Where will the money come from to buy ownership in a project? Will it be from Canada? Will it be other investors? A7. Institutional investors that participate in the global capital markets would provide the money. This capital would be provided in the form of a bond issuance with the proceeds being lent to participating First Nations. It is expected that Canada would issue a financial guarantee as a form of security to bond holders that their loans will be repaid. Invitation to a meeting taking place in Terrace, BC on February 5 & 6, 2015. Keep an eye on this group....They are recruiting Hereditary Chiefs and Matriarchs to sign an MOU. Furthermore take note on the Loans and Borrowing Funds to enter into this process! More debt that nobody wants. They already have us in debt within the BC Treaty Process now they want us to borrow more? On behalf of Chief Joe Bevan, Kitselas First Nation (Host Territory), Chief Martin Louie, Nadleh Whuten, and Hereditary Chief Wihaliy’te Theresa Tait Day, Wetsuwet’en Nation, Invitation to a meeting taking place in Terrace, BC on February 5 & 6, 2015. This meeting is a follow up meeting to the meetings held in Prince George, BC on December 4 & 5, 2014. We will be discussing the vision and purpose behind the Memorandum of Understanding document that was signed by 34 Chiefs and Clan representatives as well as discussing ways in which we can form a steering committee and how to move forward. Please note that the room capacity at the Terrace conference is extremely limited. Accordingly, we therefore request that First Nations send the appropriate representative(s) to this very important meeting. Please be advised that resources are only available to cover the cost of transportation and accommodation for two (2) representatives from each invited First Nation to attend this meeting. Please RSVP by return email or by phone to Laurie Bonacci at 1-604-449-1610 before 3 pm on Friday, January 23, 2015. Please advise if you are able to attend the conference and whether you require hotel accommodations for 1 or 2 nights. Memorandum of Understanding Preamble ● Recognizing our territory’s great resource wealth, the increasing global demand for our territory’s minerals and hydrocarbons, the scope and depth of climate change and other environmental pressures and challenges facing our territory; ● Mindful of the core rights of our First Nations as recognized by recent court decisions(Tsilhqotin), as provided for in a variety of other legal and political instruments and mechanisms, including land rights settlement legislation, land claims agreements (treaties), and self-government, intergovernmental and constitutional arrangements; ● Respectful of the ingenuity, resilience and wisdom of previous generations of our people,confident of the ability of every generation of our people to adapt to change, and determined to provide for the material and cultural well-being of our children into the future. ● Acknowledging that the economic and social future of our communities rely on our ability to leverage opportunities and engage in business arrangements with governments and industry. ● Entering into this Memorandum of Understanding does not affect or infringe upon aboriginal rights and title or treaty rights. Our Responsibility to Our People and Our Environment ● There are natural resource projects proposed for our traditional territories (for example natural gas, mining); ● If proposed projects go ahead they will have significant economic and environmental impacts on our territory; ● We are considering a number of accommodation options related to these proposed projects; ● We have a responsibility to our people to ensure that our community standards are met. This includes receiving a fair share of the benefits from projects, and ensuring that our land and water is safe from the impacts of resource developments by asserting our influence in the environmental and regulatory processes; ● One option that would allow our community standards to be met is by owning a portion of the proposed projects; ● We want to fulfill our responsibility to our First Nations and do the necessary work to consider costs and benefits of options before us. Working together ● We are committed to working together to better understand how an ownership approach might work; ● We are interested in understanding how a federal government loan guarantee might be used to access capital so that we could purchase equity; ● We are interested in understanding how the First Nations Fiscal Management Act (FMA) and the services of the First Nations Financial Management Board and the First Nations Finance Authority could be used in combination with a federal government loan guarantee to access capital;2 ● We are interested in comparing and contrasting the value of different accommodation options; ● Each community shall appoint one representative to participate in a steering committee; ● A steering committee shall set terms of reference for technical work; ● Technical work shall be reported back to the steering committee; ● A steering committee and technical work shall be resourced by government. Some questions and answers about the Steering Committee Q1. Why should we consider the option of forming a Steering Committee? A1. If a group of First Nations decides to work together to get an ownership stake in a natural resource project, then there must be a body that represents the interests of that group of First Nations. Q2. How are people appointed to the Steering Committee? A2. Options for a steering committee structure are being considered at the meeting to be held on 5-6 February 2015. Two options have been prepared to stimulate discussion in advance of the meeting. Q3. What are the terms of reference for the Steering Committee? A3. The MoU should guide the development of a terms of reference. To date eleven elected Chiefs and 22 hereditary Chiefs have signed the MoU. The First Nations