Indian and Northern Affairs Canada Renovating Programs in Support of Lands & Economic Development MEETING REPORT June 15 & 16, 2010 Wendake, Quebec
TABLE OF CONTENTS PURPOSE OF MEETING .................................................................................................................................. 1 CONTEXT FOR PROGRAM RENOVATION AND ENGAGEMENT ...................................................................... 1 Discussion.............................................................................................................................................. 2 REFLECTIONS ON CURRENT PROGRAMMING ............................................................................................... 2 AREAS OF SUPPORT AND CONCERN ..................................................................................................... 5 SUMMARY OF BREAKOUT DISCUSSIONS ...................................................................................................... 6 Desired Outcomes: What do we Hope to Achieve?.................................................................................. 6 Innovative Program Options ..................................................................................................................... 9 OPENING REMARKS DAY 2 .......................................................................................................................... 12 Making Programs Work .......................................................................................................................... 14 Measuring Success .................................................................................................................................. 20 EXPLORING OPTIONS FOR FINANCING COMMUNITY INFRASTRUCTURE ................................................... 24 Discussion............................................................................................................................................ 25 CLOSING REMARKS ..................................................................................................................................... 26 CLOSING PRAYER ......................................................................................................................................... 27
Indian and Northern Affairs Canada Renovating Programs in Support of Lands & Economic Development
PURPOSE OF MEETING The purpose of the meeting was to seek feedback from First Nations in Quebec on how programs may be changed to better meet their needs, in line with the strategic objectives of the new Federal Framework for Aboriginal Economic Development. Over two days, participants were asked to identify what is working and is not with respect to existing programming, and develop ideas for improving or renewing programs to better support Aboriginal Economic Development overall.
CONTEXT FOR PROGRAM RENOVATION AND ENGAGEMENT Speaker Nicole Ladouceur Director General Aboriginal Entrepreneurship Indian and Northern Affairs Canada Headquarters (INAC HQ), Ottawa
Nicole Ladouceur opened the Quebec region engagement session by thanking the hotel for the tremendous hospitality. She said Wendake’s Hôtel‐Musée Premières Nations, situated on the banks of the St. Charles River, illustrates the importance of economic development and nature, and their interdependence. Ladouceur indicated that Indian and Northern Affairs Canada (INAC) is renovating its economic development programs. The situations of First Nations and the economy have changed substantially over the past 20 years; labour market needs are changing, and new opportunities exist for First Nations partnerships with other federal programs, as well as with provinces, territories, and the private sector. Last year, INAC adopted a new Federal Framework for Aboriginal Economic Development to respond to these changes and is now preparing to adjust its programs to be more open to these needs, partnerships, and opportunities, and to place more focus on results. From May to November 2010, INAC will be meeting with a broad cross‐section of stakeholders to obtain input on how the existing suite of Aboriginal economic development programs may be renovated to better meet the needs of Aboriginal Canadians. The new framework aims to build capacity in the Aboriginal workforce, ensure the sustainability of economic development projects, support effective management of lands and other assets, and foster a business‐friendly environment for potential investors in First Nations communities.
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Indian and Northern Affairs Canada Renovating Programs in Support of Lands & Economic Development
Renovated programs will need to be consistent with the strategic objectives of the Framework, with transfer payment policies, and will need to harmonize with the mandate of the Canadian Northern Economic Development Agency (CanNor) and with recommendations for program improvements from past audits and evaluations. They must also take into account the differing economic situations and needs of First Nations communities. Ms. Ladouceur indicated that the main issues that emerged from previous engagements were the Indian Act’s effect on economic development, access to land and resources, the lack of skilled labour in First Nations communities, the shortage of infrastructure, and limited financing opportunities. Ms. Ladouceur asked participants to keep program requirements in mind, including performance measurement and service standards for all communities, improving or creating linkages among federal programs, challenges of current programs, and maximizing resources so that programs can be used to generate wealth rather than relying on government funding. Discussion Participants said a single‐window access point for all economic development programs might be more efficient. It was noted that programs stretching across jurisdictional borders create complex problems. Such borders might exist between different federal departments, such as INAC, the Department of Canadian Heritage, and the Canadian Tourism Commission; between federal and provincial government programs, such as Quebec’s new Plan Nord, or between provincial programs that cross INAC’s regional borders—for example, a First Nation community working on an economic development project with a First Nation in another province. A participant raised the question of how to ensure that Community Economic Development Program (CEDP) funds are used for economic development and not for other projects at the discretion of Chief and Council. Participants discussed the unique situations of remote communities and communities without reserve lands.
