Ernie Daniels has travelled a long road from a residential school in the Northwest Territories to the centre of Canadian finance at the Bank of Canada’s board table.
The 67-year-old accountant is a trailblazer: after three and a half decades in financial management (including 11 years as chief executive officer at the First Nations Finance Authority), Daniels became the first First Nations person appointed to the Bank of Canada’s board of directors in January. His appointment comes at a critical time for the bank, which is currently reviewing its policies and processes to assess how it can contribute to economic reconciliation with Indigenous communities.
The move is both a testament to Daniels’s business chops and a signal of the emergence of a generation of Indigenous finance leaders who are investing in major energy and infrastructure projects in their communities and on traditional territories.
“I just focused on doing the job that I had in front of me to the best of my ability,” Daniels says in a telephone interview from his home in Kelowna, B.C. “I followed other people who blazed a trail.”
Daniels is a member of the Salt River First Nation, a mix of Cree and Chipewyan people centred in Fort Smith, Northwest Territories, where he fondly recalls joining the fall hunt with his father. Life took a turn when his parents sent him to a government-run residential school for high school in Yellowknife, where corporal punishment and suppression of Indigenous culture was the norm. He escaped the worst of residential school abuses, in part, he believes, because he entered as an older boy who was able to fend for himself. The federal government opened that school, Akaitcho Hall, in 1958 and in 1969 transferred it to the territorial government, which operated it until 1994.
“Missing your family, not being around your family, was very difficult. But I learned to look after myself pretty quickly and became pretty disciplined,” Daniels recalls. “I was big enough that I could handle myself.”
Upon graduating, he was offered a job with Environment Canada as a hydrometric survey technician monitoring water levels and flows in northern lakes and rivers. In school and in his work, he discovered he had an aptitude for math and pursued accounting, first at Aurora College in the Northwest Territories and then at the Northern Alberta Institute of Technology in Edmonton.
When he became a certified general accountant in 1991, he was one of a few First NationsIndigenous people in Canada to have done so. “It just wasn’t a profession that Aboriginal people got involved in,” he says. “But I have always been willing to take the opportunities that were put in front of me.”
Daniels went on to work in private accounting firms and from there took on management positions at Indigenous organizations such as the Aboriginal Financial Officers Association and the Aboriginal Healing Foundation.
Leading First Nations finance
But it is at the First Nations Finance Authority (FNFA) that he has really made a mark on the financial opportunities available to First Nations.
The FNFA was formed in 2012 as part of a Harper government effort to encourage better fiscal management on reserves.
As CEO of FNFA, Daniels is focused on closing the gaping infrastructure gap – estimated at $350 billion – that exists between Indigenous communities and the rest of Canada. That includes everything from energy supply and clean water to healthcare infrastructure, access to digital networks and the banking system. Under the First Nations Fiscal Management Act, First Nations can qualify for FNFA access to capital by adopting a series of measures that demonstrate sound management, including third-party validation of financial practices and auditing of the nation’s books.
Roughly half of the 630 First Nations in Canada are members – or “scheduled” under the First Nations Fiscal Management Act, which gives them access to FNFA’s borrowing ability.
Daniels and the FNFA board have long urged Ottawa to open up new tools to financing, such as leveraging future government transfers for current borrowing. Such a measure would help communities access the significant capital they need to be able to carry out big infrastructure projects on their territories that are critical to their well-being, and it is long overdue.
To emphasize the urgency, Daniels led a delegation of some 30 First Nations leaders to Ottawa last winter to lobby the Liberal government to include a mechanism in this year’s budget that would allow greater borrowing power for their communities. Although it had broad support, including from the House of Commons finance committee, the measure did not make it into Finance Minister Chrystia Freeland’s March 28 budget, much to their disappointment.
I followed other people who blazed a trail.
“I don’t see it as a hard ‘no,’” Daniels says. “We will continue with whatever means we have available to pursue this.” He notes that the Liberal government has vowed to close the infrastructure gap by 2030 but that federal revenues alone won’t accomplish that goal. Conservative Party MPs have endorsed the borrowing concept.
Under Daniels’s guidance, FNFA has also participated in some of the largest Indigenous-led business deals in the country. That includes the acquisition by the Membertou First Nation and other East Coast Mi’kmaq communities of a 50% interest in Clearwater Seafood along with the fishing licences held by the corporation. Clearwater Seafood is one of the biggest shellfish operations in North America, and the inclusion of licences in the deal has led to expansion of First Nations’ fishing fleets.
In addition, FNFA provided financing for Henvey Inlet Wind, a partnership between the Henvey Inlet First Nation and Pattern Energy. The project on the northeast shores of Georgian Bay has 300 megawatts of capacity plus transmission and is billed as the largest First Nation wind energy partnership in Canada.
Daniels and the FNFA stepped in when the Henvey Inlet project was experiencing a $100-million cost overrun and secured a loan that kept financing costs at a reasonable level.
Daniels “was a quick study,” says John Beaucage, vice-president of Nigig Power Corporation, a wholly owned subsidiary of Henvey Inlet First Nation. “He understood what we needed and found a way to solve the problem that allowed benefits to continue to flow to the community.”
Bank of Canada mandate
As a Bank of Canada director, Daniels has a broad mandate to ensure that the central bank is managed in a manner that benefits all of Canadian society. Directors have no input into monetary policy. And indeed, the banks’ setting of interest rates and other policy tools use broad brushstrokes to reflect national conditions.
However, senior bank officials have acknowledged that in both setting of monetary policy and provision of financial services, impacts on Indigenous communities must be considered. In a May 2022 speech to the National Aboriginal Capital Corporations Association, then-deputy governor Lawrence Schembri said that “economic reconciliation” is part of the bank’s responsibility. “Fostering Indigenous inclusion falls squarely within the bank’s mandate to promote the economic and financial well-being of our country and all the peoples within it,” said Schembri, who has since retired from the central bank.
He noted that lack of access to credit and capital for Indigenous communities remains a barrier to their economic progress. That includes the lack of banking infrastructure, whether branches, automated teller machines or online services for the more remote communities.
The Bank of Canada is developing a reconciliation action plan to address its areas of jurisdiction and to recommend other actions needed to bring financial capacity to Indigenous communities. A draft plan will be released for consultation “in due course,” bank spokesman Alex Paterson said in an email.
However, like federal promises to close the infrastructure gap, addressing the financial-capacity gap will take pragmatic, long-term solutions and a change in the paternalistic attitudes that have long dogged Canada’s relations with First Nations.
As for Daniels, he likes to focus on getting results rather than revisiting history. “Once you can understand what the issue is, it’s easier to find a solution,” he says. “If you tell me I can’t do something, I’ll say, ‘I can find a way.’”