that sign the MoU shall be responsible for developing the terms of reference or ‘collaboration agreement’. A sample terms of reference has been prepared for your consideration. Q4. How are decisions made by the Steering Committee? A4. It will be up to the First Nations on the Steering Committee to set out a process for making decisions together. A number of examples and models will be available for the consideration of the members of the Steering Committee. Q5. What is the budget and work plan for the steering committee and technical work? A5. A work plan and budget shall be prepared and submitted to the federal and provincial government to seek funding to support the Steering Committee and its technical work. Q6. How often does the steering committee meet? A6. The Steering Committee shall meet as scheduled in a work plan that will be developed by participating First Nations. Q7. How does the Steering Committee communicate with elected Chiefs, hereditary Chiefs and membership? A7. It shall be the responsibility of each Steering Committee member to report back to their respective caucus group of First Nations - including elected Chief, hereditary Chiefs and membership. Some answers to questions raised by First NationsQ 1. What if the private sector company (for example: a pipeline company) doesn’t want to sell part of the equity? A1. It could be a condition of approving a project for a portion of the equity to be made available to First Nations. Q2. What are the potential risks to the leverage of a collective of First Nations when negotiating with the Provincial Government? A2. If signing an agreement with the Province is an indication that you have provided consent for the project to go ahead, then signing the agreement may reduce your ability to work together with other FIrst Nations on that project or to acquire a government loan guarantee and to purchase equity in the project. Q3. Is there one particular natural resource project (for example: an LNG project) that the loan guarantee will apply to? Which project are we talking about? A3. The loan guarantee could apply to different natural resource projects (such as LNG, mining, etc.). Q4. Do we need to deal with overlaps and boundary issues before we strike a business deal? A4. It is possible to establish a business deal first, and then determine how to share benefits with First Nation partners. There are already examples of First Nations in BC that have done this. Q5. How would First Nations manage the financial risks associated with ownership? A5. Robust risk management analyses would need to be undertaken. Under the proposed model, risks could be managed by: ● Using typical project debt financing; ● Protecting against cost overruns by having an option to purchase once the project is operational; ● Matching the ownership stake to the government loan guarantee amount; and, ● Entering long-term contracts with highly creditworthy shippers. Q6. Are we extinguishing our Aboriginal rights and title if we get a loan guarantee? A6. No.Some questions and answers about the role and mandate of the First Nations Financial Management Board Q1. What is the FMB? A1. The First Nations Financial Management Board (FMB) is a First Nations organization that is working with over 100 First Nations across Canada to improve their financial management systems and provide access to capital. Q2. What is the purpose / mandate of the FMB? A2. To set standards for financial management, to certify financial management systems, and to support social and economic development of First Nations. Q3. Why is the FMB involved in the February Chiefs’ meeting? A3. First Nations leaders have made requests to FMB to provide support for this meeting. Q4. Why would the FMB be involved in getting the money that would be required to purchase ownership in a major project (for example: a natural gas pipeline)? A4. The First Nations Limited Partnership (FNLP) previously tried to get money for equity in the Pacific Trails Pipeline (PTP) and found it would cost 11.25%. Getting money through the First Nations Fiscal Management Act (FMA) was achieved earlier this year at a cost of 3.79%. This involves working with the First Nations Finance Authority (FNFA) and FMB. Working with the FNFA and FMB could allow a First Nation to access capital at the same low rates. Q5. Why is the FMB included on the Memorandum of Understanding? A5. The FMB is a key component in the borrowing process established by the First Nations Fiscal Management Act (FMA). It is possible that this process might be useful in allowing a participating First Nation to get the money required to purchase its share in the pipeline. Based on the example above, there would be an interest rate savings of over 7%. This would translate into reduced debt service costs and these savings would increase the return on investment for participating First Nations. Q6. How would the FMB be involved in getting the money that would be required to purchase ownership in a natural resource project? A6. FMB could certify the financial management system and financial performance of those First Nations that wanted to own a share of the project. This would provide comfort to your members, lenders and to investors that the money earned from ownership in a project would be managed in a good way and that any debt obligations will be repaid over the agreed upon term. Q7. Where will the money come from to buy ownership in a project? Will it be from Canada? Will it be other investors? A7. Institutional investors that participate in the global capital markets would provide the money. This capital would be provided in the form of a bond issuance with the proceeds being lent to participating First Nations. It is expected that Canada would issue a financial guarantee as a form of security to bond holders that their loans will be repaid.
Posted on: Sat, 17 Jan 2015 00:43:52 +0000
Trending Topics
Recently Viewed Topics
© 2015