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Email this6:04 am
January 25, 2016
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A short commentary from a northerner concerning the establishment of public infrastructure bank in the north, for the north; similar structure to the original (pre-1974) mandate of the Bank of Canada: Nunatsiaq News.
9:40 pm
October 21, 2013
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Interesting idea.
Do you think MP Tootoo's recent fall from the graces of the Liberal Party might make this idea more difficult to get across? Is he behind it?
12:10 pm
January 25, 2016
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Our MP has been publicly called out to resign on numerous occasions since truthful details of the story broke, and I think it will be quite difficult for him to repair his image and for people ignore and move on. Having no true mandate, much of the attention has focused his actions and calls for resignations, and real priorities are probably on the outside looking in.
During Electoral Reform discussions in Iqaluit, few attended (media only) this poorly organized and untranslated event. Our MP he should have informed the attending Minister and her staff about the details of holding public forums in Nunavut...maybe too soon after his problems became public knowledge and he did not want a room-full of attendees pestering him.
I did not vote Liberal.
12:27 pm
October 21, 2013
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Interesting. Thanks for your "insider" perspective.
1:03 am
August 4, 2010
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I'm not sure the problem is difficulty in obtaining capital. The population of Nunavut is under 40,000, and most significant public infrastructure projects are carried out by the federal or territorial governments. The territorial government has access to Canadian capital markets, and the limiting factor is the level of capital expenditure and debt its finances can support (something on the order of 90% of the territorial government revenues are federal transfer). Like the other territories, Nunavut would have a debt ceiling on borrowing, but I don't think they have reached this yet.
Especially in Nunavut, most communities (all very small) have little or no scope for borrowing and repaying significant capital funds outside their funding from the territorial government.
The north has any number of infrastructure needs, but the main question is who is going to pay for them, rather than finding the actual capital once that's been figured out.
6:11 am
October 21, 2013
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The concept seems to be to NOT borrow from existing banks, but to borrow from local people and other local entities (perhaps from non-local as well?). I'm sure they could drum up several million dollars locally even with a small population if it were organized properly. Even 40K people will, together, have a significant sum. They want to leverage that money in the same way that other banks do, as opposed to being a piece of another bank's lending system. As the author said, they can then "loan the initial capital out many times over". This should be a lot better deal for them than borrowing from existing sources.
Banking seems to be quite a profitable business to be in, to judge from what goes on in the rest of the country. This sounds more like a credit union in some respects but instead of going back to members, the profits all go into infrastructure. They don't have the cost of paying dividends to shareholders.
It would require some skilled people though, to make it work. By the time they'd get it going, the federal govt might have changed again and we might have one that was less committed to helping the north or funding any kind of infrastructure! The author figures the infrastructure will be significant in creating jobs, wealth, money back in the bank etc.
I don't know if this could work, but I like the effort to be more self-sufficient and support their own community with their own money.
6:46 am
August 4, 2010
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Any sort of "credit union" type of thing would be completely different from a public infrastructure bank as envisioned here. The former, if feasible, might provide small business and microfinance loans to the private sector, although there would be all sorts of issues about risk control, and many other things. The North is quite a small and, um, special place economically. As an aside, here is an interesting and certainly not unique story of the sort of financial, political and whatnot from Cape Dorset, a community of under 1500 people (and probably #10 on the population list): http://www.nunatsiaqonline.ca/.....d_company/
For an infrastructure bank, you are talking about much larger scale. That whole leverage thing really means that given some capital, the development bank is able to go out an borrow on the larger markets using the credit of the supporting government(s) more cheaply than the eventual recipients of the loans. In this case, the recipients building infrastructure are either directly or indirectly the Nunavut government anyway, which has a problem of repayment capacity much more than access to affordable capital.
2:55 pm
October 21, 2013
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I didn't mean that it was structurally like a credit union. It was more about intentionality.
There are lots of issues, but we do need to find a way to get something done up there, both in terms of infrastructure and banking services
.
A good friend of mine lives in another fairly remote area of the country. They have a credit union, as the Big Banks won't serve them. The government has started enforcing a staffing rule which they can't meet because they are too small, and so now they might have to close.
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