REFLECTIONS ON CURRENT PROGRAMMING Speakers Pierre Nepton Regional Director General Indian and Northern Affairs Canada (INAC), Quebec Region
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Pierre Bastien Director General First Nations Quebec and Labrador Economic Development Commission (FNQLEDC)
Pierre Nepton said Canada spends about $200 million on economic development among Aboriginal Canadians, and a billion dollars on welfare, but these figures should be reversed. He advised participants not to recommend cutting all INAC programs, as some of them seem to function well; in particular, he noted that CEDP helps First Nations develop business networks. Mr. Nepton identified several barriers to economic development, the first being the complex legal and regulatory environment in which First Nations must operate. He called the Indian Act a “double‐edged sword”—while it does establish a tax advantage, it also creates problems, especially in Quebec where it interacts differently with the civil code than with the legal tradition of common law. He noted that both the hotel project at Wendake and the sawmill project at Obedjiwan have encountered problems of this kind. Access to resources is essential for economic development. Provincial government involvement is critical in remote areas such as Obedjiwan where natural resources are the only source of economic development opportunities, and this means facing an added set of regulatory hurdles. Nepton identified the lack of skilled workers as another hurdle. The challenge for First Nations is to involve youth in training so they are ready to be partners in business when they reach adulthood. One challenge for communities embarking on large‐scale energy projects, such as the Essipit Innu First Nation’s wind farm project, is finding financing totaling hundreds of millions of dollars, said Nepton. A successful community development project requires at least one dynamic person who is prepared to persevere and push the project through, whether this is the chief, an economic development officer, or another entrepreneur. Mr. Nepton said studies have shown that sustainable community development is not feasible without good governance. Pierre Bastien noted the current CEDP funding formula has been in place since 1989, the year after program funds were reduced from $72 million to $45 million. He recounted the history of the First Nations of Quebec and Labrador Economic Development Commission (FNQLEDC) as advisors to INAC on its new framework for economic development and outlined the report FNQLEDC submitted to INAC, subtitled “Our Courses of Action!” Mr. Bastien summarized the 13 courses of action recommended by FNQLEDC:
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CEDP funding should be increased to strengthen community economic development opportunities
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The 2007 Standing Senate Committee report recommendations on Aboriginal Peoples should be implemented
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Access to programs should be through a single wicket, with a possible pilot project in Quebec
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INAC should produce an economic development program guide for First Nations entrepreneurs so that timing can be opportune and trust can be maintained
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Programs should be de‐compartmentalized (for example, the four Aboriginal Business Canada (ABC) programs)
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Processing delays should be minimized, including fast‐track funding for projects with a value of less than $25,000
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Local INAC officers should be more available to communities
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Programs should cover every stage of a project so that several applications are not necessary to complete a project
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Once the programs have been renewed, a follow‐up committee should be maintained to evaluate and adjust programs according to need
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Community Economic Development Officers (CEDOs) should receive training on new programs
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There should be equal opportunity for all communities whether on‐ or off‐reserve, so that they are in a position to seize economic opportunities that present themselves
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A First Nations community should be able to participate in a CEDP project as a minority partner
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First Nations communities should have increased access to local assets
Mr. Bastien said First Nations communities must prepare themselves for the provincial Plan Nord project, because the competition is waiting in the sidelines—when the building of a new road is announced, companies will already be standing by with 20 trucks ready to jump on the opportunity.
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He said INAC should be ready to inject funds into equity partnership projects as soon as Quebec is ready to do the same. INAC’s equity funding—in which INAC supplied 40% of funds for projects, with First Nations supplying 10% and Quebec supplying 50%–ended in 2005, bringing its partners down with it. Mr. Bastien said this funding should be reinstated within the next two years while Quebec’s share is still available. He called for a reduction in funding for programs that are less used and an increase for those in greater demand. The FNQLEDC is holding two business fairs this year. Mr. Bastien reminded First Nations entrepreneurs of the importance of meeting with other entrepreneurs, finding out what they are doing, networking, exchanging contact information, and building partnerships with neighbouring First Nations. He said developing strategic plans for communities is an effective initiator of economic development, as are economics clubs in high schools, which help build business knowledge and experience among First Nations youth. Quebec is currently planning a pilot project to this effect. AREAS OF SUPPORT AND CONCERN “Business networks are the tool for tomorrow—we have no choice,” said one participant. He added that First Nations must build good relationships with local economic players. “We must also have mutual respect for each other as First Nations—we are eating from the same plate.” The participant called for a federal roundtable on Aboriginal economic development programming at which all the relevant departments could examine programs together to ensure they are both flexible and coordinated. He asked where precisely in Canada the $200 million of INAC funds are spent. Some participants expressed concern about a single‐window access point, saying it could impede First Nations from shopping around amongst the various available programs. Mr. Bastien said a single access point would not reduce programs but would allow “one‐stop shopping” with the goal of improving business timing. A participant said where no reserve land exists on which to build infrastructure, such as business parks, First Nations need funding that is flexible enough to allow project development outside their traditional lands, or with other First Nations. Some are already doing this using self‐financing or partnerships with non‐Aboriginal parties.
