Hon. Lisa Raitt's Empowerment, Partnership, and Progress: CIBC's Role in Investing in Indigenous Communities

Investment maybe a byword for progress and prosperity, but in the context of Indigenous investment, it transcends mere financial investment in projects. According to the Government of Canada, a fair Canada involves progressing in the journey of reconciliation with Indigenous Peoples. Canada should bring fair and just opportunities for all people, including Indigenous communities. Where does this roadmap lead Indigenous people to?

A recent interview with the Hon. Lisa Raitt, a former federal cabinet minister and Deputy Leader of the Official Opposition, and the Vice Chair and Managing Director of Global Investment Banking at the Canadian Imperial Bank of Commerce (CIBC), a major Canadian bank, providing a wide range of financial products and services from retail and business banking to investment management services for Indigenous communities, provides a strategic framework of what financial institutions and Indigenous communities aim to achieve in terms establishing long-term investment ensuring Indigenous peoples are involved in negotiations and project planning.

Together with Robert Brant, CIIS Co-Chair and Managing Partner of McCarthy Tétrault London, the in-depth interview with the Hon. Lisa Raitt tackled all aspects of Indigenous investments including financing options, the importance of recognising the law governing Indigenous rights, and how Indigenous peoples will impact future investment in Canada.

Vision For the Future of Investment in Canada

As of June 3 2024, Canada's total foreign direct investment reached $ 62.3 or 13.9 higher than the 10-year average. This notable increase only suggests that Canada is one of the best countries for investors. Canada gained investors' confidence for many reasons. Canada is considered to be the number 1 fastest growing country in the G7. It is also number 1 in G7 for banking stability and access and to top all that, if you are looking for a country to be your second home, Canada ranks 3rd in quality of life.

Canada prides itself for its educated workforce, one of the country's assets that draw investors to this country. With a diverse and highly-skilled talent pool, Canada has met and even exceeded the global standard for excellence. While the workforce makes waves in various sectors, Canada's focus is on science, technology, engineering, and math (STEM). A clear indicator that Canada strives for innovation.

Market access is also another stand-out quality that makes Canada a viable country for investment. It has a long history of free and open trade, making them an ideal place for market expansion. Canada has a proven track record in international trade, ensuring investors’ return on investment. Canada's ability to reach global markets is strengthened by 15 free trade agreements, covering 51 countries with an estimated total of 1.5 billion consumers.

Economic stability is an important factor to consider when searching for a good place to invest. Hailed as one of the world's top investment destinations, Canada ensured investors made the right decision of choosing the country for market expansion. Canada's stability is based on three pillars: Financially Strong, Politically Stable, and Economically Sound.

Canada is not only the best place to invest because their ongoing commitment to leverage technologies and energy systems proved the serious efforts they put in to achieve net zero by 2050. They wave the sustainability banner being the number 2 most attractive country for green energy projects, number 4 among G7 countries on the Green Future Index, and one of the world's most sustainable countries.

Following these investments, the Hon. Lisa Raitt also emphasised that Canada has been making efforts to involve Indigenous communities as partners in various investments, initiatives and projects, including equity partnerships, based on the community’s preference. She added that for Indigenous investments to move forward, it is essential for investors to give importance to free, prior, and informed consent (FPIC), enabling Indigenous peoples to exercise their right to self-determination. The Hon. Raitt believes that FPIC is crucial in creating investment opportunities for the Indigenous peoples.

One of the challenges the Indigenous communities face that she cited was the access to affordable capital in Canada. While there are loan guarantees that help Indigenous communities with projects and initiatives, there is still an urgent need for financial sectors to increase their role in funding Indigenous-led projects to build infrastructure that will sustain long-term economic growth.

The Role of Institutions like CIBC in Facilitating and Supporting Sustainable Investment and Development

Banks play an important role in Indigenous-led projects by providing a range of services such as investment, borrowing, and banking services not only for Indigenous businesses but for Indigenous governments and families as well. Aside from essential financial services, banks recognise the important of retaining Indigenous employees, hence playing an active role in harnessing Indigenous education and financial literacy.

The Canadian Imperial Bank of Commerce (CIBC) ensures their financial services are accessible to First Nations, Inuit and Métis clients in Canada. They offer banking and financial service ensuring solutions are tailored to their needs. The services provided are designed to help Indigenous people's advancement and growth.

