Article misleading, says authority

Page 5

Dear Editor:

Across Canada First Nations are struggling to break the shackles of colonialism and give meaning to self-determination.

Today some 90 First Nations collect property taxes from leaseholders and others occupying their lands and use these revenues to improve the quality of life within their communities. Approximately $40 million is raised each year.

The article in the October 2002 Windspeaker-"Government setting a trap, says professor"-concerning the First Nations-led Fiscal Institutions initiative is misleading. The creation of four national fiscal institutions is part of a broader First Nations' agenda to establish a new fiscal relationship with Canada; an agenda that supports the rights of our people to govern ourselves with all the necessary tools to do the job properly. The creation of the institutions is a direct result of our experiences working and living in our communities and seeing the impact of not having the basic tools of government in place.

Soon after First Nations began collecting property taxes some 12 years ago, it became very evident that our governments did not have adequate jurisdiction to use those tax dollars to lever long-term debt and to build needed infrastructure, such a sewer and water. While infrastructure was being built in neighboring communities to attract investment and economic development, our governments were sitting by and watching.

Governments typically raise capital by issuing debentures (unsecured bonds). Our governments do not. Today there are legislative impediments and harsh economic realities that make the issuing of bonds by our governments not possible despite the fact that some of our communities now have secure revenue streams such as property tax.

In looking for a solution, the First Nations Finance Authority (FNFA) was born. The philosophy behind the FNFA is that by 'pooling' our borrowing requirements and issuing bonds through the authority we can provide affordable capital to participating First Nations based on a strong collective credit. Individually our nations are small with little economic clout; together we are powerful.

Professor Lazar asks, 'Why would First Nations want to borrow money?' The answer for communities collecting their own revenues is simple. By investing in our communities we take control of our own future and create our own opportunities. All responsible governments borrow money for legitimate government purposes and to grow their economies. It is part of being a 'nation.' Spreading the cost of infrastructure over a longer term and repaying the debt with predictable and stable revenue is just prudent management.

It was suggested that accessing capital in the way other governments access capital could reduce Canada's financial obligations to First Nations. While it is true that Canada has historical and legal responsibilities to assist our governments and does provide some capital for limited purposes, Canada does not provide the capital to build the infrastructure required to support economic development.

Communities that currently raise their own revenues by collecting property tax need to use these secure revenues to lever the money required to make the type of investment required for economic development. To this end the FNFA will in no way reduce federal obligations for band support capital. On the contrary, the four institutions as a whole are intended to make a stronger case for increased federal transfers to support First Nation governments in those areas where support is most needed.

Finally, to be very clear, the FNFA is not intended to be a financial 'cure all'; it was never conceived of in this way. Rather it is a special problem and a specific solution that was developed by and for us. Respectfully, the only 'trap' that we risk falling into is not having faith in our own governments and our own people. It is time to take control.

Yours sincerely,

Deanna Hamilton, president

First Nations Finance Authorit