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Indian and Northern Affairs Canada Renovating Programs in Support of Lands & Economic Development
Another participant asked whether the department verifies the legal Aboriginal status of those applying for economic development funding. Ms. Ladouceur said several program applications have been turned down because of a failure to prove Aboriginal status. Participants expressed concern that INAC’s economic development programming currently lacks vision and efficiency. Only eight cents out of every dollar invested in First Nations communities stay in that community. Participants noted that this phenomenon is not the fault of the program alone, saying First Nations could help to increase this amount to at least 20 cents by using more local manpower and fewer external consultants. A participant asked whether INAC’s budget would double to keep up with the doubling of the Aboriginal population every 15–20 years. Ladouceur said the budget would not keep pace with the demographics, and current funds should be used to leverage other financing opportunities with the ultimate goal of economic autonomy. Some participants said western Canada is getting the lion’s share of INAC funding. Mr. Bastien said First Nations in those areas have different treaties, more partnerships, and a number of First Nations investment groups such as Manitoba’s Tribal Councils Investment Group. They also make more applications. He added that First Nations should be developing initiatives together, in such industries as the forestry sector, rather than involving external entrepreneurs. Mr. Bastien said access to natural resources is a major issue—better access would allow communities to be more proactive rather than waiting for offers. One participant spoke of his community’s involvement in building a highway. Despite the community’s lack of economic leverage, negotiations led to the signing of a $26 million contract. “It starts with an open attitude on both sides,” he said. Another participant mentioned his community’s difficulty in bidding for contracts in the energy sector because the federal programs have not evolved to fit this kind of project. He noted the need for program flexibility and said he hoped the new Framework would not end up being just as inflexible as the old one. Some participants noted a lack of adequate INAC staffing on site when big development projects come along. Ms. Ladouceur said that as a result of a reorganization within the Business Development Branch at Head Quarters, additional staff would be assigned to regional offices beginning September 2010.
SUMMARY OF BREAKOUT DISCUSSIONS Desired Outcomes: What do we Hope to Achieve?
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Ms. Ladouceur invited participants to begin their breakout discussions, focused on three major questions: •
What are the key factors that enable a successful business climate?
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What are the key factors that enable viable Aboriginal businesses?
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How would you define an opportunity‐ready community?
Elements of a successful business climate
Participants identified the following factors as elements of a good business climate: •
A stable First Nation community that attracts investors
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INAC offices nearby
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A developed entrepreneurial culture among youth
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Good governance in the community
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A clear separation between politics and administration
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Consensus among adjacent First Nations
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Existing partnerships with “quality partners”
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A climate of confidence among community members, the Band Council, and developers
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Links between economic and social development that are clear to community members
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An available community profile and the ability of project officers to rely on community leaders to provide data
Factors that enable viable Aboriginal businesses
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A trained Aboriginal workforce
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Training located in the community, so that people can learn and work at the same time
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Mentorship for project developers
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Timely access to funding
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Community access to territory and natural resources
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Community access to transportation and markets
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Readily available information about INAC programs
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Availability of good mentors for business development
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The ability of the project officer to analyze the business environment
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A business plan and the ability to communicate it
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A strategic plan that the community can revise and update
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CEDOs as good managers, book‐keepers, and communicators
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INAC ability to react quickly to proposals and involvement in the project from the outset
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Networks that provide access to capital
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The possibility of leveraging financing, such as risk capital, credit, loan guarantees
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Economic activities that remain viable in a seasonal market
Defining an opportunity-ready community
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The ability of the First Nation to have some control over its environment
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Accessible natural, economic, and human resources
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A project group with a common vision and the will to implement it
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Leadership with the political will to get involved in the project
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Community involvement in projects, supportive of entrepreneurs and ready to be part of a business environment
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A community that is ready to leap on opportunities when they present themselves
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A community that can demonstrate the value of its product or service over other offers (for example, showing why clients should not go to Quebec or Montreal instead)
Key factors that enable the development and sustainability of opportunity-ready communities
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Entrepreneurs willing to reinvest in the community
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A will to move forward with land claims
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A business that does not involve denying Aboriginal culture
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Integrated and holistic resource management
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Training for partnership development, consultation, and entrepreneurship
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Entrepreneurs willing to invest their own money
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Follow‐up plans as well as business plans
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Adequate infrastructure in the community (commercial buildings in addition to municipal‐type buildings)
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Accountability
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A departure from western Canadian models and the exportation of some eastern approaches
Innovative Program Options The groups were asked to discuss and report back on a number of questions relating to program options. What aspects of the current programs are working well?
