Indigenous and Northern Affairs Committee on April 5th, 2022

[The Chair, Liberal, Marc Garneau]

Hello, everyone.

Welcome to meeting number 13 of the Standing Committee on Indigenous and Northern Affairs.

We are gathered today on the unceded territory of the Algonquin Anishinabe nation.

Today, we continue our second study on the effects of the housing shortage on Canada's indigenous peoples.

Today we'll hear from Ms. Clio Straram, head of indigenous banking at BMO Financial Group; as well as Ms. Tracy Antoine, vice-president, commercial financial services, indigenous markets, British Columbia region, Royal Bank of Canada.

Later, we'll go on to a second panel at 4:15.

I'd like to remind all those attending the meeting in person today of the Board of Internal Economy's directive regarding physical distancing and masking.

To ensure an orderly meeting, please wait until I recognize you, and mute yourself when you're not speaking.

We will hear from our two panellists right now.

Ms. Straram, you have five minutes to make your presentation.

[The Clerk of the Committee, Ms. Vanessa Davies]

Mr. Chair, if I could just interrupt before we start, could you review the interpretation buttons with the witnesses?

[The Chair, Liberal, Marc Garneau]

Very good.

Members or witnesses may speak in the official language of their choice. Interpretation services in English, French, and Inuktitut are available for the first part of today's meeting. Please be patient with the interpretation. There may be a delay, especially since the Inuktitut has to be translated into English first, before it can be translated into French, and vice versa.

The interpretation button on your screen can be found at the bottom for English, French, or Inuktitut. If interpretation is lost, please inform me immediately. We'll stop things until we can fix the problem. Before you speak, please wait until I recognize you by name. When speaking, speak slowly and clearly. When you are not speaking, your microphone should be on mute.

Ms. Straram, you have the microphone for five minutes.

[Clio Straram, Head, Indigenous Banking, BMO Financial Group]

Thank you.

Hello. Aaniin. My name is Clio Straram. I am Cree, and my community is Fond Du Lac first nation. I am the head of indigenous banking at the Bank of Montreal.

BMO has a long history of partnering with indigenous communities. The indigenous banking unit, which I head up, was created in 1992—that's 30 years ago today—to address a gap in available capital for first nations governments as a result of the Indian Act.

A housing shortage has existed for indigenous people for generations. Due to the Indian Act, banks cannot take security over tangible assets on reserve. Anyone who is not a member of the community is not allowed to seize ownership of assets on reserve. For this reason, for generations indigenous peoples have not been able to build needed infrastructure in their communities, or even build intergenerational wealth for themselves and their families, the way that Canadians have off reserve. Homes also create a place to heal from intergenerational trauma.

In response to this, we figured out how to lend in this space by relying on the strength of the first nations or indigenous governments and their guarantees. In 1995 our on-reserve home loan program was created to make it possible for indigenous peoples living on reserve to borrow from a major financial institution to buy, build or renovate a home in their community.

In addition to our on-reserve home loan program, BMO has partnered with the first nations market housing fund. The fund provides additional security in the form of a credit enhancement. We do section 10 and section 95 loans, lending to indigenous governments and people to build homes. These loans are supported by ministerial guarantees and CMHC insurance.

We also provide infrastructure loans to indigenous governments to build multiple homes. This can be done without a ministerial guarantee or CMHC insurance, but is instead based on the strength of the indigenous government. These homes can be either rented or sold to members after they're built. This approach reduces the cost to build each home as economies of scales are achieved, which is particularly important for some of our more northern and remote communities.

While these products alone will not solve the housing shortages, they represent BMO's commitment to making a positive difference. However, there are many factors at play. Household incomes are also a critical component. As a result, as a response to the Truth and Reconciliation Commission's call to action for corporate Canada, BMO's indigenous strategic framework is based on three pillars—education, employment and economic empowerment. These are guided by our indigenous advisory council. Higher education and employment opportunities lead to higher incomes.

In response to this, at BMO we support indigenous students with scholarships and bursaries. We also strive to increase our indigenous representation at BMO through internships, hiring programs and formal mentoring programs for our new hires to support them during their career at BMO.

We are also a member of Canadian Council for Aboriginal Business, and were awarded with a progressive aboriginal relations award at the gold level consecutively six times. This award measures companies' indigenous employment and procurement practices. The gold level is the highest-possible achievement.

