Building blocks: How Indigenous communities benefit from increased investment capacity

Pasqua Beach at Pasqua First Nation. Photo by Shane Luhning.

Many First Nations in Saskatchewan have been building their investment capacity for decades. How they have accomplished this goal often involves complex legal and governance structures designed to work around the paternalism of the Indian Act and achieve the broader goal of increasing the independence, wealth, and wellbeing of the entire community.

“Thirty years ago, First Nations communities began thinking about economic development,” says Richard Missens, member of Pasqua First Nation and president and CEO for PFN Group of Companies. “But our first goal wasn’t just to make profits and get into business, the end [goal] was helping to change the social conditions for our members in our communities and find supports where we can help families move out of the symptoms of poverty.”

Pasqua First Nation Chief and Council. Photo by Shane Luhning.

Missens says economic development and community are “inextricably connected.” By creating building blocks like trusts and forming a legal structure that non-Indigenous partners understand, such as corporations, these economic development entities and partnerships can create capacity previously unavailable to these communities through federal government programs alone. The aim is to be self-sufficient and participate in the broader economy in a meaningful, sustainable, and beneficial way, suggests Missens.

“First Nations need a hand up, not a handout, and we want to be participants in the economy, not dependent on the state,” says Missens. “That means governments, even industry partners, corporate Canada, [need to] help them in supplier development, in [joint ventures], building that capacity that’s needed. Because once we get there, we’re going to support ourselves. We’re going to grow. We’re going to become better partners to industry, and we’re going to be self-sustaining.”

To illustrate, Missens points a $10 million Elder care facility under construction on Pasqua First Nation, scheduled to open this summer.

“We did it all with our own money. We didn’t get any government funding and we’re planning to use our own money to operate,” says Missens. “PFN Group of Company’s profits, from all the different business entities, eventually aggregate through to the band, the band can now use the funds to help address social priorities.”

Ron Hyggen, former chief operating officer and recently appointed chief executive officer for Kitsaki, the limited partnership that manages economic development activities for the Lac La Ronge Indian Band, also says that investment capacity is important to community development.

“Kitsaki’s success in our investment capacity is critical to our six communities,” says Hyggen. “We employ hundreds of Indigenous staff across the province, and many are from the six communities of Lac La Ronge Indian Band.”

Ron Hyggen

Ron Hyggen

Hyggen notes that besides jobs, the corporation has provided more than $25 million in profit dividends since 2009, and funded a wide variety of community development initiatives, such as housing, scholarships, and youth and Elder programming.

Kitsaki was set up in 1981 and has a long history of successfully building its business and the First Nation’s investment capacity. Hyggen says this success is due in part to consistent leadership. “We have enjoyed continuity in leadership, both from our elected leadership of Lac La Ronge Indian Band and within Kitsaki,” says Hyggen. “This has allowed us to build a network of resources, internal policy and systems to support our investment activity.”

Because First Nations’ reserve land legal title is held by the Crown, it is difficult to leverage the land to get loans or mortgages for commercial purposes. Some First Nations start trusts to help take on loans for projects or business development. The cash in the trust acts as security for the loan.

The Saskatchewan provincial government recently set up a similar fund for loan guarantees. The Saskatchewan Indigenous Investment Finance Corporation (SIIFC) will offer loan guarantees to eligible First Nations and Métis communities and organizations to support investment in forestry, mining, oil and gas, energy production and value-added agriculture projects.

SIIFC was announced during the 2022 budget and aims to support Indigenous participation in the province’s natural resource and value-added agriculture sectors. The support comes in the form of loan guarantees of up to $75 million, with a minimum guarantee of $5 million required for eligible projects.

“Saskatchewan is fortunate to already have a number of successful Indigenous-led companies and organizations that are strong contributors to our province’s economic growth,” says Jeremy Harrison, Trade and Export Development Minister. The province claims “a lack of access to capital was identified as the primary barrier to Indigenous equity ownership of natural resource and value-added agriculture projects.”

“I think it’s really good that government agencies and organizations are trying to find ways to create options for Indigenous development,” says Missens.

But Missens also points out that these funds and initiatives can come with significant administrative costs or be too narrow for many First Nations to leverage. So, while a good first step, more can still be done.