Participants identified the following programs as currently working well:
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CEDP: a core program that is a reliable source of funding at the beginning of each fiscal year and provides good follow‐up
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Community Support Services Program (CSSP): this program launched the FNQLEDC
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Procurement Strategy for Aboriginal Business (PSAB)
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Community Economic Opportunities Program (CEOP)
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Community Economic Development Organizations: “a valuable resource”
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Access to Capital program (ATC)
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Aboriginal Skills and Employment Partnership (ASEP): a Department of Human Resources and Skills Development with which INAC should partner
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Indian and Northern Affairs Canada Renovating Programs in Support of Lands & Economic Development
The Quebec region’s Réseau Express concept was identified as especially beneficial. This system brings all potential partners to the same table to make access to programs easier and speed up project analysis. Communities praised the quality of support they receive from the Quebec regional INAC office, saying the staff listen well and are welcoming. The regional office also makes useful technical expertise available to communities. What new programs or changes to programs are needed?
Participants said there is a need for:
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Programs designed with the situation of eastern Canada in mind
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Projects with access to risk capital, microcredit loans, guarantee mechanisms, and patient capital programs (loans with a multi‐year capital repayment moratorium)
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Programs that enable entrepreneurs to capture market incentives more quickly
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Programs that are more flexible in terms of mentoring, especially in remote communities—for example, one area’s CEDO said he has to travel for five hours to help someone make a business plan: “You can’t communicate what I learned in my MBA in a three‐hour conversation over the phone”
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Single‐wicket “one‐stop shopping”
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Training in methods for measuring results
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Better communication as to what programs are available and what changes have been made to them
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An expanded role for INAC beyond the funder of last resort—First Nations projects sometimes depend on funding from many agencies, each of which is waiting for a funder of first resort
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Adequate CEDO funding
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INAC funding for the CDEM’s (Corporation de développement économique montagnaise) ”entrepreneurial simulator,” which will tour the province and educate communities to identify possibilities for entrepreneurship
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A standardized community isolation factor across all departments—currently, a community might be evaluated by one department as having an isolation factor of 2, while INAC rates it at 1.35, for example
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INAC support for the implementation of strategic plans in addition to development
Participants made the following comments regarding needed changes to programs: •
The 15% equity requirement in the Aboriginal Business Development Program (ABDP) is an impediment.
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Funding criteria should be relaxed.
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It is hard to tap into the Procurement Strategy for Aboriginal Business (PSAB)—some communities seem to get all, and others get none.
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INAC should acknowledge or reward First Nations whose investments roll over many times and generate secondary funds.
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Accelerate land claim settlements and territorial negotiations linked to economic development.
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Infrastructure funding should cover commercial centres and not just municipal‐type buildings.
How should these programs reflect the different needs of communities?
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Increased regional staff would result in responses tailored to different needs and improve responses to timing requirements
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There should be one envelope per region rather than one for five regions, to allow funding to respond to regional trends.
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Flexible funding is needed that responds to varying distances from markets and qualified professionals, varying travel costs, differences in training levels, and different community contexts; exception clauses should be built into programs criteria.
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Funds should be able to shift from one envelope to another.
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Programs should differentiate between small and big communities.
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ABDPs should be compatible with larger projects; special programs should be set up to fund large projects ($10 million and over) and major projects ($100 million and over).
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Economic development should match training to programs, such as the CEDP.
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Programs should take account of Quebec’s new Plan Nord in terms of opportunities and timing.
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Flexibility in land regimes is needed and ministerial discretionary decisions should be forthcoming.
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Communities need support in building strategic planning capacity.
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Quebec should have better representation on the National Aboriginal Capital Corporation Association (NACCA).
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A single program should provide support for each development stage of a project.
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Technical support should be efficient and competent.
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Response time should be faster.
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First Nations should be admissible for funding as minority partners in a project.
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INAC staff should go to the communities and see the situation for themselves.
OPENING REMARKS DAY 2 SPEAKER Allan Clarke Strategic Policy Branch Indian and Northern Affairs Canada Headquarters (INAC HQ), Ottawa
Luc Lainé opened the day’s discussions, noting that most of the day would be spent in group discussions followed by report backs. Allan Clarke said INAC is looking at programming across the whole federal spectrum of First Nations economic development funding, not just within INAC but throughout the federal government. He said no new money is forthcoming, but he believes that these engagement sessions will help INAC be more effective with the resources it does have. Clarke said the newly designed programs must align with both the new Federal Framework for Aboriginal Economic Development and recommendations made following recent federal audits and evaluations. A new policy on transfer payments provides more flexibility and defines
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accountability as mutual—communities are accountable to the government but the government is also accountable to the client.
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SUMMARY OF BREAKOUT DISCUSSIONS (continued from Day 1) Making Programs Work The groups were asked to discuss and report back on several questions relating to programs and their effectiveness. What are the priorities for funding allocation within the current budget?
