Unlocking Indigenous economies for the benefit of all Canadians

Lisa Raitt: Thank you for tuning in to The Raitt Stuff. I’m your host Lisa Raitt and in this podcast I’m going to share insights on current hot topics in the areas of public policy, politics and business, with some guests along the way. I have a very special guest with me today. I have somebody who has been working for many, many, many years in Indigenous reconciliation at a very high level, at the top level actually. Today I have with me Harold Calla, who is the executive chair of the First Nations Financial Management Board. He’s a member of the Squamish Nation that’s located in North Vancouver, British Columbia. Now, Harold worked with the Squamish Nation after many years in international business, and he came in as a negotiator in the areas of economic development. land management and finance and he served on the council. He’s also acted as an advisor and an arbitrator for the First Nations in Western Canada. And Harold most recently was honored at the Public Policy Forum’s Testimonial Dinner Awards in 2023, which is where I first met you, Harold. Thank you very much for agreeing to be with me here today.

Harold Calla: Well, thank you for inviting me. It’s my pleasure.

Lisa Raitt: As I said at the beginning, you have incredible amount of knowledge and lived experience with respect to not just economic reconciliation, but the economic revival for our indigenous communities in the country. And the specific place where you’re involved is the First Nations Financial Management Board. There’s a lot of folks out there who don’t know what that is. Would you mind giving us an overview about the work that you do there.

Harold Calla: My pleasure. The Financial Management Board is one of four institutions now that is part of the First Nation Fiscal Management Act. It was a piece of legislation that was led in development by First Nations to address some of the impediments we faced around economic development and access to capital. And we realized that we wanted to overcome that by demonstrating that we could manage money and that we would be in a position where we could support those that could not. The Financial Management Board has approved financial administration laws for over 300 First Nation communities, financial performance at around 290, and financial management systems now at around 70. It’s unparalleled success. We’ve also had the opportunity, thanks to the engagement with the Governor of Canada, to take over their default management program to support First Nations who have some fiscal troubles and tosupport a reality that many First Nations are smaller and remote and don’t have the access to the resources or the human resource to be able to develop a full-fledged financial management system. And so we created a vehicle for aggregation for First Nations to be able to have access to this. So as a result of these improvements, the First Nations are now collecting over 100 million dollars a year in local revenues. The finance authority will by the end of March hit over three billion dollars in terms of accessing the capital markets to respond to First Nation needs. 

Lisa Raitt: And you’re in every province and every territory. You’ve got full coverage.

Harold Calla: Yes,  we have offices in Vancouver, Winnipeg, Ottawa, and Montreal. But many of our staff, as with the case of almost everybody these days, has staff working remotely and on all regions of the country. And we do.

Lisa Raitt: Harold, remind me what year it was that the legislation came into being, because you were lobbying back then.

Harold Calla: Yes, was 2005 that the legislation was passed. It was passed with all party support in the minority Paul Martin government with a huge level of support from the Conservative Party of Canada at that time.

Lisa Raitt: Yeah. And are you surprised it’s taken almost 20 years to get to the point where you’re really operating at a super high level?

Harold Calla: I am and I’m not. I think one of the things that Canada needs to embrace, the government of Canada needs to embrace, is look at the success of the FMA and understand the value of creating First Nations structures and institutions and organizations to support communities. We need to be in a position where we’re engaging with Canada as equals. And in order to do that, you can’t expect a small community to have all the capacities that we can when we aggregate ourselves together. And so I think it has taken Canada a while to embrace this concept, embrace the concept of devolution. I mean, there’s a threshold that has to be crossed around the recognition of our ability to develop the capacity to govern ourselves and for Canada and the provinces to see the room that they need to see to allow us to exist. That’s the next big step in the evolution in our relationship. And it’s going to significantly impact the speed and the ability for Canada to embrace its economic objectives, which are heavily in the national resource sector. In order to do that, you need First Nations participation in that whole environment. As you may or may not know, I did serve on the board and I still do serve on the board of Trans Mountain. And I appreciate the benefits that come from engaging and association. And I can’t help but think that had we been at the point 10 years ago that we are today in recognizing Indigenous participation how much sooner Trans Mountain might’ve been built.

