Canadians should be familiar by now with the plaguing housing crisis in First Nations communities across the country. Many are remote communities that lack sufficient access to funding – be it governmental or
from traditional financial institutions – for housing, community centres and education. The funding gap for education alone between schools on reserve compared to provincially run institutions is nearly double.
Despite being rich in land, First Nations’ ability to fully develop it is limited. To say that housing in many of these communities is entirely inadequate is putting it mildly. The building materials and engineering of conventional homes are ill-suited for the climate and conditions of most First Nations communities. They are mould-ridden and
pose serious safety hazards to residents and while fixing the problem is a priority for the new federal government, it simply won’t happen fast enough for indigenous families living on reserve.
While access to some funding exists through government and bank loans, it’s a long and drawn out process. And without adequate and accessible capital, communities can get stuck in a cycle of socio-economic crisis.
This is where The Usand Group (USAND) steps in. USAND is a platform which offers alternative financing options for First Nations communities that expedites “shovels in the ground” and aims to ensure communities retain full ownership and control. Working in equitable partnership with leadership, the company customizes its loans with a “roadmap” process that addresses the community’s short term and longer-term goals.
A wide range of financing options are frequently leveraged by corporate Canada to advance business interests and prosperity. Yet, First Nations have traditionally only had access to government or simple banking products, limiting their ability to grow. It’s high time First Nations had the same menu of funding and financing options that every other non-indigenous business, entrepreneur and community has.
A recent example of the benefits of alternative financing and innovative housing is a partnership between The Usand Group and the Misipawistik Cree Nation (MCN), a community near Grand Rapids, Manitoba. The Saskatchewan River runs through the Nation and it never freezes, resulting in year-round moisture and a build-up of mould which has to be cleaned out every year. Mould can cause a number of respiratory illnesses, including asthma, allergies and build-up in the lungs.
When MCN band council decided to erect much-needed new homes for its residents earlier this year, it turned to USAND to step in and help. USAND quickly put together a new $11 million financing structure and negotiated with lenders on MCN’s behalf.
Under regular circumstances, there would be a lengthy delay in receiving the financing and starting the projects, but USAND knew how important housing was, how high the social costs were if housing wasn’t built, and the seasonal challenges of construction in northern communities. Which is why they arranged something called a bridge loan
within the financial package. The bridge loan will allow families to move into their new homes approximately 12 months earlier than they would have without it, and will be paid out by a chartered bank once the homes are built and the construction risks are settled.
This unique solution provides the funds to kick-start a project in the gap between when the bank agrees to provide financing and when the community actually receives the funds they need.
The homes have been provided through a partnership between USAND and world-renowned architect Douglas Cardinal in a new company called the Douglas Cardinal Housing Corporation. They use cross-laminated timber (CLT) an environmentally friendly material that is more fire-resistant than steel and more energy-efficient than traditionally constructed houses. The houses are also culturally designed, while the insulation and vapour barrier are on the outside of the house to prevent moulding.
Using CLT is a perfect solution for indigenous homes, especially in the northern regions – because the vapour barrier and insulation are outside the living space, moisture from inside drains away outside. The homes are durable, and stay warm which helps reduce energy bills.
Bridge financing is not new to the financial world – in fact, it’s standard practice for most non-indigenous businesses, but as mentioned it has been largely unavailable as a financial pathway for most First Nations.
It solves a key challenge in the building process for projects. When timing is of the essence due to a short building season, and completion results in a high community impact, such as housing, bridge financing helps pull forward the timing of these positive impacts so their effects can be felt sooner.
In the case of MCN, the Nation is receiving both short term positive impacts and a long term debt structure, which will allow them to better meet current economic and social targets, while further solidifying their foundation for future growth.
