About Mike Bonshor

Posts by Mike Bonshor:

Indigenous Governments – Strategic Planning….Why?

Indigenous Governments – Strategic Planning….Why?

Over the last 20 years, in the course of working with First Nation, visiting the offices of [exhausted or interim] Band Managers and other senior staff, I have come across many Strategic Plans and Economic Development strategies were never fully implemented, and in some cases began to gather dust from the time they were completed.

While this may sound familiar to many First Nation communities, it also resonates in non-First Nation governments.

In a recent study recently published by McKinsey & Company[1] which looked at the strategic planning experience of governments across 18 countries, they found that 80% of government efforts failed to achieve there plans objectives.

The report outlines a number of reasons why mainstream governments fail to achieve progress against their objectives or fail to even address them. Some of the reasons include setting unrealistic objectives, as well as putting too much focus on developing the perfect plan, rather than focusing efforts on implementing it. As well, the report speaks to the lack of change management skills and experience required to enable successful execution of plans.

From a First Nation government perspective, where there is less access to the necessary resources and capacity to carry out the day-to-day; it is understandable that there can be challenges in executing their strategic plans. To know that even when substantially better resourced governments fail four out of 5 times.

The study speaks to the increasing importance in having a strategic view in which to carry out the daily tasks, especially in light of increasing pressures to transform and adapt. Mainstream governments; reportedly deal with demographic shifts, high levels of inequality within the changing shape of the cities they govern.

All First Nation governments can also speak to these challenges and many more, never-mind the challenges of governing the current areas of jurisdiction, imagine adding to this the challenge of obtaining full jurisdiction of your lands, resources, and population!

What I observe from these two contrasts is that First Nation governments need to be easy on themselves, understand that the daily obstacles and challenges they face are universal to a minimum, and considerable from a comparable standpoint.

The McKinsey study provides a few recommendations for success based on their extensive research. Their findings indicate that successful execution of strategic transformation objectives is enabled when the following areas are in place;

  • Committed Leadership
  • Clear purpose and priorities
  • Co-ordination & Cadence:
  • Compelling communication
  • Capability for change

 

All of these can be relevant in First Nation situations as well. A First Nations Strategic Plan should and could be the most influential document that leaders reference. At the end of the day, it’s all about accountability. All First Nations assign portfolio’s to Chief and Council members, in the past 20 years I have never come across a First Nation council assigning responsibility of the execution of the community’s strategic plan to a councillors portfolio. Perhaps this is the first step.

Communication is a key issue; the findings show that transformation success is enabled when there are effective communication processes and channels between leadership, management, staff and community membership.

I would also add that this needs to be on a constant basis, once every 3 to 5 years, during community or strategic planning exercises isn’t effective; and doesn’t benefit the community overall.

To the last point, the capacity of your First Nations government requires an honest assessment. To truly transform a community and administration, expertise and experience in change management is required, this is a skillset that few First Nation employees have.

To summarize, before your First Nation government embarks on another Strategic Planning exercise, I would recommend taking a look at the success of the last strategic plan, or economic development strategy, that was issued. How successful was the community in executing the plan? reaching the objectives set out? If success was limited, then take a look at what needs to change in the organization to enable successful change and improvement.

Focus on successful execution of realistic strategic plans is now the trend. First Nations, to achieve the desired level of self-determination need to continually evolve and change for the better. In First Nations communities, change isn’t inevitable it’s utterly necessary.

 

Michael Bonshor, CPA

Visions Financial Services/Ki’mola Indigenous Capital

[1] Delivering for Citizens Discussion Paper June 2018

Alberta Indigenous Energy Opportunities

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Alberta Energy Market Update:

The Province of Alberta has committed to adding over 5,000 MW of renewable energy capacity by 2030. This will generate require more than $10 Billion in investment

The Alberta Electric System Operator (AESO) has officially launched its 2nd procurement stream – REP Round 2 which is focused on providing contract opportunities to the Indigenous communities in Alberta.

Key elements of this round are;

  • AESO will procure up to 300 MW of renewable generation capacity
  • Each project will require a minimum of 25% Indigenous Equity ownership (min of 3 years)
  • Projects to be operational by June 2021

Economic Impact: At 300 MW, it is estimated that the amount of Indigenous equity required per AESO requirements could be in the range of $150MM to $200 MM.

Approach:

Ki’mola Indigenous Capital is seeking investment and partnership opportunities with First Nations who are developing and involved in energy projects in their territory

As a partner, Ki’mola can provide project capital, including the funding of development costs. Our group has extensive Project Development and Project Finance experience with Solar, Wind and Small Hydro projects.

Indigenous Clean Energy

www.visionsfinancial.ca

Clean Energy and First Nations:

Had an opportunity recently to attend, and unexpectedly; speak, at the recent Clean Energy BC’s First Nations Workshop – ‘Advancing Indigenous Opportunities in Clean Energy’. It was encouraging to see the numbers of First Nation participants from across the Province, and see some familiar faces. That being said, I couldn’t help but sense the frustration by the group. What’s been happening is that First Nations, bolstered by Provincial and Federal funding, have been investing time and resources to develop projects in their territory.

Unfortunately I fear this is a road to nowhere in the current BC environment. I couldn’t help but notice that the preceding Clean Energy conference was much smaller than previous years. BC Hydro’s Standing Offer Program (SOP), for projects up to 15 MW, has as of August 2017, suspended accepting applications until further notice. With the Site C project moving ahead, creating more power generation capacity, I wonder how long this program will be suspended.