Although groups had been asked to pick and choose between various elements, some were unwilling to do so, contending that all programming is underfunded. Noting that the FNQLEDC report, “Our Courses of Action!” is a mine of information and provides a good basis for setting funding priorities, participants suggested the organization could be mandated to develop a set of indicators for program funding. Quebec’s Secrétariat aux affaires autochtones has a successful program called the Aboriginal Initiatives Fund (AIF), which according to one participant, “satisfies most First Nations.” It was suggested that INAC adopt an adapted model of the same program. After studying the Quebec region’s proportion of funding for all 14 programs and budgets for the year 2010/2011, one group said community economic development, currently $89.5 million, should continue to be the top funding priority. They said First Nations enterprises, currently at $45.7 million should come second instead of land and environmental management programs, which are currently at $50.5 million, noting the latter are currently much less critical. Many participants said CEDO funding “keeps us going.” Participants discussed whether economic development funds should be “rolled up and handed over” to the communities to allow them to make their own decisions. One participant worried that allocating rolled‐up funds on a five‐year plan might cause them to disappear until the next chief and council are elected. A participant said while economic development programs are supportive of small communities in the early stages of economic development, the same cannot be said of Aboriginal business development programs, which nevertheless need the same kind of start‐up support. Participants also offered the following suggestions and comments: •
There should be more emphasis on equity funds and loan guarantee programs.
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Massive investment in infrastructure is needed.
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Mentoring is essential, and must include supervision and follow‐up.
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Sufficient funding is required for those communities that need economic development officers with better skills, who demand higher salaries.
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Timing issues need more flexibility—if there is “something happening” or an economic development potential in one region, INAC should be prepared to quickly channel program funds into that region.
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Access to capital for human resources is needed, including paying professional experts such as architects, environmental engineers and planners, and strategic economic planners.
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Use funds to leverage opportunities for training, partnerships, networks, globalization of communities, and economic alliances amongst First Nations.
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INAC could offer incentives for seeking private financing.
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Territorial negotiations are particularly important for First Nations that have no reserve lands.
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INAC should tap into the foreign investor programs that bring immigrants to Canada; this capital could be channeled towards First Nations businesses.
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Some entrepreneurs need direct access to equity funding rather than CEDO.
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INAC should provide guarantees to banks for financing large‐scale energy projects—for example, the capital cost of a 25 megawatt wind farm is $65 million.
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INAC should match Quebec’s funding offers when opportunities arise.
What alternatives are there to the current formulae for the Community Economic Development Program (CEDP), the Reserve Land and Environment Management Program (RLEMP), and the First Nations Land Management Regime (FNLM) (programs based on multi-year, formula-driven contributions)?
It was suggested that population‐based formulas be topped up by considerations of isolation and cost of living. A project that takes two years to implement in one community might take only three months in an adjacent community, due to the latter’s bigger population base. Two other factors raised for consideration were the community’s land base and whether the CEDO already encourages effective economic development.
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A participant said the “everlasting issue” is that formulae are based on a “winners and losers” principle—when one First Nation gets more of the pie, another gets less. This imbalance is destructive of relationships among First Nations and should be replaced with a “there will be no losers” principle. The government does not like this principle because it means dishing out more money, the participant said. Participants made the following additional comments: •
Cuts to the CEDP are not a solution—the formula should be both fair and precisely targeted to needs.
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The funding formula for Tribal Councils should be different from that for individual First Nations communities.
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Money should be able to move from one funding envelope to another—currently, an unemptied envelope goes back to Treasury Board.
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There should be better coordination amongst all federal government departments involved in Aboriginal economic development.
What does it mean to operate “at the speed of business”?
One group noted it takes longer to be ready to start a project in their community than in other communities. For a project to be successful, the workforce must be trained, social/cultural aspects must be considered, the different partners must be brought together, and the community must feel a sense of ownership of the project for it. Other groups said INAC takes too long to approve a business plan. Project funding should kick in immediately when the time is right, such as when a community has developed a commercial centre and tenants are finally ready to rent, or a quota for crab fishing comes up for sale and any delay means losing the opportunity. One group suggested a pre‐authorization system, whereby authorization for a potential opportunity is obtained in advance. INAC regional office noted this has caused problems with unmet expectations in the past, in which the developer is counting on the funds but the project turns out to be unprofitable. It was noted that something like a fish quota, however, would be profitable by definition, and a pre‐authorized business plan in such cases should be problematic.
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Other participant comments included: •
Regional offices are limited to authorizing projects of $100 million, but should be able to approve projects up to $250 or $300 million.
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INAC should establish a separate stream for large‐scale projects.
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INAC staff should be free to devote more time to decision making and less to administration.
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INAC should harmonize internal program deadlines for such programs as CEDP and CEPO, and study all applications pertaining to a single project at the same time.
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INAC should collaborate more closely with other Aboriginal Capital Corporations (ACCs) such as SOCCA (Société de Crédit Commercial Autochtone) and CDEM.
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First Nations should create collaborative alliances to create more purchasing power, share transportation, or purchase each others’ products and services, “as we did long ago.”