Looking ahead, there's still much that can be done. It's critically important to increase the available supply of housing in indigenous communities. Additionally, these homes need to be equipped to handle the impacts of climate change, heat waves, forest fires, extended freezing temperatures and flooding. These are all realities that will only worsen. Our northern communities are particularly feeling these extremes, exacerbated by the higher building and energy costs.

Creating stronger, adaptable, mobile and energy-efficient homes will be key. Partnerships, I believe, will also contribute to making positive change possible.

Meegwetch.

[The Chair, Liberal, Marc Garneau]

Thank you, Ms. Straram.

We'll now go to Ms. Tracy Antoine.

Ms. Antoine, you have five minutes.

[Tracy Antoine, Vice-President, Commercial Financial Services, Indigenous Markets, British Columbia Region, Royal Bank of Canada]

[Witness spoke in Kukwstétsemc and provided the following text:]

Weytkp Xwexw'eytep Tracy Antoine ren skwekwst.s.

[Witness provided the following translation:]

Hello, everyone. My name is Tracy Antoine.

[English]

As vice-president for indigenous banking at RBC for the B.C. region, I thank you for the invitation to appear before the committee today.

The housing crisis facing indigenous peoples is an issue of which I am acutely aware, both personally and professionally. At RBC, we see the effects of the housing crisis in many forms: on reserve, in remote communities and also in urban areas. We know, for example, that approximately 60% of first nations housing on reserve is in need of minor and major repair, with 10% needing complete replacement.

Overcrowding is a serious concern when talking of the residents' health on reserve. For this, we provide many housing alternatives, including an RBC housing program, the on-reserve housing loan program, which is a specific relationship between RBC and the first nations government. We also support all other funding housing opportunities through the ministerial loan guarantees offered by Indigenous Services Canada and CMHC for low-income affordable housing.

One of the big concerns RBC has is that low-income affordable housing creates a dependency cycle because of the lack of jobs. As previously noted by Clio, it is very evident that support of higher education to overcome the low incomes is cyclical when it comes to providing adequate housing. With housing, you also need infrastructure dollars. With the $30-billion infrastructure deficit currently held by the federal government and a 35,000-unit shortfall, it is hard for banks such RBC and others to come to the table and provide housing funding when there's no infrastructure to build on.

The COVID-19 pandemic has shown us the serious concerns of the first nations leadership, which we communicate with on a regular basis. With regard to the overcrowded housing conditions, for RBC this is a crisis that we want to be at the table to help the government resolve through our financial services and our philanthropic investment programs that we currently offer, over and above all of the housing programs that we support and are available to the nations. Access to affordable financing for homes is a small yet important step toward eradicating this crisis, but it is definitely not the sole solution. As this is the fastest-growing demographic and an integral part of the future workforce of the nation, it is important to RBC to remain committed to further discussions specific to finding innovative solutions to overcome collateral security, which supports more capital projects and job creation.

Twenty-five years after publishing “The Cost of Doing Nothing”, we find that the agenda items have remained the same. This will [Technical difficulty—Editor] for us to be able to have future conversations and to have RBC work together as partners of change and implement long-term solutions. This will assist the first nations in Canada in meeting their goals and becoming prosperous and self-sustaining in the spirit of reconciliation.

Kuk sts elp.

Thank you.

[The Chair, Liberal, Marc Garneau]

Thank you very much, Ms. Antoine.

We'll now proceed with a round of questions, beginning with Ms. Stubbs from the Conservative Party.

Ms. Stubbs, you have six minutes.

[Gary Vidal, Conservative, Desnethé—Missinippi—Churchill River, SK]

Mr. Chair, if it's all right with you, we've had a change of lineup here. I'm going to go first, if that's all right.

[The Chair, Liberal, Marc Garneau]

Go ahead, Mr. Vidal.

[Gary Vidal, Conservative, Desnethé—Missinippi—Churchill River, SK]

Thank you.

Ms. Straram, I want to go down a couple of questions with you first. I recognize that you come from Fond du Lac, which is in my riding. Last week I was talking about the tuberculosis outbreaks that have been happening in that area and the direct connection that obviously has to overcrowded housing. We're talking about some very direct links here and, coming from there, you're obviously very aware of the remote areas up in northern Saskatchewan.

