starting this interview, Mark, I mean, as Canadians, we weren’t taught a lot about reconciliation. We weren’t taught at all about reconciliation. Next generation has and it’s part of their life and they get it. And I think what we’re going to see, hopefully we’re going to see is that the next leaders, quite frankly, are Indigenous and that they, you know, we have more, more into Indigenous people on boards, that we have more Indigenous women in the C-Suite. That’s the kind of thing that I’m going to be looking for is to see the the rising through the ranks of people. But it does intake is extremely important, as you know. And we have to make sure that we create, I guess a path from post secondary education into jobs that make sense and that we can train the next leaders in companies and institutions. So I think what I would say to the next generation of developers is you’ve been taught the importance of economic reconciliation. We all agree that’s our path forward and it’s relationships are incredibly important and form them and and abide by them and build trust. And you know what, we could do with a lot more of that kind of relationship building in this market than possibly the old ways of being so cutthroat. But you know, I’m saying that as a former politician, not somebody who comes from financial institutions. And I’m sure people are rolling their eyes at my Pollyannish ways. But look, I think that is the secret sauce is to develop relationships over a long period of time and do deals that makes sense for both parties.

Mark Magnacca: I think. So you’ve been here in the City of London at Mansion House where the event was held and obviously the city is about relationships completely. What do you think the the audience here who was primarily British. What were they their key takeaways or what key take aways did you leave with them after some of your discussions that you’ve had over here where obviously CIBC has a presence as well?

Lisa Raitt: So it’s interesting because there’s oftentimes this fear of not knowing how do I, how do I engage? Like there’s a mystery around how do I engage with Indigenous communities? And I think I, I hope what what the attendees have heard is that we can point to documents, we can point to places, we can point to websites where you can go to educate yourself on the best way to approach. And, and there are places where you can seek advisors in Canada who are going to bring you through the process as well. I think the fact that they should know and understand that having Indigenous partnership or seeking, you know, free informed prior consent is not an impediment to business. That would be the the biggest takeaway. It’s part of doing business. It’s due diligence. At the end of the day, it’s just at the very front end and it’s, it’s an okay thing, nothing to be afraid of. It’s normal. And once you have the tools and you know how to do it, then you know, becomes pretty simplistic. And boy, I will tell you that going back to the Clearwater Foods example, that strong relationship between two men in Cape Breton, Nova Scotia, that really was what drove this incredible deal for the for the Migmont in Atlantic Canada.

Robert Brant: Lisa, as vice chair of Global investment banking at CIBC Capital Markets, how is CIBC positioning itself to support what is going on? And are there any particular initiatives your out of many?

Lisa Raitt: Many. First of all, the bank writ large has a reconciliation action committee and I Co chair it with Jamie Lickers who’s Indigenous and she’s the Senior Vice President on Indigenous markets. And we pull from the entire enterprise in the bank. So it is capital markets. It is, it is. Well, everybody is involved and we meet quarterly and we have a scorecard and it reports right into the CEO just to make sure that we continuously move the ball forward. See, it’s not just about having an advisory committee, it’s not just about saying you have a reconciliation committee. What matters is that you’re continuously progressing and that you’re being measured on how you continuously progress. So we are sharing more information across the bank so that we can serve our clients. And the clients sometimes are companies who want to do business with Indigenous communities. Sometimes it’s an Indigenous community as well who is needs representation or they need a capital raise or they need advisory services. We have worked without getting too detailed, we have worked in transmission, we have worked in oil and gas. We have worked in, we’ve worked in telecommunications. We’ve worked in all those spaces either for companies or for Indigenous communities and the approach is always the same. Build the relationship, understand what the needs are, make sure you’re not rushing the pace and knowing the appropriate places to go. If outside help is needed in terms of government policy or or programming funding, then that’s kind of the expertise that we’ve built up and from my point of view is by share. For the last few years. If you asked me on any interview, on any TV show anywhere, what is the most important thing the federal government can do, I would tell you and I have told you that Indigenous loan guarantees from the federal government. Are a key to ensuring that we’re going to have developments in the country and economic reconciliation. And after many, many, many years of bugging, I, one of the voices, Charlene, GAIL and and the whole crew did a lot more than I did. But I added my voice and I used my platform just to say this is important. It’s something that Canadians want and something that Canadians need to have as a relationship with Indigenous communities.