As part of their unwavering commitment to acknowledging the unique cultures and remarkable contributions of Indigenous communities to Canada, they established a Reconciliation Action Committee. This initiative is in alignment with the recommendations of the Truth and Reconciliation Commission of Canada. The committee is dedicated to fostering understanding, respect, and meaningful engagement with Indigenous peoples, aiming to address historical injustices and support the path toward reconciliation. They prioritise authentic dialogue and collaborative efforts to build stronger relationships and create lasting positive impacts within Indigenous communities.

Hon. Lisa Raitt highlighted the significant role of financial institutions like CIBC in making sure Indigenous communities have access to different types of financial services, essential for developing sustainable investment and development. She emphasised that while Indigenous peoples have long been partnering with banks as customers, it requires deeper respect and understanding when it comes to integrating capital markets into various transactions involving Indigenous peoples. She stressed the significance of adapting institution strategies to make sure CIBC's approach aligns with Indigenous clients' consultative decision-making processes. Financial institutions have the obligation to provide information and support capacity building to Indigenous communities.

Successful Collaborations Between Financial Sectors and Indigenous Communities

One of the challenges that Indigenous communities are facing in undertaking projects is the lack of access to capital. CIBC is one of the financial institutions that have continuously provided support for Indigenous communities including, advocating for government loan guarantees. In 2024, the Canadian federal government introduced loan guarantees worth 5 billion dollars with an objective to provide more economic opportunities for the Indigenous communities.

The Indigenous Loan Guarantee Program will help Indigenous communities participate in and have ownership of natural resource and energy projects.

Other financial institutions that have been putting in consistent efforts in funding Indigenous-led projects include Canada Infrastructure Bank (CIB), Alberta Indigenous Opportunities Corporation (AIOC), Saskatchewan Indigenous Investment Finance Corporation (SIIFC), Ontario Aboriginal Loan Guarantee Programme (ALGP), First Nation Infrastructure Fund (FNIF) and many others.

In relation to collaborations between the Indigenous communities and financial sectors, the Hon. Lisa Raitt shared insights into the gradual yet impactful emergence of projects within Indigenous communities, particularly in the oil, gas, and resource sectors. She illustrated her point with a notable example from the Atlantic provinces, highlighting the Clearwater fisheries deal in Nova Scotia. This landmark deal, spearheaded by John Risley, the owner of Clearwater Foods, and Chief Terry Paul, exemplified a significant shift towards Indigenous partnerships in major business ventures.

John Risley had known Chief Terry Paul for many years, and when he decided to sell Clearwater Foods, he ensured that Indigenous partnership would be a central component of the transaction. The structure of the deal revolved around this partnership, marking it as a game changer.

The most valuable asset of Clearwater Foods lies in its fishing licences, which are crucial for the operation. Indigenous communities in the Atlantic provinces hold numerous fishing licences and have a traditional right to fish these waters. Consolidating these licences under one organisation made perfect sense and ensured their preservation for future generations. Chief Terry Paul emphasised that while the current generation may work as fishers or in the processing plants, the long-term vision is for them to become CEOs, CFOs, and board members, thereby building capacity within the community.

From a social perspective, this partnership offers immense value. For young members of the community, it provides the opportunity to work for a significant corporation while staying connected to their roots. The success of this deal opened many eyes and demonstrated the potential for meaningful collaboration between Indigenous communities and the private sector.

The Future Between Different Models of Financing

In Canada, various models of financing cater to diverse needs across different sectors and communities:

1. Traditional Bank Financing

The most common model involves loans and credit lines from commercial banks and financial institutions. This funding is accessible to businesses and individuals with established creditworthiness and typically involves interest payments and collateral.

2. Government Grants and Subsidies

Federal, provincial, and municipal governments offer grants, subsidies, and tax incentives to stimulate economic growth, support innovation, and address social issues. These funds are often targeted towards specific industries, research and development, or community projects.

3. Venture Capital

Venture capital firms provide funding to startups and high-growth businesses in exchange for equity or ownership stakes. This model is prevalent in technology, biotech, and innovative sectors where rapid growth potential exists, often involving substantial investment and risk.