One participant questioned INAC on its vision of its future, asking whether it would be as partner, banker, advisor, inspector, or continue as a trustee. She indicated that First Nations need a facilitator to help them find necessary financing and coordinate the various programs offered through the federal and provincial governments. “We want to come out of our ‘Grande Noirceur,’” she said. Another participant said understanding the administrative process that causes delays would allow First Nations to be more constructive in developing solutions. The participant asked whether a community with an economic development plan could jump the initial project proposal phase and go straight to the business plan, for example. Another participant said INAC must communicate deadlines better so that applications can be made at the right time in the funding cycle. It should also maintain ties with economic development officers rather than the band councils, which can become too political. What should the key elements of program service standards be?
One group said other federal departments are more flexible in providing service, citing a fisheries support project in another government agency that sends out technicians and professionals to the communities. These professionals “make every effort to find ways to help us” by setting out the program priorities clearly and helping the community adapt the priorities to their projects. This group’s community managed to obtain a $3 million grant and a 50%
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advance thanks to the technical support staff’s open attitude. The group said this attitude should also be universal for INAC technicians. An INAC regional officer said they are currently facing some massive Aboriginal energy projects including wind power and hydro, which are very expensive. “When you get into this game, the national budget could all be spent on one project,” she said. The magnitude of these projects is new for Quebec, which has always been the kingdom of SMEs. “We have to address this challenge now,” she said. “But we must not forget the small communities that don’t have these opportunities.” She added that the regional offices usually accompany communities through the business plan stage, saying “we’ve never refused a good project for lack of money.” Participants said reporting is key to program service standards. Communities described situations of having submitted reports to be told the standards had changed. INAC should publish service standards and make sure they are communicated to the communities. What factors should be considered in determining eligibility for core funding of services and expertise (i.e. CEDPs)?
In response to requests for clarification, it was explained that this question refers to the fact that every community is currently eligible for CEDP funding on a per capita basis. The funding is used to pay the CEDOs’ salaries with leftover funds going to various other projects. Core funding eligibility presents an issue in that smaller communities need these funds to stay afloat while other communities have gone way beyond this level of economic development. The question becomes whether these more developed communities should give up their core funding and whether small communities with little to show for the funding should be required to show more to continue to qualify. Some participants felt that communities that fail to do their accounts, submit annual reports, and show whether they have met their objectives or how the funds have been managed should not be eligible for core funding. A community’s eligibility could be renewed every few years based on these criteria to avoid perpetuating bad governance. They asked what could be done to correct the situation and put these communities back on track, noting these issues should be dealt with now rather than years later. A participant said the same criteria should apply to accountability within the community; leaders who are not reporting results should be brought to account. It was noted, however, that communities that fail to reach their objectives should not be automatically penalized. It is impossible to predict the future and strategic plans are by definition provisional.
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Some participants said a community could qualify for funds in addition to the basic core funding if: •
The community has to hire outsiders
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The community’s welfare rate is over 60%
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The community has a lower rate of autonomous income
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The CEDO is attempting to create economic development and partnerships, even if the stated objectives are not yet met
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The community is remote and has to undertake more direct selling
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The community has trouble attracting someone qualified to lead the project
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The community is very isolated
Other participants’ suggestions for these criteria differed significantly from those above. They suggested core funding should increase: •
If the community is creating jobs
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If the community is generating autonomous revenue
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If the CEDO is competent and has adequate training
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If the projects contribute to the external economy (for example, 70% of the manpower training at Wendake goes to Quebec)
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According to employee and client satisfaction
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According to community well‐being
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According to the number of businesses created
It was noted that few communities would be willing to cut their core funding. For communities involved in major development projects, core funding is needed to maintain stability in their economic structures. Cuts in core funding could have a drastic impact on successful projects and would unjustly penalize such communities. Participants noted that longer‐term funding agreements would provide stability, continuity, and the ability to leverage other funding.
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It was suggested that core funding could flow to an independent development corporation. Such a corporation would be in a better position to leverage other funding, as a “business running a business.” It would have the advantages of maintaining increased independence from First Nations political interests; building other funding opportunities such as the Aboriginal Skills and Employment Training Strategy (ASETS) into its business plans; and “you wouldn’t have to make 55 different applications to 55 different departments,” said one participant. A participant said INAC should consider studying the system in the Gaspé region, which has developed a set of criteria related to poverty factors. The Côte‐Nord Economic Development Program also has programs especially designed for fishers, and have redesigned the program in light of the recent crab crisis. INAC should have the same flexibility. Another participant said First Nations could be funded to help one another, using the example of supporting CEDOs to travel to other communities to see how they work. INAC could achieve a lot without adding more money to its programs through such measures as keeping track of up‐and‐coming opportunities and helping coordinate community responses, said one participant. For example, Quebec has pledged money for the building of Route 138 on the north shore, and INAC could put pressure on the federal government to participate given the many First Nations jobs at stake. It was noted that private enterprises, such as Alcan, are increasingly showing an interest in doing business with First Nations, and in some cases are willing to invest in First Nations economic development structures.