Robert Brant: Yeah, there there were many voices and yours and CIBCS was an important one in that mix that help bring that about South. Congratulations to you and everybody else who advocated for that initiative. It’s an important one, hopefully a first step to help unlock what is needed not just in Indigenous communities, but Canada if we are going to transition our energy sources, if we are going to grow and become more productive as a country. You mentioned all roads on these projects lead through Indigenous territories. We’ve heard statistics like there’s something like 470 odd projects in the pipeline expected over the next 10 years, 500 odd billion dollars of investment needed. These are projects that run through or on indigenous territories. And so we need programmes like the federal government has initiated to help kick start some of those.

Lisa Raitt: Yeah, I agree. You know, it’s interesting to at the beginning this particular government, which Full disclosure, as you know is not my political strike being partisan, but this particular government at the beginning when they started talking about federal Indigenous loan guarantees, we’re very focused on excluding oil and gas. And you know, it took about a year of explaining from Indigenous communities that you don’t get to tell us what to invest in. I mean, that’s a fundamental part of self government as well. You get to choose. So they in the announcement, they very clearly said they are sector agnostic, meaning that the loan guarantee, these can go towards oil and gas projects. Should that be the desire in the wish of the First Nations community to do so. I think that’s a big win and it’s a big recognition that of all the projects. But of course, I think it’s $5 billion of loan guarantees that can go like that. So we’ll see whose projects are going to win first. But I do know that any Canadian government now or in the future is going to be caring about critical minerals. And that is where the relationship with First Nations and Indigenous communities is the most important. Because like he said about energy transition, we’re talking national security as well, making sure that supply chains, friend shoring. I mean, if we’re going to put ourselves in the window as Canada, as being a trusted place to acquire your lithium, to get your copper, to get your chromine, to get whatever it is that you need, then we need to be able to show that we can get a project done in under 16 years.

Robert Brant: Yeah, absolutely.

Mark Magnacca: I think one of the things with Canada, First off, if you look at the land and then the place called Canada, how much our country has changed. Our land has changed, Rob. Our country has obviously changed and I think this is one of these huge opportunities that, you know, Canada and Canadians always stand up for and make happen because we get to reinvent our country and how a country works with everybody’s in the country, those who are their first indigenous people and those who came later to really make something special. And as we’re in more turbulent times, as you’re talking about critical minerals and these other issues, I think it just reinforces the opportunity in front of us. And if you look at both your firms to the most recognised names, enterprise names in Canada, McCarthy, Tetrill and CIBC, that you’re here speaking about these issues shows the importance of this and probably why we’ll succeed because the the business leaders behind it, the indigenous peoples are behind the rest of Canada’s. You know, once they figured it out, it was like, oh, we have to do something about this. So I think the country and the business opportunities, it’s a good time to be doing business with Canada or looking at Canada as an investment opportunity.

Lisa Raitt: I think so, yeah.

Robert Brant: Some have described it as a hinge moment. And this is, this is a moment where –

Lisa Raitt: Sorry for laughing, Rob.

Robert Brant: No, it looks like this things are headed in the right direction. Things like government loan programmes at the federal level modelled on what the provinces have been doing in places like Alberta, where I understand they’ve never had a loan actually called and they’ve been operating their programme for years. And so, yeah, we’re all hopeful. This is just the beginning. Really pleased to hear organisations like CIBC, when they talk about initiatives that they’re proud of, are talking about not just being able to match investors with communities, but looking at how they do business as a whole as part of economic reconciliation with Indigenous peoples. McCarthy teacher was doing the same thing, looking inward, not just about how we can provide legal services, but looking at ourselves as a business and how we operate and we take economic reconciliation very seriously.

Lisa Raitt: You know, to get philosophical for a minute, I sat in government between 08 and 15 and the conversation around Indigenous communities at the time was really focused on the Indian Act and how it was unworkable and how we need to change the Indian Act. And it just, we got ourselves into gridlock. We couldn’t get our way out. So when the Indigenous communities took it upon themselves to say, OK, forget about that, let’s figure out how to do projects together. I mean, they’re the ones that are leading the way on this. It’s not that Canadians suddenly woke up and decided, oh, we’re going to, we’re going to work with Indigenous communities. It was the Indigenous communities that rescued us from being stuck in this incredible swamp of not knowing what to do with respect to the Indian Act. And that’s why we’re so far ahead now.