You talked about your on-reserve housing program. I want to understand how you qualify for that. What are the technical aspects of that? I don't want to get into too much accounting lingo, but I want to know how you actually qualify, what it takes and maybe a bit about what the difference is in something as northern and remote as Fond du Lac, which has a kind of fly-in access, compared to communities that are still remote but maybe not as inaccessible as some of those other communities. If you can do just a bit of a rundown for me on that, that would be great.

[Clio Straram]

It's my pleasure. Thanks for the question.

Our program essentially straddles both the retail bank and the commercial bank.

On the commercial side, we set up a contingent liability. That's based on the indigenous community or the first nation government. We have that overarching contingent liability approved at the first nation level in the commercial bank. This is based on the strength of the financials of the first nation. That's how we get the initial program set up.

Then it moves into the retail part of our bank. That's where individual members come into a branch and apply for a loan. Let's say, for example, we have $2 million authorized overarching for our first nation community. Let's say it costs $200,000 to build a home in that community. They would come into the branch and request a $200,000 loan. We assess that individual based on the same assessment markers for anybody across Canada. The exact same application process happens for the individual. The difference is really the security that's in that. Off reserve, it would be the house. In a community, we're really relying on the guarantee from the first nation government.

[Gary Vidal, Conservative, Desnethé—Missinippi—Churchill River, SK]

I appreciate that. I understand the security issue there. That's very helpful.

Can you tell me how many first nations have gone through? Is this a very common relationship that you have with many first nations or is this a new venture? If it is, how fast is it growing?

[Clio Straram]

It's a good question.

We started this program a long time ago in 1995. Now, over 100 communities are participating in the program. I would say that the growth rate of this program really just depends on how much communities want to sign up for this program. I do think there is a lot of opportunity here for continued growth.

I should note that RBC is also being represented. Really formalized programs like this are at BMO and at RBC. The other institutions don't have formalized programs. That is another component of the equation.

[Gary Vidal, Conservative, Desnethé—Missinippi—Churchill River, SK]

Thank you.

You led me right into my next step here. I wanted to go to Ms. Antoine.

You talked about some similar programs that you've been working on. I want to give you the chance to answer the same questions, if you would like to. I won't take a bunch of time asking them; I'll just give you the floor.

[Tracy Antoine]

Absolutely.

RBC was the first to market with an on-reserve housing loan program such as this, in the early nineties. Clio and I cross paths often in the marketplace because we're out there doing the same kind of work in trying to overcome this housing crisis. We're not here as competitors. We definitely do support the housing crisis that we're talking about today.

At RBC, $200 million in contingent liability has been approved. We expect another $100 million to come through the door in the current fiscal and half of the next fiscal, just based on the existing relationships we have and everybody being focused on housing.

Access to infrastructure is always something that they feel that they need to overcome. Funding flows slowly through the current federal government infrastructure program, so at times we come to the table for the nation and provide bridge financing to help them build units.

This program is specifically built for those who are employed in communities. The affordable housing and low-income CMHC programs tend to support those who are unable to work or are on social assistance under the welfare system schematic currently delivered by Indigenous Services Canada.

We work hard through our bank programs to make affordable housing on reserve that is backstopped by the first nations guarantee. At times, RBC and BMO will risk share these facilities at a 70-30 split. We're looking at and talking about risk sharing at a higher rate as well, so that this makes more for those communities that have infrastructure funding in place and available to build as fast as the infrastructure is put in.

[Gary Vidal, Conservative, Desnethé—Missinippi—Churchill River, SK]

Thank you.

I'm just curious if—

[The Chair, Liberal, Marc Garneau]

I'm sorry, Mr. Vidal. Your six minutes are up.

We'll now go to Ms. Atwin.

I understand you may wish to share your time with Mr. Powlowski.

Go ahead. You have six minutes.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you, Mr. Chair.

Thank you so much to our witnesses for joining us today. I'm speaking from Fredericton, which is unceded Wolastoqiyik territory here in New Brunswick.

Ms. Antoine, I'll begin with you. Can you speak generally about why it was important for RBC, as a financial institution, to have a separate indigenous banking unit? Can you talk about where that concept came from and why it's important for your institution?