Measuring Success How does your community measure success in community development? In land management?
Participants said it is difficult to identify a uniform definition of success, as First Nations find themselves in a wide variety of situations. They identified the following indicators:
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Number of jobs created
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Number of businesses created
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Development of expertise in the community
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Creation of own‐source revenue
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Positive feedback from Chamber of Commerce, local developers
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•
Responsiveness to developers’ expectations
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The amount of prestige it brings to the community
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Percentage of regional market in Aboriginal hands (the prestigious shopping centre Galleries Montagnaises in Sept‐Îles handles 70% of retail sales in the area and the profits go to the First Nation)
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Profitability (a community in the Gaspé that started from nothing now has assets of $8 million).
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Return on investment (ROI) and how quickly profits return to the community
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Improvement in standards of living
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Concrete signs of success visible to the community
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How results measure against the vision the community has of its future
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Community ownership of economic development
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How results measure in terms of goals identified in the strategic plan
How do you report on economic development to your community?
Participants again noted the wide variation in community models, ranging from very sophisticated, to very simple, to non‐existent. They listed the following methods: •
A model based on quarterly and annual success‐factor reporting, measured against targets established at the beginning of each planning cycle
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A model based on five‐year socio‐economic surveys
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A model based on a community and individual well‐being index
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Annual reports to the band council that contain a factual, narrative account of ongoing projects
Participants noted that some communities lack the resources or expertise for measuring outcomes and reporting on them, and some do not have much economic activity to report on. Little measuring or reporting back occurs in these communities. Other communities measure activities and outputs rather than outcomes, and rely on a degree of self‐reporting.
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It was noted that a community might report on projects based solely on the profitability of enterprises, and this report might be irrelevant to INAC’s project evaluation. One participant said greater community member involvement in decision‐making on economic development results in greater direction from these members, which provides the CEDO with objectives that can be measured at the end of the year. A facilitator noted that reports can be used to improve both a community’s strategic plan and its own performance and asked whether reports for one year are useful for the next. Reports could be based on a reusable annual template that could be assembled over a 10‐year period to create a strategic plan. There was little discussion about land management. One participant said this is because land management experts are responsible for measuring success in land management. What performance indicators could be used to measure the impact of the new programs?
One group said this question should be studied in more depth than was possible here and suggested mandating the FNQLEDC to draw up performance indicators to be submitted to INAC before November 2010. Participants listed the following performance indicators as important:
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Return on Investments
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Global business environment
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Risk level in terms of resources available
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Geographic situation
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Business growth and data on incomes generated
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Number of businesses started
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Client satisfaction
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Loans and grants awarded
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Community and individual well‐being
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Volumetrics (although less important than outcomes)
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Qualitative data
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How can reporting to INAC be made more useful and “user-friendly” to you?
Participants said reports should be useful to both the communities and INAC. INAC staff explained that INAC compiles these statistics for national reports and mandatory applications to the Treasury Board, which votes on whether to renew the programs for three to five years. INAC must show goals and results and provide explanations when the results do not match the goals. Participants made the following comments on the current reporting system:
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Data for financial statements and economic development purposes are difficult to harmonize.
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The reports for INAC are hard to understand and CEDOs often have to call for clarification. Communities need a model that is easier to understand, and is not too intimidating.
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Annual reporting requires that eight different sections be filled out, when often only two are relevant.
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Reporting should be aligned with business and financial cycles (for example, audited financial reports are not available until the end of June but are required in March).
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As many reports are required for a $10,000 project as for a million‐dollar project. The amount of reporting should be proportional to the amount requested.
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There should be one report that can be distributed to all the partners.
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A central distribution point, perhaps electronic, could be set up to send a report to all the relevant program or partners at the right time.
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Communities need to know what is being measured by INAC (e.g. activities, results, gaps between objectives and results)
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Communities need to know the purpose for which data is being compiled.
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Programs need performance indicators, such as those used by the Secrétariat aux affaires autochtones (SAA), rather than criteria.
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There should be a way to measure non‐tangible results even when a project does not work out, such as experience or acquisition of expertise.
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•
Results‐based annual reporting can penalize smaller communities, which might appreciate a project as a new level of progress within its own history, but might be evaluated negatively by INAC.
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Changes in reporting requirements should only take place when data is needed for program renewal, not simply because a new manager wants to see the data in different form.
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Clients should know when a change is coming and why.
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Reporting systems should be harmonized across the different federal programs involved in Aboriginal economic development.