Robert Brant: And I think I believe in attendees at the at the summit, we’ll have heard a message that Indigenous communities want to participate. They want development when it’s done properly, when they’re consulted in a meaningful way, when they have a meaningful stake in how these projects or businesses will evolve or be developed. When that is done in a proper way, the Indigenous communities are very, very supportive. And I think that may have surprised some of our attendees at the summit. Times have changed from even, yeah, 15 years ago when we got excited about LNG possibilities. I think we’ve learned a lot in in that period since then.

Mark Magnacca: I think we’re still excited about LNG possibilities, just.

Lisa Raitt: Yeah.

Mark Magnacca: I’m coming back because it was one area that we haven’t touched on is about your own personal understanding of Indigenous cultures and perspectives and how that’s influenced your approach to leadership, not in your current role, but all the organisations you’re involved in.

Lisa Raitt: Yeah. So when I was in government, I had natural resources, I had labour and I had transport. So I didn’t have any direct connectivity necessarily with Indigenous communities. I was kind of on the periphery, but where I grew up in Cape Breton and what I witnessed was an incredible economic transformation of a community where they went from incredible impoverishment, lots of high school dropout, not moving on to university, tonne of racism, conflicts within the community with between between Sydney and the First Nation itself. Member to to where we are now, which is part owner of Clearwater Foods, an incredible economic engine for the ability for the region. The number 2 employer in the region, imagine goes to be the number 2 employer. So I have witnessed the the possibilities, I’ve witnessed the opportunity and I just would love to see that happen for Canada. And, and what it came down to is building a partnerships, slowly developing plans, gathering the community together, looking after the community always and having, you know, had a, they had a fight for their rights, though we they wouldn’t be where they are today. But for the fact that Donald Marshall junior challenged the right for hereditary fishing. I mean, we have to recognise that and that allowed them to build and they were smart and they invested and that can happen right across this country. And and that’s the that’s what I bring to the table. And being I have weren’t witnessed to the credible, I would say metamorphosis of a community in in no more than 30 years.

Mark Magnacca: Excellent. So hopefully we’ll see more of those successful transformations over the next years as a result of the conference and of course, all the all the work that everyone’s doing. But again, it comes back to people standing up for what they believe in and for their rights. But also when you talk about the way to do business, when we all sit back and think, we all know that’s how we should do business anyway. It is about building relationships, right? It’s about taking time, getting organised and doing things in the right way, not necessarily the quickest, OK, speed is important, but to do things well. And I think this is the chance to reinvigorate the approach to business because if you come to Canada, do business now, these are the rules of the game. And Canada’s a lot to offer foreign investors around the world. And this is just the new playbook that we have.

Lisa Raitt: Indeed, indeed. And any other foreign investment is going to, as they go into other countries, we learn how to work with the culture of the country. So it’s nothing new for a foreign investor to come into a country and, and figure out the culture that you’re investing in and go from there. It’s just, it’s a new addition to work with Indigenous communities.

Mark Magnacca: Great.

Robert Brant: Well, thanks very much for your time, Lisa. Any final thoughts coming out of the summit or calls to action comments you’d like to leave with our audience?

Lisa Raitt: Yeah, I can’t emphasise enough the importance of helping Indigenous communities build capacity to do these kinds of projects within their own communities. And the only way that’s going to happen is if current companies open up and bring in people to train and give you an example of a financial institution. They get thousands of applications to come in and and work in various parts of of the bank. And perhaps an indigenous student just doesn’t have the resume that looks like something that an AI robot is going to spit out for us to consider. Because remember, all this culling happens through AI. I mean, you may realise that. So I think it’s important for us to remember that the traditional path is not the path that Indigenous students are following. We need to make sure that we make more effort to bring more people in. And you know, what’s happening in Canada, I would say right now, to be very candid, is where you see people like you, Rob, who have built a career. You’re a hot commodity. And we see companies all trying to cannibalise from one another this knowledge of like, for example, Indigenous markets in the case of banking. And that’s problematic because we want to build and backfill more. We don’t want to leave it at just a handful of people in the country who can do the work. I focus on that younger generation, that younger cohort coming out of out of high school, showing the opportunity involved in banking, in law and accounting and then saying, and it’s OK, if you want to go back to your community, we’re going to we’re going to train you. We’re going to give you all the tools and the skills so that you can go home.

Robert Brant: Excellent.