Ottawa, Ontario (April 24, 2009) - The Honourable Chuck Strahl, Minister of Indian Affairs and Northern Development and Federal Interlocutor for Métis and Non-Status Indians, today announced an innovative partnership with the First Nations Bank of Canada to provide debt financing to First Nation businesses with assets on a reserve.
"The Government of Canada is working with financial institutions across the country to address some of the long-standing barriers to the growth and competitiveness of First Nation businesses," said Minister Strahl. "I would like to commend the First Nations Bank of Canada for its participation in this unique initiative and for its shared commitment to Aboriginal economic development."
Under the arrangement, Indian and Northern Affairs Canada (INAC) will provide $2.6 million to establish a loan loss reserve fund with the First Nations Bank of Canada. The reserve fund will be used by financial institutions as collateral to finance loans to medium and large First Nation businesses with the assets needed to secure the loan located on a reserve.
"The loan loss reserve fund will increase our capacity to lend to businesses with assets located on First Nation reserves," said Keith Martell, Executive Chair of the First Nations Bank of Canada. "Successful and growing businesses increase the opportunities for First Nation people to be self-reliant. The Bank is pleased that the Government of Canada has created this fund so that we can help these entrepreneurs make their businesses successful."
INAC's pilot Loan Loss Reserve Initiative will make First Nation businesses more competitive by addressing certain historical impediments to debt financing, including provisions in the Indian Act that prohibit the use of reserve land as collateral. The reserve fund works by offsetting a portion of the lender's potential losses on loans to First Nation businesses.
First Nations Bank of Canada is a Canadian chartered bank primarily focused on providing financial services to the Aboriginal marketplace in Canada. A significant majority of the Bank is owned by Aboriginal shareholders, including Aboriginal organizations from Saskatchewan, Manitoba, Yukon, Northwest Territories, Nunavut and Quebec. The Bank offers a full suite of commercial and personal banking services in combination with an intimate knowledge and understanding of the Aboriginal marketplace.
Through the Loan Loss Reserve Initiative and other Aboriginal economic development measures, the Government of Canada is demonstrating its continued commitment to increasing Aboriginal participation in the Canadian economy.
For more information, please contact:
Minister's Office
Press Secretary
Office of the Honourable Chuck Strahl
Media Relations
Indian and Northern Affairs Canada
819-953-1160
First Nations Bank of Canada
Laney Cheecham
Executive Office
(306) 955-6739