4. Impact Investing

Impact investors seek financial returns alongside measurable social or environmental impacts. This approach supports businesses and projects that address pressing societal issues such as poverty alleviation, renewable energy, and sustainable agriculture, aligning financial goals with social responsibility.

5. Debt Financing

Beyond traditional bank loans, debt financing includes bonds, commercial paper, and private debt placements. These instruments allow organisations to raise capital by promising repayment with interest over time, often tailored to specific financial needs and risk profiles.

6. Private Equity

Private equity firms invest in mature companies with significant growth potential, aiming to improve operations, expand market reach, and increase profitability. This model involves acquiring a controlling interest in businesses and implementing strategic changes to enhance value before eventual exit.

The Hon. Lisa Raitt recognises the need for finance sectors to actively participate in helping Indigenous communities fund projects. She discussed the increasing involvement of Indigenous communities in project ownership on their lands, highlighting how markets are responding positively to such initiatives. She cited Fort Mckay as an example where the community purchased assets from an oil and gas company without relying on loan guarantees. The scale of these projects sometimes requires support from the First Nations Financing Authority or guarantees from provincial and federal governments to attract investors. Lisa emphasised that financial institutions like CIBC are supportive, aiming to secure competitive prices for clients without imposing excessive capital costs.

While navigating federal and provincial policies remains a continual process of adjustment, Lisa highlighted the importance of effective communication to ensure these initiatives' success and sustainability.

Canada’s Role in Attracting Foreign Investment and The Impact of the Involvement of Indigenous Peoples in Economic Development

Indigenous-led projects in Canada have shown remarkable success despite facing challenges such as financing constraints and community engagement issues. Statistics highlight their impact: Indigenous businesses contribute over $12 billion annually to Canada's GDP, employing more than 380,000 people across various sectors. Successful partnerships and Impact Benefit Agreements (IBAs) in resource sectors have also generated significant economic benefits, including substantial revenue-sharing arrangements that support community development and infrastructure improvements. These projects prioritise social impact alongside economic outcomes, promoting cultural revitalisation, language preservation, and community well-being through innovative programmes and partnerships.

The Hon. Lisa Raitt highlighted a significant shift in how foreign direct investment is engaging directly with Indigenous communities, bypassing traditional routes through the Canadian government. In her role at CIBC, she plays an important role in building these connections, particularly by leveraging her network to facilitate investments without governmental intermediaries.

One example she cited was creating platforms in the UK to connect potential investors with Indigenous communities in British Columbia. This approach enables direct engagement and helps streamline the process of showcasing projects to international investors.

In British Columbia, for instance, First Nations have developed critical mineral strategies aimed at attracting foreign investment. She stressed the importance of such strategies and programmes in garnering international interest and support for Indigenous-led initiatives.

She noted that involving Indigenous delegations in international discussions, as advocated by Minister Jonathan Wilkinson, enhances trade facilitation and strengthens partnerships. Lisa emphasised the ongoing need to build capacity, develop effective strategies, and establish pathways for sustainable economic development within Indigenous communities.

Next Generation of Business Leaders – Engaging with Indigenous Communities

In her discussion, the Hon. Lisa Raitt reflected on the evolving attitudes towards Indigenous participation in Canadian businesses, particularly within resource sectors. She emphasised the importance of embracing Indigenous partnerships and equity as integral to sustainable development in Canada.

She noted a significant cultural shift among her generation and younger Canadians, acknowledging a growing awareness and acceptance of reconciliation principles. She envisioned a future where Indigenous leaders play prominent roles in corporate boardrooms and executive suites, advocating for greater representation and leadership opportunities.

Highlighting the necessity for inclusive pathways from post-secondary education to meaningful careers, Lisa stressed the importance of nurturing the next generation of Indigenous leaders. She gave importance to the value of building enduring relationships based on trust and mutual benefit, contrasting it with older, more competitive business practices.

She concluded by encouraging future developers to prioritise economic reconciliation, emphasising the transformative power of long-term relationship building and collaborative business practices in fostering sustainable economic growth.

CIBC Initiatives

CIBC’s unrelenting support to Indigenous communities proves their commitment to making economic development accessible to everyone. She provided insights into the proactive steps taken by banks towards reconciliation efforts, highlighting her role as co-chair of a Reconciliation Action Committee at a major bank. Collaborating with Indigenous leaders like Jaimie Lickers, Senior Vice-President, Indigenous Markets, CIBC the committee engages stakeholders across the bank, including capital markets and advisory services, to ensure continuous progress.