Contrast this with what is happening in Alberta and Saskatchewan. The Alberta government is currently working towards procuring 5,000 MW in clean energy by 2030. It recently announced the results of its first round of potential projects, which totalled 600 MW in wind projects.

In Saskatchewan they are promoting the development of 120 MW of solar by 2025 and 1,600 MW of new wind projects by 2030. As well, they have targeted set-asides with First Nation organizations within these targets.

Our group has developed and financed over 60 clean energy projects throughout Canada and the US, and has an interest in developing more, in partnership with First Nations.

For obvious reasons, we are focusing our efforts on opportunities in the jurisdictions that are ‘clean energy friendly’. As far as opportunities in my home province of BC…I think its time for real change, and the development of new approaches and structures that will enable economic opportunities for First Nations. Stay tuned…

www.visionsfinancial.ca

First Nation Projects: Lack of equity? Not a Problem

How First Nations can REALLY participate and benefit from projects in their territory

 

It has been 20 years since the Supreme Court Delgamuukw decision, which provided First Nations clarity on the existence of the economic component to Aboriginal Title. Meaning First Nations own the land within their territory, and this ownership has value. It is time that, we as First Nations, used all the financial tools and strategies at our disposal to realize our full economic potential.

 

The issue of lack of First Nation equity has been discussed for many years now, and is well documented. First Nations look at their financial statements and in most cases see limited financial possibility for investment into projects in their territory, or their own projects.

 

What if I was to tell you that many, if not most, large projects undertaken in Canada are being done by proponents without any effect on their own balance sheet?

 

In commercial investment sectors this is known as Project Financing.

 

Project financing is the development of a project where the bulk of the financing, both equity and debt or is repaid primarily out of the assets being financed and their revenues. Its paid solely out of the project.

 

According to Denton’s 2016’s ‘A guide to Project Finance’, in Canada in 2015 Project Financing was the vehicle for 72 deals worth nearly $20 Billion. Many of these projects were in the renewable energy sector, however this is a typical structure and approach for projects in other sectors such as infrastructure, resource development and large commercial and residential development.

 

Proponents and investors have moved towards the Project Financing model for a number of business and economic reasons. Some of the key reasons include;

 

  • Ability to manage/share risk with other key partners
  • Ability to develop a project outside of its own balance sheet, enhancing its financial capability
  • Being able to invest and develop a project with limited or no recourse back to the company

 

For these same reasons, as well as the fact that First Nations may have limited capital to leverage, there is nothing stopping First Nations from utilizing this same approach to developing projects in their territory.

 

The key to a Project Financing approach is the strength of the project. The ability of the project to repay its debt, and provide a reasonable return to its investors.

 

For First Nations in Canada, these projects are happening throughout their territory. In some cases, First Nations are leading these projects, and in most cases (hopefully) First Nations have an opportunity to participate in them through negotiated IBA’s.

 

Whether it’s a mining, road, or renewable energy project; as long as it is has sound economics, First Nations can take a lead role in its development.

 

Ki’mola Indigenous Capital was created to enable First Nations to participate in these projects. We are creating and providing equity investment opportunities into excellent Projects  that provide very attractive returns (18%-22%). Our group has successfully created over 700 projects, many utilizing the Project Financing model.

 

As well, we can help First Nations to take a lead, or substantial role in projects that are being developed in their territory. The first step to this opportunity is the First Nation negotiating an opportunity to participate in the project, through an Impact Benefit, or Mutual Benefit Agreement.

 

We are interested in working and partnering with First Nations on projects in their territory, creating an economic opportunity for them to meaningfully participate in their project.

 

This is the time, in this new era of reconciliation with First Nations, for the Indigenous and investment community to come together and create new solutions. Solutions that can create economic benefits for all sides.

 

Gila’kasla

 

 

Michael Bonshor

Ki’mola Indigenous Capital

Reconciliation Walk

Reconciliation Walk

 

It was a tremendous honour, and a fantastic personal experience to participate in the Walk for Reconciliation here in Vancouver yesterday (September 24, 2017). I thought that Robert Joseph Sr and the Reconciliation Canada team, along with the City of Vancouver did the City very proud.

Uncle Bobby, as he’s known to our family, set a fantastic tone for the tens of thousands of participants; as a survivor, and leader of the Reconciliation movement; just as in the first Walk for Reconciliation in 2013, he wasn’t looking to lay blame or guilt, but to spread a message of love and understanding; in coming together as one…’Namawayut’ in our language.

I was personally taken aback by the shear number of participants, so many people took it upon themselves to join the walk, join a movement that continues to gain momentum. There were organized efforts by groups from all corners; union shops, universities, faith groups, ethnic groups; and most importantly, just people who felt compelled to participate and make a difference.

Of course, there was representation by different levels of government; who were gracious and sincere in their comments, comments that were well received. Its now up to all of us to hold their words to account, to move from words to action. But the day was really about the Reconciliation movement, and those who chose to walk, walk with their families, co-workers, their neighbor; Indigenous and non-indigenous.

Congratulations to the organizers, thanks to all the volunteers who made it happen. Most of all thanks to all the participants, all of the people that can see a different and better future, in our territories.

This is how change happens.

Visions Financial Services 2017