Lisa Raitt: Hmm, There are some really big projects though, other than Trans Mountain that have been given their final investment decision and their investments have flown and for a lot of it, the reason because of the involvement of FMB. Clearwater is one and the Cedar LNG project is the other that come to my mind. What did you guys do that made that work so well?

Harold Calla: I think part of it is creating the ability to understand what the economics of the project are. What is the value chain to know what you’re being offered? When we started the Major Projects Coalition, was around 2008-10 when there was all kinds of activity in British Columbia. And the First Nation communities had received some of them, 17 different referral letters on projects. You had an organized First Nation that was in third party management that was being asked to comment on a $40 billion project. Well, how do they do that? Well, we created the capacity to do that. And I think what First Nations began to understand are two things. One, we need to work together. If we work together, we can achieve a lot more. And what is it that we’re being asked to do? What should we be asking in return for that? And I think that leveled the playing field of conversation. think Canada has recently stepped up to the plate by providing conceptually a loan guarantee program. Alberta’s done it. BC’s done it. The reality is governments need to stand up and support First Nations economic participation. Canada, through legislation many, many years ago, removed us from the economic mainstream. Now that they need us, we can’t go from there to being current without the support of government can because we don’t have balance sheets. We don’t have assets. We don’t have the ability to do those things. So it’s in Canada’s interest to ensure that First Nations can sit at the table meaningfully and gain an economic participation so that they can better understand why these things are good for not only them, but the rest of Canada. And I think that’s also something that is not clearly understood. Indigenous economic development is good for the country. If we have economic benefits that flow from that, where are we going to spend the money? We’re going to spend it in Canada, supporting our communities and moving them from the poverty that they’re in. And I think that we’re on the right track. We’re on the right path. I think that governments understand the need to support. need they understand the need to manage risk. And they’re beginning to understand the value of the institutions that we created, the Major Projects Coalition, the FMA institution, the Lands Board. I think these are all things that need to happen. We need to get into a position where some of the settlement monies, as an example, we’re wanting to create an indigenous investment commission to corral all of that money under one umbrella, to look at some strategic investments and larger projects that we couldn’t invest in by ourselves because we wouldn’t have critical mass. And to take that benefit and return on that, which would likely be a higher and do some impact investing down at a local level. So there’s a lot of us. You one of the good things that I have seen in my role here is we have a lot of indigenous professionals and they are coming to us and to their communities now. And it’s really exciting to see because when I came home in 1987, if there was another indigenous accountant in this country, I didn’t know who they were.

Lisa Raitt: I hate to laugh, but it’s so true. And sometimes I can tell you that sometimes we feel the same way. It’s, it’s difficult to, to find indigenous practitioners in some of the finance areas. But that being said, I do want to ask you a question, point them. I do want to ask a very specific question, Harold, that I think you can help us with, which is we know what the government needed to do. We know what the government did and they continue to support. What does private sector need to do? And more specifically, what do banks need to do?