The committee meets quarterly with a clear mandate to advance reconciliation goals, reporting directly to the CEO. She emphasised the importance of measurable outcomes, not just symbolic gestures, in promoting meaningful change within the bank and its interactions with Indigenous communities.

Their approach spans various sectors, from transmission to oil and gas, focusing on building relationships and understanding community needs. Whether supporting companies or Indigenous communities directly, the goal remains consistent: to provide strategic advice and access to resources, including government policy and funding.

She highlighted the significance of federal loan guarantees in promoting economic development and reconciliation, advocating for their implementation after years of advocacy alongside other voices in the community. She stressed that building strong relationships with Indigenous communities is not only essential but also a shared desire among Canadians.

Influence of Indigenous Cultures and Perspectives on Leadership Across Organisations

Although her previous government roles in natural resources, labour, and transport did not directly connect her with Indigenous communities, her upbringing in Cape Breton provided valuable insights. She shared her perspective on the transformative potential of Indigenous communities in Canada, drawing from her personal experiences and observations.

In Cape Breton, she witnessed an incredible economic transformation within the Indigenous community. Once plagued by high dropout rates, poverty, and racial conflicts, the community now boasts significant economic progress. Membertou, for example, is a part-owner of Clearwater Foods and has become the second-largest employer in the region. This turnaround resulted from building partnerships, developing strategic plans, and developing community solidarity.

She emphasised the importance of recognising the efforts of individuals like Donald Marshall Jr., whose fight for hereditary fishing rights became fundamental for progress. The community's smart investments and persistence serve as a model for potential growth across Canada.

Her firsthand experience witnessing this metamorphosis in just 30 years fuels her commitment to developing similar opportunities nationwide, showcasing the power of partnership and perseverance in driving economic and social change.

Promoting Development Through Empowerment

Helping Indigenous communities build capacity to undertake significant projects within their own regions is critically important. She highlighted that current companies must open opportunities and provide training to Indigenous individuals.

Using financial institutions as an example, she noted that these entities receive thousands of applications, and the conventional hiring processes, often filtered by AI, may overlook Indigenous students who may not have traditional resumes. She stressed the need to reconsider these pathways and make more concerted efforts to include Indigenous talent.

She observed a trend in Canada where companies compete for experienced professionals knowledgeable about Indigenous markets, which is problematic. Instead of merely relying on a limited pool of experts, it is crucial to cultivate and support the younger generation. This involves showing high school students the opportunities in fields like banking, law, and accounting, and providing them with the necessary training and skills.

Her vision includes empowering Indigenous students to return to their communities equipped with valuable knowledge and expertise, promoting sustainable development and economic growth within their own regions.

Transforming Potential Investments into Tangible Projects

The overall interview with the Hon. Lisa Raitt highlighted the transformative potential of creating strong partnerships and building capacity within Indigenous communities. She shared insights on the evolving business landscape, giving importance to inclusivity and strategic planning in driving sustainable development. The role of institutions in facilitating direct engagement with Indigenous communities and supporting their economic initiatives was highlighted as essential for progress.

The Canadian Indigenous Investment Summit plays a key role in this context. It serves as a platform for investors to gain a deeper understanding of Indigenous markets and to connect directly with community leaders. Promoting collaboration and providing valuable insights into successful investment strategies help investors make sound, informed decisions that contribute to economic reconciliation and shared prosperity. This ongoing dialogue and partnership are key to ensuring long-term success and mutual benefit for all stakeholders involved.

Discover More About Indigenous Investment Opportunities

Drumbeats is the must-listen podcast for investors interested in Indigenous investment in Canada. Born from the Canadian Indigenous Investment Summit, the show focuses on the nexus of Indigenous economic strategies and investment opportunities. Hosts Mark Magnacca and Rob Brant, co-chairs of the Summit, lead engaging interviews and expert analyses that explore how these crucial conversations impact economic development within Indigenous communities and beyond.

Transitioning from these enlightening conversations, the Canadian Indigenous Investment Summit is committed to fostering sustainable and inclusive investment practices that incorporate and respect the perspectives and rights of Indigenous communities, aiming to benefit all involved stakeholders.