The announcement of Cedar Leaf Capital, the first Indigenous-led, Indigenous-owned investment dealer in Canada, marked a historic milestone.
It came after more than two years of planning involving its three Indigenous majority shareholders —Nch'ḵay̓ Development Limited Partnership in British Columbia, Des Nedhe Financial LP in Saskatchewan and Chippewas of Rama First Nation in Ontario — and Scotiabank.
For Sean Willy, President & CEO, Des Nedhe Group, it represents decades of hard work by his elders in English River First Nation and the progress achieved by the broader Indigenous community.
“Now, we’re at the table,” he said.
It also demonstrates a shift in the dynamic between corporations and the Indigenous community. In his experience, these relationships can often be centred around land rights and title, rather than viewing Indigenous people as an asset or a partner, Willy said.
“What Scotiabank has done here is it said, ‘We value Indigenous participation. We think it adds a bottom-line value to our entity’.”
In late February, Scotiabank announced an agreement, subject to regulatory approval, to create and operate a new investment dealer in Canada called Cedar Leaf Capital Inc., named for the cedar leaf found in many Indigenous communities in North America and the significant role it plays in Indigenous culture.
Source: Cedar Leaf Capital
The proposed company will be 70% owned by its three Indigenous shareholders (each with a 23.3% stake) and 30% owned and initially operated by Scotiabank. The Bank will provide infrastructure and support to develop Cedar Leaf’s operations with the goal that in the future, the investment dealer will be wholly Indigenous owned and operated. Once the entity is self-sustaining, Scotiabank will gradually reduce its stake. Cedar Leaf expects to launch its operations sometime between fall 2024 and February 2025, subject to the required regulatory approvals.
“While the economic participation of Indigenous communities has seen significant advancement, much more must be done,” said Scott Thomson, President and CEO, Scotiabank. “Cedar Leaf Capital will provide an important step to expanding access and opportunities within capital markets to Indigenous communities."
Economic reconciliation
As an investment dealer, once regulatory approval is received, Cedar Leaf will start out providing advisory services acting as part of a syndicate or group of investment dealers working with institutional clients such as companies and governments across Canada to raise capital through fixed-income securities offerings, such as bonds.
But Cedar Leaf will also provide a way for investors and companies to support the advancement of Indigenous peoples and economic reconciliation — a term that refers to the inclusion of Indigenous people, communities and businesses in all aspects of economic activity. Indigenous communities have long faced multiple barriers impeding their ability to fully participate in the economy, and one of the Truth and Reconciliation Commission’s calls to action focuses on business and reconciliation in particular.
In May 2023, Scotiabank formalized its commitment by initiating the development of a Truth & Reconciliation Action Plan and establishing a dedicated team. Once completed, this plan will lay out the Bank’s formal Reconciliation steps including supporting pre-existing programs and new meaningful and progressive actions to foster trust with Indigenous employees, customers and communities.
More than half of Canada’s biggest companies have public commitments to reconciliation, and working with Cedar Leaf can help support those efforts, said its Chief Executive Officer, Clint Davis. In turn, Cedar Leaf provides value through its perspective beyond a traditional investment dealer, added Davis, who has more than two decades of experience working with Indigenous organizations and financial institutions.
“Economic reconciliation isn't about a handout,” he said. “It isn't about giving us something for nothing. It's about the opportunity to participate, which enables us to find the right partners and grow out our capacity so we're just as competitive.”
Davis, an Inuk from Labrador, says Cedar Leaf will also help facilitate long-lasting change by hiring and developing Indigenous talent in the financial sphere and helping to foster greater Indigenous participation in capital markets, which has been traditionally exclusive.
“You’re seeing more and more communities getting involved and utilizing capital markets as a way to provide financing and access to capital to participate, generally, in large scale projects including oil and gas, renewable energy, and major infrastructure,” he said. “Having Indigenous ownership to help facilitate the raising of this capital is valuable and meaningful.”
