Mr. Chairman, thank you for the opportunity to appear before you today.
In 11 days it will be the 10th anniversary of the passing of this legislation. I want to thank all parties and all governments for their continued support for this valuable initiative.
You have to ask yourself why we are here. If we didn't have a problem, we wouldn't be here talking about the need for capital, or if we didn't have challenges in our community. I think we must all come to understand the reality that the status quo in terms of the fiscal financing relationship will not resolve the issues. They're only going to continue to grow. We need to look at creative and innovative approaches to dealing with how first nations as governments are resourced and able to care for their people.
Getting access to capital from the private sector is the only way that I see for us to be able to bridge the gaps that exist today. When I come before committees and I understand through that research that there is a $10-billion deficit in infrastructure and housing on reserves, that can never come adequately from transfer payments from the federal government. We have to engage the mainstream economy, and we have to develop revenue streams.
Providing a framework that allows you to go someplace to make an application for money is really important work, and we need to continue that, but we must recognize that you can't do that if you don't have cashflow. Banks do not lend on the basis that they're going to realize on security; they're not in that business. What they want is debt, principal and interest, to be repaid.
While we're developing some valuable tools on how we can accommodate pooled borrowing and have first nations as governments borrow together from lenders as governments at cost-effective rates, I think we can't ignore the other side of that, and that is, first nations as governments need to have revenue streams. They need to engage in the mainstream economy and have a share of the revenues that are generated by other governments that come from the territory.
It's like this. If I want to buy a car and I make a credit application, the whole facility might be there, but if I don't have a job and I can't make the debt service payments, I'm not going to get a loan. Please, let's not forget that big piece of the puzzle. Yes, let's create the framework for access to capital, but let's not forget the need to create the revenue streams that can support the debt service that is required.
We talk about the need for legislative amendments, some administrative amendments, to streamline. We would very much appreciate, again, non-partisan all-party support to get this done before the House rises in June. That's absolutely critical for us.
When we started this, there was some apprehension about who would come on board. The fact is that we have one in four now coming on board and our geographic distribution is now completely across the country. People are starting to awaken to the opportunities that economic development is creating in their traditional territories through natural resource and major project developments. They want to participate in those kinds of things.
As we look into the future, we ask, how do we resolve the issues that are before our communities and the poverty they live in? Having them participate in the wealth generated from our natural resource economy, which is what Canada's economy mainly is, has to be a solution. How many more times must we go back to the Supreme Court of Canada and argue—both of us—before we accept the reality that first nations have an interest? They should be included and become part of the growth of the Canadian economy, and as a result of that participation, reduce the dependency, become more self-reliant, and regain some of the integrity they had in how they managed their affairs before European contact.
We need to bring them in. These are times when we have to look at first nation communities as economic solutions, not social problems. That's really where we have to get to as communities. I think we have proven, through the work we have done, that first nations are prepared to come forward. They are prepared to develop financial management systems, develop financial administration laws, have their financial performance measured, and become credible business partners and credible risks.
We need your continued support to develop that process right across the country so that more first nations come on board. Our goal as institutions is that every first nation in this country eventually become a client of these institutions and be able to benefit from the services we offer.
From the financial management board's perspective, this means developing financial literacy and creating an understanding of what it takes to develop a financial management system. What it is going to take on the part of everyone else in this country is the recognition that we have to invest in capacity development in our communities, and the first nations themselves have to invest in their own capacity development.
I'm pleased to say that to this time we have received the support from government to be able to do these things, and it's really important. We're starting to see the synergy that comes from that kind of investment, and it needs to continue. I think it's really great that we're having a conversation around access to capital, because that is ultimately the solution. We have some social issues that we can't ignore, but if we don't focus on economic development, we will always only have social issues.
The investments that you're going to be asked to make over the next while are not going to be inconsequential. First nations participation in major resource development in an equity form is going to require billions of dollars of capital, some of which is going to need to be supported by both federal and provincial governments, in my view, to get access to that capital. But those are topics for another day; I hope we will have the opportunity to come back to speak to you about those.
What we can say to you is that these institutions have created a credible framework that has resulted in debentures being issued. We have accountable, transparent systems in first nations communities and are building capacity that will not only serve as models to support borrowing through the finance authority but will promote good governance in the transfer relationships that these first nations have with Canada.
The third party management issues that are faced by the department are matters that can be addressed through the work we do with communities in building financial management systems. That will again further the ability of first nations to be viewed as credible business partners in the economies in their traditional territories.
With that, Mr. Chairman, I'll conclude. We thank you for the support that we've received over the last 10 years and we look forward to working with you in the next 10.