Harold Calla: First of all, I think what the private sector needs to do is recognize the need to engage the indigenous communities. That’s the first thing. Investors, you know, let’s take an example of natural resources and, you know, Ontario has been very successful in negotiating battery plants. But as I said to the Deputy Minister of Finance, we’re gonna get the material. And so you need to you need to recognize that from the get-go and you need to recognize it in the beginning. Not when you run into trouble and all of a sudden it becomes a matter of determining the value by examining cost avoidance. This is about full economic participation that would be representative of our inherent right to participate. So you don’t have to give up the farm to do that, but you need to start there and say, If you’re going to come and develop in Canada, Canada has a constitution that says there are section 35 rights. We have adopted UNDRIP. Many even provincial governments are now starting to embrace this concept. Somebody coming into this country needs to accept those are the terms under which you can do business in Canada. And more importantly, what they need to understand is by engaging with First Nation communities in these areas, you can expedite the approval processes and therefore expedite the FID to make these things happen. Because what we don’t want to have happen is for these opportunities to go elsewhere. As they did in 2008, natural gas went to Australia because we couldn’t get our act together. You know, as we look at the world as it sits today and the geopolitical issues that we face, the interesting circumstances that are arising out of the United States, we see deglobalization occurring. Canada is well positioned in a deglobalized environment to have a major impact that really secure our economic future. And I think what First Nations are saying is we want to be part of that now. The growth in the economy, we need to use that to lift ourselves out of poverty. And we need to move away from an expectation that government transfers are going to be the only way that happens. Many First Nation communities in this country now transfers from Canada are, by a significant margin, a lesser contribution to their financial well-being each year.

Lisa Raitt: which is beneficial for everybody.

Harold Calla: Well, we create jobs. know, as you know, Vancouver, the Squamish Nation is in broad inlet. We have the Park World Shopping Center on our lands. We’re developing the SNOC project in downtown Vancouver, 6,000 housing units. We’re responding to some of the social issues that general society is facing, talking about housing, affordable housing, creating employment. All of these things are coming about as a result of Squamish’s ability to secure revenue and to be able to secure the financing. It’s an ox occurring because CMHC came to the table with construction financing as an example. I served on the board of CMHC in 2005. That would never have happened in 2005. So now it’s happening.

Lisa Raitt: But now it’s happening. But it’s a shame that it’s a crisis that actually allows some of this stuff to be more creative.

Harold Calla: Well, the ideas, I think, you know, society has had a hard time reflecting on its relationship with indigenous people in this country. We’ve turned a blind eye to it, quite frankly. You know, many of the people that are my good friends have no idea that we were prevented from engaging in the main economic, the economic mainstream, that we needed permission to leave the reserve. I mean, Who knows that? It’s not taught in Canadian history. And so there’s an attitude that we’re being given something instead of getting something that was contemplated either under treaty or contemplated under some of the Supreme Court of Canada decisions, which says their Aboriginal title exists, that you need to consult and accommodate. And there is an inescapable economic component. We need to embrace those concepts to benefit all Canadians. But, to recognize that First Nations are tired of the welfare-based economy that we exist in through contributions from Government of Canada. We want to redevelop our entrepreneur class. We want to be like the rest of Canada. We want to be able to generate economic activity and in some cases generate wealth as Indigenous communities.

Lisa Raitt: Harold, are you getting any interest from other Indigenous groups around the world? Are they looking at Canada and wondering, is this the right path?

Harold Calla: Everybody. I’ve been to Australia, we’ve been to New Zealand, we’ve even been down the United States. I mean, the United States marvels at what we’ve done because they have a different legal framework. They admire what we’ve done and say we wish we could do it. We’ve traveled with people from Harvard University and the well known Harvard Project and the people there say you’re doing exactly what we said needed to happen. And it’s not because we’re smart or brilliant. You know, in some cases, the more you get involved in these things, the more you realize it’s just obvious. It’s not rocket science.

Lisa Raitt: Yeah, and I would venture to say that because of the hard work you’ve done on this from the beginning that changes in government really don’t factor into any concerns that you may have.

Harold Calla: I’ve been doing this since 1987. So I’ve seen changes in government and every government comes in with a perspective that they’ve campaigned upon. I think that, you know, after about six or seven months, everybody calms down a bit and we start to deal with the realities of the circumstances that the government faces. And on the indigenous side of things, we all come to a common place. I mean, we’ve always achieved all parties support for the things that we’ve done, because we focused on generating an economy within Canada. We’ve accepted we’re part of the Canadian Federation. What we want to be recognized as an order of government within the Federation, but not one that fetters existing structures, one that where you see room ceded by provincial and federal governments to First Nations, but within the Canadian Federation’s framework.