Longstanding relationships with founding partners
The idea for Cedar Leaf stemmed from a request Scotiabank received from a Global Banking and Markets client that used minority-owned broker dealers in the U.S. and was looking to use an Indigenous-owned investment dealer or broker in Canada.
That kicked off a conversation within Scotiabank about how it could help fill this unmet need by establishing an investment dealer with Indigenous ownership and strong business acumen.
The Bank found ideal partners among its longstanding Indigenous clients. (Scotiabank was the first non-Indigenous Canadian financial institution to open a branch in a First Nations community more than five decades ago.)
Nch'ḵay̓ Development Limited Partnership was established as the economic development arm of the Squamish Nation and has developed a diverse portfolio of business ventures, including the Sen̓áḵw mixed-use development project on a 10.5-acre swath of waterfront land in Vancouver.
“Becoming a founding partner of Cedar Leaf will enable Nch’ḵay̓ to not only diversify its investment holdings, but also participate in the creation of exciting new career pathways for Indigenous people who are exploring opportunities in finance,” said Mindy Wight, CEO, Nch’ḵay̓ Development Corporation.
“There is a high level of recognition and readiness across multiple industries and communities to include Indigenous participation, engage in shared learnings and teachings, and Cedar Leaf is leading the way in the financial sector,” Wight added. “Through Cedar Leaf, we are creating a new standard of partnering with Indigenous groups in a way that drives profitability and attracts further investment.”
The Chippewas of Rama First Nation’s most well-known business venture is the gaming facility Casino Rama, established in 1996. Rama First Nation operates a number of businesses — all incorporated and owned by the community — including the Biidigen Gift Shop, Tim Hortons, Rama Country Market and Gas Bar, Ojibway Bay Marina, Rama Cannabis and Rama Maawnjiydiwag Gtigaan. Ramcor Developments is a community development corporation and Rama Gaming operates two Bingo sites in the Greater Toronto area.
Rama Chief Ted Williams was intrigued by a partnership of this magnitude that is “breaking new ground.”
Through Cedar Leaf, we are creating a new standard of partnering with Indigenous groups in a way that drives profitability and attracts further investment.”
“We have, as First Nations, been invested in the development of this country,” said Williams. “This is an opportunity for us to be a player in the financial circle.”
As well, he sees it as a way to set an example of what’s possible for other Indigenous communities.
“If you run good government, good organizations, there is a whole world of opportunity out there. That’s what this demonstrates to me.”
He is optimistic that this landmark venture will open the door wider for the Indigenous community.
“People may not see it right now, but when you're able to look back five, 10 years from now, I see a world of difference in First Nations participating in the financial markets.”
Des Nedhe, established in 1991 as the economic development corporation for the Dene people of English River First Nation, has cultivated a wide array of business entities including in communications, construction, mining, retail and real estate. Cedar Leaf fit perfectly with its strategy.
“We need to add more revenue streams and we wanted to become an asset management entity and so, of course, getting into the financial markets was one of our goals,” said Willy.
Developing Indigenous talent
He is also optimistic about Cedar Leaf’s potential to act as a training ground for Indigenous talent, noting that First Nations and Métis young women comprise the fastest growing segment of students heading to post-secondary schools.
“I want to see it do well by hiring as many Indigenous and diverse people as possible.”
Davis hopes Cedar Leaf can demonstrate Indigenous representation and expand the realm of what youth are exposed to.
He cites his own experience pursuing business and law. He became the first person from his extended family to complete a business degree and never met a lawyer until his professor in business law told him he should pursue a career in the field.
“It came to fruition but, without that, it never would have happened,” he recalled. “That profoundly changed my life… all they need is that little nudge.”
Long-term, he hopes to see more Indigenous people in senior executive roles in large Canadian institutional companies.
“I’d love to see the first Indigenous IPO. It’ll be an Indigenous tech company,” Davis said.
In Willy’s view, the Cedar Leaf partnership goes beyond economic reconciliation.
“It's economic empowerment and it's the way business needs to be done for the future of the country to reach its maximum potential.”