The head of the First Nations Financial Management Board says further spending should be contemplated to help build infrastructure projects in Canada – ventures that would both spur investments with Indigenous groups and also help the environment.
Geordie Hungerford told the recent OSC Dialogue that in addition to a $1-billion initiative announced in March by the Canada Infrastructure Bank, green bond projects, which are specifically earmarked to raise money for environmental projects, are also attracting a lot of attention in Europe.
But green bonds are not gaining the same kind of traction in places like Ontario because of high costs, he said.
“With the increased sophistication of Indigenous projects it’s not so much a lack of access to capital but that the cost of capital for Indigenous governments and businesses is too high and they’re often priced out of opportunity,” said Hungerford.
He suggested that investors consider a “reconciliation bond” that would provide a lower cost of capital to projects that promote reconciliation and include Indigenous infrastructure projects as well as alternative energy projects. While some of that is going on now, he said he thinks there should be a lower cost of capital for these types of bonds.
Hungerford also said there should also be a way to finance non-development of projects. He said there are large parcels of land, often owned by First Nations, that have economic value but only if they’re developed. However, doing that, particularly in the large peat bogs in Canada, can hurt the environment.
“Should there be eco credits for leaving the land alone? Are there ways to recognize the participation of Indigenous communities in protecting the environment?”
