Thank you for the invitation. We are calling you from the Westbank First Nation Reserve.
The FNFA was created in 2005 under the First Nations Fiscal Management Act, with all-party support. We are a not-for-profit Canada-wide pooled borrowing institution with direct access to the institutional capital markets. We have two investment-grade credit ratings with Moody's and S&P, and we were recently upgraded two notches by Moody's to Aa3 stable. FNFA's rates now parallel Toronto's low rates, meaning that FNFA loan dollars go farther.
FNFA is mandated to issue loans to qualifying first nation governments, not individuals, who choose to support these loans by using their own sourced revenue, including business revenues. Loan terms can match asset life of up to 30 years.
Since 2012, the FNFA has had 103 borrowing members across eight provinces and one territory. Sixty-three first nations have obtained $900 million in long-term financing, resulting in 9,000 jobs created and a money multiplier effect of $1.8 billion. FNFA loans have translated into new housing units, schools, energy projects, wellness centres, infrastructure and economic development.
These are unprecedented times. The induced economic coma of COVID-19 is affecting all FNFA borrowers. Clearly, the risk management and credit enhancement features of the FNFA did not contemplate an economic crisis as potentially catastrophic as COVID-19. Most important, it did not contemplate a substantial number of borrowing members being in financial stress all at the same time, with material changes to revenue streams. For example, one first nation reported a loss of $200 million in revenue and laid off 890 employees. A second first nation's business has lost $2 million and laid off 45 workers. For some first nations, there will be a delayed impact, meaning that they will not feel the negative revenue impact until fiscal year 2021-22, when their revenue-sharing agreements are recalculated based on usage in 2020.
Today we are proposing that Canada support our recommendations, which focus on the needed financial relief options and economic rebound. FNFA, through its member first nations, can be a part of this rebound.
Number one is to establish an emergency fund. The FNFA was modelled after the Municipal Finance Authority of British Columbia, which has a special fund to manage unplanned emergencies. This emergency fund would allow ongoing liquidity of the FNFA, including short-term financing to borrowing members to meet immediate borrowing obligations through the FNFA that cannot be met because of the COVID-19 crisis.
Number two is to implement a commercial paper program. The Canadian commercial paper market is a key source of short-term financing to support the ongoing needs of a wide range of firms and public authorities. Ideally, for the FNFA to raise money to meet first nations' financing requirements, the FNFA would have to have its own commercial paper program. This could tie into the recently announced COVID-19 commercial paper purchase program. The Bank of Canada would buy FNFA paper and earn the stipulated interest rate to act as a buyer of last resort. This would ensure access to funding and economic growth in communities.
Number three is to support monetization. We would also propose that Canada work with FNFA to create an alternative financing program with a long-term commitment that supports the acceleration of community infrastructure on first nation lands and increases economic community development. FNFA's role would be to raise financing to help fund these projects. Repayment of such financing would be by Canada, through an agreement. The advantages of this innovative approach to financing housing and infrastructure are obvious: more housing and infrastructure can be built to meet today's needs. Monetization allows financing to be spread over and to support all phases of the assets' life cycles, which currently does not occur. Also, first nations capacity, institutions and accountability would be strengthened through certification by the First Nations Financial Management Board and the requirements of FNFA's borrowing structure, the rating agencies and capital markets.
Number four is to support shovel-ready projects that would support the implementation of monetization and further kick-start Canada's economy. Through stimulus funding, the FNFA has compiled a list of shovel-ready infrastructure projects from 28 first nations in the amount of $540 million, which would create approximately 5,800 jobs. We expect more projects to be submitted.