Jeffrey Cyr, co-founder of Raven Indigenous Outcomes Fund, says outcomes-based financing is ideal for the needs of reserves.Boris R. Thebia/The Globe and Mail
Heating homes in the Fisher River Cree Nation in central Manitoba has long been labour-intensive and costly. Elders often need help gathering firewood during frigid winters, and other residents faced hefty bills for electric heat.
Over the past few years, that has changed with the installation of geothermal heating units. They haven’t just generated savings but have also spawned a small industry in the community, as members gained the training and certification to install and maintain them, said Sam Murdock, Fisher River’s director of operations.
Many of the units were paid for through an innovative tool called outcomes-based finance, or OBF, championed by an Indigenous impact fund as a solution for environmental and health problems.
“Because of the elders, we now have over 300 homes on geothermal,” Mr. Murdock said. “We also have our new school that’s all heated and cooled through the geothermal system, our business development centre is all geothermal and our car wash and laundromat. The list goes on in terms of the systems that we have in place.”
What’s more, OBF allowed Fisher River to complete the work without navigating government departments – a perennial slog for First Nations seeking to improve conditions.
“It was a very positive program. It’s not top-heavy with bureaucracy,” he said.
OBF is not a new concept. It has been used around the world. But Jeffrey Cyr, co-founder of Raven Indigenous Outcomes Fund, said it’s ideal for the needs of reserves. Rather than relying on government solely, the system involves arranging private, philanthropic and public capital to fund programs. Targets are spelled out, and when they are met, government reimburses the investors along with a small return.
The outcomes fund led the $5.1-million geothermal program at Fisher River and nearby Peguis First Nation, which brought together Indigenous non-profit Aki Energy, Canada Mortgage and Housing Corp. and Efficiency Manitoba to install the units.
On Wednesday, Raven Indigenous Impact Foundation, which owns 50 per cent of the outcomes fund, released a report quoting statistics that show global well-being is worsening even as government spending on human services keeps increasing. The report calls for an expansion of OBF in Canada.
Raven’s outcomes fund, which has raised $20-million, and the foundation are offshoots of Raven Indigenous Capital Partners, an impact fund that backs First Nations, Métis and Inuit enterprises, with the goal of bringing jobs and other benefits to the entrepreneurs’ communities. The venture-capital arm raised $25-million for its initial fund and $110-million for its latest.
The group formed the foundation to offer Indigenous partners research and education, and to seek ways to improve economic and health conditions in communities. Raven is also planning installations of solar panels and ground-source heat pumps for other reserves.
Despite decades of government spending, most economic indicators show problems worsening in Indigenous communities, Mr. Cyr said.
“So clearly, the programming that’s been put in place, mostly statutory programming by the federal government, in particular, is missing the mark. It’s not really meeting our communities where they’re at with things,” he said.
Typically, governments offer rebates to homeowners for energy-saving technology, but houses on reserve are community-owned, making financing more complicated.
Amy Tuck, manager of residential and Indigenous programs at Efficiency Manitoba, a Crown corporation, said each home under the program saves about 9,000 kilowatt hours each year with the technology. That equates to savings of $875 per year, for a total of nearly $110,000 a year that can remain in the communities, along with the know-how to keep the units running, she said.
Wednesday’s report by Raven Indigenous Impact Foundation, co-written by the University of Utah’s Sorenson Impact Institute, says health costs are rising unsustainably, and, according to the Organization of Economic Cooperation and Development, US$6.9-trillion is needed to be invested by 2030 if the world is going to meet its climate goals.
OBF is designed to help as governments struggle to spend efficiently, especially on tightly focused items. Some of its iterations include pay-for-success models and social impact bonds. The latter was first used in Britain in 2010, and since then, investors have plowed US$722-million into 275 projects serving more than two million beneficiaries.
The new report, which advocates for an increase in OBF in Canada, calls for more information sharing, support for service providers, as well as reviews of procurement and legislative frameworks. It also recommends establishing purchase funds for such programs. So far, limited awareness hampered its integration into government policy, it says.
In the geothermal program with Fisher River, Peguis First Nation installed 66 heating units. The community reaped the benefits while not having to shell out the money or deal with the limitations of Indigenous Services Canada, which could mean delays or insufficient funds, said Rob Forbister, an engineer for Peguis.
“There’s always an issue with Indian Affairs and because there’s only so much money that they have available it doesn’t go around to every place that needs it,” he said. “It’s a priority list they have for every community in Manitoba, because the region only gets X amount of dollars. They can only stretch that so far.”
Some government-run programs work for Indigenous people, and there is no need to replace them all, Mr. Cyr said, “but over the past two centuries, governments created the reserves system and supported residential schools, so they can’t be expected to get everything right.”
Among other programs, Raven’s outcomes fund is targeting Type II diabetes in four communities that make up Island Lake Anishininew Nation in northern Manitoba. Up to 95 people are diagnosed annually, adding more than $25-million in costs to the health care system, Mr. Cyr said.
That OBF program, slated to start later this year in the First Nation, involves setting goals to reduce blood-sugar through changes in diet, exercise and life-coaching. The initiative includes building a hub for the community for nursing and other health needs.
“We have a scientific advisory group with endocrinologists on it, community elders on it. The first thing that needs to happen is the interventions, the programming,” Mr. Cyr said. “It needs to be culturally relevant and built within the community’s context or people just don’t do it, frankly.”