Lisa Raitt: One last word, Harold, before we end. I know that you mentioned it briefly earlier, but I just want to be really clear with listeners that going into the future, you were thinking about a new innovative way of doing, not doing economic reconciliation, but investment in terms of an Indigenous development bank. Do want to tell us a little bit more about that?

Harold Calla: Yeah. You know, often we have attempted to look at what I call the Big Bang solution. And politically on both sides, and it’s never worked. We have to incrementally build something and we’ll wake up one day and realize we created this new relationship. One of the biggest impediments we face in supporting economic development is access to capital, and access to risk capital because of Section 89 of the Indian Act, we don’t have the same ability as others to do. There’s a role to be played by both the private sector and the government candidate and standing up in a business financial organization that can tolerate risk capital. And we have to do it in a way now that response to the economic opportunities before First Nations, because now we’re not talking about millions, we’re talking about billions. And so The $5 billion announcement in the budget for federal loan support is an example of that. But that’s a drop in the bucket, it’s to pair what’s going on. We need to do so in a way that’s risk managed. I think getting the private sector involved with the Government of Canada and Indigenous Development Bank will allow First Nations to come forward to an Indigenous organization, but also bring the experience and capacity of the private sector with the support of the federal government and creating a viable platform for proponents to look at engagement with First Nation communities and an ability for those communities to come to the table with their own financial capacities to support project development. And that’s what I think an indigenous development bank can do. That’s not to diminish the great work of the First Nation financial authority, but that’s not risk lending. The national and Aboriginal capital corporations have done a great job. We can’t build a gas station anymore. We got to build a mine. We to build a dam. Those are the size of the economic opportunities that we have. And we need to respond to that capital requirement in a way that I think the private sector who have historically been asked to bear the burden of this are now that the numbers are too big, they can’t. So we have to be able to carry our own way. And we need the support of the private sector, including the banks to partner through an indigenous development bank and providing indigenous equity participation in a risk management environment that everybody can tolerate.

Lisa Raitt: Are you optimistic about the Ring of Fire?

Harold Calla: I am. I am. We deal with some of the communities up there now. We had a conference two weeks ago in Edmonton. We have an annual conference called Leading the Way where we’re bringing like minded First Nations around economic development together. We had over 700 people, 220 First Nation communities and 40 tribal councils. And many of those communities ended up following week at the AFN. And we were talking to them and some of the Ring of Fire communities are now prepared to look and listen. I don’t know what that would be at the end of the day. The first thing they need to do is get themselves together in a group. Not the similar way that Muscogee and Squamish and Salais did in Vancouver. We have to set aside some of our political differences and come together for economic benefits. I’m thinking that if there is a willingness on the part of the private sector in Canada and the provinces to support economic participation by First Nations. It’s a place to start with the engagement with the Ring of Fire communities, but that has to be a given upfront for it to be successful.

Lisa Raitt: Well, I hope people listen to what you just said on that because I think it’s an incredible, I would say, opportunity for First Nations in that part of Ontario and of course, absolutely necessary for a supply chain having to do with electric vehicles. Thank you so much, Harold, for being with me tonight. Sorry. Thank you so much, Harold, for being with me today. Really enjoyed our conversation. I could go on for a long time, but if anybody is curious about your organization, your website is FNFMB.com. Take a look at it. Take a look at the map. Take a look at all the communities that are being represented. Take a look at the kinds of things that they do. And it’s a great way for you to educate yourself as to what’s going on in Indigenous economic reconciliation and in the Indigenous economy, essentially.

Harold Calla: Thank you very much. Bye bye.

Lisa Raitt: Thanks, Harold.

Harold Calla: Bye bye.

Lisa Raitt: Thanks so much for tuning in. Now, if you have any questions or comments or even requests on topics to discuss, drop me a line at [email protected]. Your interactions actually will make this better. I’m your host, Lisa Raitt, and this has been The Raitt Stuff.

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