A few years ago, Chief Darcy Bear and Whitecap Dakota First Nation formed an important relationship with Bank of Montreal. Unlike other domestic banks, BMO offered Whitecap Dakota First Nation longer, more favourable lending terms for on-reserve infrastructure projects. Whitecap Dakota First Nation, located in close proximity to Saskatoon, has flourished and continues to be a big success story. The First Nation, which boasts a top-rated golf course and casino, has experienced a 65.9% decrease in unemployment over recent years and attracts more than one million visitors annually.
New land claim income flowing into aboriginal communities, paired with economic booms in some First Nations due to recent legal decisions giving bands more say over resource development, is increasing the demand for aboriginal loans. BMO and TD both have over $1 billion each in First Nations claims. TD Economics is predicting that the nationwide income of aboriginal households, businesses, and bands, will experience a 50% growth rate over 5 years, and will total $32 billion by 2016.
According to André Le Dressay, who is the director of the Tulo Centre of Indigenous Economics, resource revenue and land claim settlements have allowed some aboriginal communities the opportunity to overcome a ‘development trap’ and move forward with large infrastructure projects. Increases in these communities credit risk ratings secures further financial resources and encourages economic development and autonomy.
Numerous banking leaders, such as Clint Davis, vice-president of aboriginal banking at TD, have identified this upward trend within aboriginal banking as an ‘emerging market’. Going forward, Canadian banks are looking to embrace the momentum being gained by aboriginal communities and offer products and lending options that appreciate this evolution.