First Nations across the country deal with aging or decrepit infrastructure every day with little hope for improvements due
to lack of funds or investment. A recent study by the Canadian Council for Public-Private Partnerships states that experts estimate the infrastructure deficit across First Nations in Canada to be at least $25 billion and even higher than $30 billion.These infrastructure investments need to be sustainable. They need to meet the needs of the present without compromising the needs of future generations.
They need to support the development of employment opportunities for First Nation communities. Research has to be done to ensure all costs over the entire life cycle have been considered to ensure there will be sufficient funds to cover those costs.
Financing gaps occur because many First Nations don’t use all available fiscal tools or don’t have sufficient fiscal capacity. Examples of fiscal tools include annual property tax and other local revenues, long-term debentures, development cost charges and service taxes, public-private partnerships and transfers from other governments. Transfer funds from other governments are not stable enough for debenture financing as the amount of transfer funds is determined by the current elected government and would likely change with the election of a new government.
The FMA was designed to provide expanded tools to finance infrastructure and help facilitate the fiscal tools identified above. The FMA provides scheduled First Nations with expanded authority to make taxation laws that include property taxes, services taxes, development cost charges, business activity taxes and user fees.
Project Management gaps occur where there is insufficient experience or expertise to efficiently and cost effectively manage and build infrastructure projects. There is little experience within First Nation administrations to manage all elements of an infrastructure project. Also, few First Nation government administrations have the administrative framework in place to support either private or public investment. This includes missing statistical information and certified administrative capacity.
The FNTC is supporting First Nation proponents of a First Nations Infrastructure Institution (FNII) to be created under the FMA. The FNII could help close capacity gaps and provide higher value for money for the significant impending First Nation infrastructure investments by providing assistance to First Nations through:
- Implementing standards and laws required to support infrastructure projects and improve investment climates;
- Assessing infrastructure project readiness and developing an infrastructure development plan;
- Developing integrated infrastructure planning;
- Creating administrative capacity to assess appropriate costs for infrastructure projects;
- Creating capacity to efficiently project manage and build infrastructure projects;
- Creating certified training and systems for First Nation administrations to support the operation of sustainable infrastructure systems;
- Advocating for the development of new FMA revenue streams within an improved fiscal framework to finance infrastructure projects; and
- Assessing infrastructure risks and developing risk management strategies.
The proposed FNII could help fill the infrastructure capacity gaps faced by many First Nation governments in Canada. By filling the planning, financing, project management, and legal gaps, the new FMA institution can support First Nations in the development of economically and fiscally sustainable infrastructure projects.