[Tracy Antoine]

RBC has had reconciliation initiatives at the forefront for many decades. We began relationships probably about 60 years ago with our first on-reserve branch. Since then, we've been listening and communicating with first nations communities across the country.

There are so many situations where we are able to help them, and we see a huge shift in the first nations communities swinging from a managing poverty perspective to a managing wealth perspective. We find that financial literacy is in demand, and value adds is something that is part of reconciliation. Housing is just one of the agenda items that we work on passionately, because we see the direct impact on their health based on overcrowded conditions.

COVID-19 brought back to the forefront how important health is, when you see such things as COVID and TB spread throughout a community very quickly, with high numbers based on overcrowding in itself. That is one way to start turning the wheel to having real social impact in a first nations community. It's very important to this organization.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you very much.

To Ms.—

[The Clerk]

Ms. Atwin, if I can interrupt.

I've been asked if you could slow your questions down a bit. Your video feed is not keeping up with your question. Slow your question down a bit.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you. I've been told many times that I speak too quickly.

We talked a bit about some of the programs through BMO and RBC that can help support first nations on reserve to qualify for mortgages. I'm wondering if there are any changes in legislation or policy that may be helpful to allow banks to provide mortgages.

Please talk about the policy side of things, Ms. Straram.

[Clio Straram]

When I look at what I see as an opportunity for changes that the government could make, aside from the barriers that exist with taking security on reserve and somehow figuring out a way to change that entirely, I have some other thoughts and general ideas that potentially could be used. For example, currently with the ministerial loan guarantees program, you can have one, two or three houses being approved for a community. Really, you're going to continue having significant housing shortage supply issues in these communities, because that's not the number of houses they need. They need a lot more houses than that.

Rather than dedicating this funding amount to so few homes, make it possible to redirect that funding to repay infrastructure financing, so actually lending money to build more than two or three homes in order to build 10 or 20 homes at a time, but using that annual funding as a source of repayment for those loans. That way, you're getting out the supply up front versus houses being built over 25 years. You're getting the houses up front and the repayment is happening over 25 years.

Another idea is incentivizing your own home, or owning your own home. Home ownership, I do think, is key. I've talked about our home loan program. I think it's key to alleviating some of the pressures on the housing shortages, because then you would have a multiple supply of housing. You have one on the government side, either through the indigenous government or our federal government, and then, on the other side, from the individual indigenous person, who's getting a loan and who's building their own home. It increases the supply of housing, because it's coming from different sources.

However, if, in your community, home ownership is not that popular or it's just not seen that often, and your best alternative to owning your home is living in one that has very little cost associated with it, I think it's important to encourage home ownership at the leadership level. When we talk about government changes, this could also be at the indigenous government level, where you see chief and council, elders, business leaders, all of these leadership people in the community, encouraging others to do the same for home ownership.

Another thought is reducing the cost differential. We talked about building homes in northern Canada or in more remote communities. The difference in the cost of building a home in Winnipeg versus northern Saskatchewan is substantial. That can also be very discouraging when you want to build your own home. Again, this comes to funding, but providing some sort of funding for this gap, to take away that barrier of the difference in the cost, I think is another opportunity to encourage home ownership.

My last one, which I feel is not groundbreaking, is around multi-unit residential buildings. Building more of these mid-rise buildings with smaller units would really increase supply. I think the standard of single family homes in our communities, detached homes, provides housing for a family, but we do have young people, elders; we have people who just want to live alone. Bachelor units, one-bedroom units, I think would be helpful and would appeal to a broader range of people. They would be more affordable and potentially also lead to more home ownership.

[The Chair, Liberal, Marc Garneau]

Thank you, Ms. Straram. Thank you, Ms. Atwin.

Mrs. Gill, you now have the floor for six minutes.

[Marilène Gill, Bloc, Manicouagan, QC]

Thank you, Mr. Chair.

I would like to thank the witnesses, Ms. Straram and Ms. Antoine.

On this committee, we have often heard that complex challenges require multiple solutions. So I'm glad to see that we have people from banking here with us.

I will mainly direct my questions to Ms. Straram, deferring to her experience as head of the Quebec region, among other things.

Ms. Straram, could you tell us more about your experience with indigenous housing and BMO services in Quebec?

For example, you could tell us about your client base and your projects. Then, of course, I will have more questions to ask.