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Business ᐊᐱᒥᐱᐦᑖᑭᓂᐧᐃᒡ ᐋᐱᑎᓰᐧᐃᓐ

First Nations Bank CEO discusses the heated housing market

BY Ben Powless May 24, 2022

The First Nations Bank of Canada (FNBC) welcomed a new investor and a new slate on its board of directors in April. The bank announced that Ermineskin Cree Nation’s Neyaskweyahk Group of Companies Inc. (NGCI) bought an 18% share in the institution, increasing Indigenous ownership in the bank to 87%.

“We are excited and most proud of this venture as it sets out to promote economic opportunity for Ermineskin Cree Nation. With this opportunity comes greater success for sustainability and growth,” said Chief Randy Ermineskin.

The bank, founded in 1996, originally had only two investors, TD Bank and Saskatchewan Indian Equity Foundation Inc. By 2009, the bank had issued new shares to Indigenous communities and organizations that diluted TD’s shares and ensured the bank was majority Indigenous-owned.

FNBC also announced the appointment of four new members to its board of directors, including Rod Hick, Brenda LaRose, Danika Littlechild and Perry Bellegarde, the former National Chief of the Assembly of First Nations.

“We would like to thank Mark Wedge and Ken Toner, who are retiring from the board, for their many years of guidance and advice which has been instrumental in the success of the Bank,” Bill Namagoose, Chair of the Board of Directors, said in a statement. 

Bank CEO and President Keith Martell said that the question of Indigenous ownership was important. “That’s our main focus. Our bank was created in 1996 to serve First Nations, Inuit and Métis communities which were significantly underserved in markets we wanted to move into.”

Martell said that initial discussions involved the James Bay Cree who saw a lot of similarities in terms of an underserved population. Matthew Coon Come joined the original board of directors, while Namagoose has served on the board since 2002.

The new investment by Ermineskin’s NGCI gives the bank more capital that it can use to grow its deposit base and issue more loans, Martell said. The other way that the bank can earn capital is by earning income that it doesn’t pay out in dividends to investors. Martell said that the James Bay Eeyou Corporation owns nearly 13% of the bank, while the James Bay Board of Compensation owns about 6%. 

Some loans are in the form of mortgages. Asked about the current housing market, Martell said the decision to buy a home in current conditions is “a personal decision” even if some people say the market is “too hot.”

He said the bank has been talking with Cree governments for years about the importance of home ownership because it “meets the housing need, and there’s never going to be enough government funding to meet all the demands, especially in prosperous communities like the Crees’.” 

Many First Nations communities have social housing, so people don’t have an equity stake in their home, and therefore can’t turn their house over to the next generation, use it as a vehicle for savings or access the equity in their homes. 

“That isn’t traditionally how it used to be,” Martell pointed out. “People used to build their own homes. Then it got to where homes are all owned by First Nations governments.”

Since few people can afford to pay for their homes in cash, they often need a bank mortgage that depends on a person’s debt service ratio. This essentially tells the bank if a person will be able to afford to make payments on all their debts with their current income. They also want to see that an individual can make an initial down payment. 

“We want people to succeed in paying for their home so we assess their employment and tell them if they can qualify for the loan,” Martell explained. “Typically, it was hard for people in First Nations to qualify for a loan. Part of the security for a mortgage is for the bank to take back the home, that wasn’t possible in many First Nations since land wasn’t owned by an individual.”

That’s why Martell thinks the Cree communities have created a unique environment by allowing home ownership and transfer of land that doesn’t rely on the First Nation guaranteeing all the mortgages, which can create a huge risk for the community. “What the James Bay Cree are doing is creating one of the most advanced housing markets in Canada,” Martell added. 

But it still comes down to a personal decision. “For most people in Canada, it’s the biggest financial decision you’re ever going to make,” Martell added. “There’s always going to be ups and downs with costs of labour and lumber, but the biggest factor is personal circumstances,” including whether someone has plans to remain in that community, their employment outlook, and whether they can pay back the mortgage. 

Asked about plans to expand beyond the three Cree communities the FNBC currently operates in, Martell said they are always willing to expand, and they currently they have customers in nearly all the Cree communities. 

“We’ve had James Bay Cree communities be a big part of the bank for many years,” he said. “We have good relationships with many customers and shareholders. We enjoy doing business in the region. It’s good for the region and good for a bank like ours.”

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Ben Powless is a Kanien'kehá:ka and Anishnabek writer and photographer, currently living in Ottawa. He has a degree in Human Rights, Indigenous and Environmental Studies from Carleton University.