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What is the FNFA?
The FNFA is a non-profit finance authority that serves First Nation governments. It is one of four First Nation led national institutions legislated under the First Nations Fiscal and Statistical Management Act that represents an important component of the First Nation’s agenda to establish a new fiscal relationship with Canada. The four institutions are: First Nations Finance Authority (FNFA), First Nations Tax Commission (FNTC), First Nations Financial Management Board (FMB) and First Nations Statistics (FNS)
Unlike the federal, provincial or some municipal governments, it is very difficult for First Nations to get low interest 20-year loans to cover the cost of basic infrastructure, such as water and sewer systems. This inability to access affordable capital, affects the ability of First Nation governments to undertake proper planning so that infrastructure can be sized and installed to meet the future anticipated needs and not just current needs. Without proper planning and access to affordable capital the costs become excessive and projects are not undertaken.
The FNFA improves access to capital by pooling borrowing through greater cooperation among First Nations, creating advantages of size and diversifying risk and revenue streams and by supplying expertise and sophisticated financial opportunities to First Nations. By pooling, the cost of borrowing is significantly reduced making capital affordable to all First Nations including small First Nations.
The strength of the pool is based on its size and on the strength of the First Nation government revenues available to repay the debt. The strength of the pool is also maintained by the independent quality assessment of the FMB, responsible for overseeing participation and creditworthiness.
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