EXPLORING OPTIONS FOR FINANCING COMMUNITY INFRASTRUCTURE Speaker Gail Mitchell Director General, Community Infrastructure Branch Indian and Northern Affairs Canada Headquarters (INAC HQ), Ottawa
Gail Mitchell summarized the current system for funding infrastructure. The First Nations infrastructure program provides cash funding in the amount of nearly $1.5 billion per year. Given a population growth that is three times that of the non‐Aboriginal population, this amount is unsustainable. Most jurisdictions use debt financing and may rely on government grants for only around 20% of costs. The INAC fund has a current backlog of between $3 million and $5 million, and many First Nations must wait a long time for infrastructure funds given the program’s health and safety priority. Ms. Mitchell said a “one model fits all” approach is inappropriate given that many communities have revenues coming in that could provide additional funding support. The current system is unable to factor in an integrated approach, such as a project that includes both a water facility and a mall. Ms. Mitchell said various alternative options exist. First Nations communities could move to an annual long‐term funding formula that would be more stable and could be set aside as a reserve or used to leverage further financing. INAC could pay down the principal on loans for a set number of years. First Nation communities could seek other avenues such as market‐based financing, partnerships, and user fees. They could make use of alternative funding institutions such as the First Nations Market Housing Fund; the First Nations Housing Authority; and the new P3 Canada Fund, a Department of Finance initiative encouraging private‐public
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partnerships, comprising a crown corporation whose board of directors is drawn entirely from the private sector. Ms. Mitchell asked participants to make suggestions as to alternative financing arrangements and capacity building for accessing such alternative financing. Discussion Several participants asked about eligible infrastructure projects, including a fence, an industrial park, a road to an industrial park, a sports complex, and a public transportation system. Ms. Mitchell directed these participants to Bruce Labrador at the INAC Quebec regional office. One participant expressed concern that First Nations are being asked to pay interest on loans or user fees for essential infrastructure such as water, which are a government fiduciary responsibility. Another asked whether INAC plans to stop paying for infrastructure and whether First Nations are going to be forced to create reserve funds for replacement costs, as they have had to do for housing. Ms. Mitchell acknowledged increasing demands and needs, but said the Department cannot supply sufficient cash every year. Every local government is facing similar difficulties. While a compulsory reserve fund is one option, other options would encourage First Nations communities to plan for replacing their infrastructures, which deteriorate faster than in other jurisdictions. She said communities who wish to explore other options should be able to go ahead and do so. One participant suggested INAC partner with the P3 fund and both local and provincial government on infrastructure projects. He said the Kahnawake community has developed an infrastructure project plan that will attract many businesses and create 400 jobs. “Only about 25% of those jobs will be filled by our community,” he said. “Those are savings on EI, savings to the SA, and contributions to the tax base. Yet there’s no partnership link between the federal government and the Quebec government.” Government should look at the benefits of infrastructure, and not only at how it is going to get repaid. “There are solutions that benefit all parties if you look for them,” the participant said. Other participants said the issue cannot be separated from the rapid settlement of land claims and territorial negotiations. “When communities get their territories back, they will be less dependent,” said one. Another said the solution lies with Parliament; basic needs such as safe drinking water that keep communities alive cannot be vulnerable to the vagaries of private funding.
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The jurisdictional question of ownership arises with private‐public partnerships. A participant asked whether First Nations would end up paying taxes on their infrastructure if two‐thirds of the funds are private. Ms. Mitchell said the company could still be considered as Aboriginal‐ owned, noting that experience with P3s and First Nations is still too limited to provide a categorical answer. Allan Clarke cautioned participants that the current approach to funding infrastructure will not continue. “We must find different, creative ways of doing what we are doing. Your feedback will help us.” Participants can send suggestions to Jennifer MacKinnon at fax 819 953 3321.
CLOSING REMARKS Mr. Clarke said participants’ comments clearly show that more flexible methods of financing are necessary—methods that both facilitate partnerships and provide access to capital. He said the CEDP program, although essential, needs a new formula: the FNQLEDC has “picked up this baton” and any solutions must ensure equity in program delivery. A new formula means a redistribution of funds, which will make some people happier and others less so. Processing funding applications at INAC should be accelerated to match the speed of business, particularly with large projects. Mr. Clarke said multi‐year funding might be helpful and allow economic development to be seen as a process rather than a series of individual initiatives. Mr. Clarke said capacity building is also needed for such measures as improving CEDOs’ qualifications, facilitating access to professional expertise, supporting Aboriginal communities in negotiating Impact and Benefit Agreements (IBAs), and supporting negotiations with the non‐ Aboriginal private sector. Communications between INAC and its clients must be ongoing. Mr. Clarke said programs have not kept pace with the changes in needs and opportunities, and must do so from now on. Reporting on results is important because INAC has a reporting obligation to the Minister. “We know there are all kinds of success stories out there, but we have not found ways of capturing that performance story,” said Mr. Clarke. A five‐page handwritten report may not reflect what is actually going on in the community, “which may in fact be doing much better than we know.” He noted reporting is also important for First Nations in trying to achieve their own economic development outcomes.
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Noting that discussions around land management did not really take off, and the importance of land to developing an economic base, Mr. Clarke asked how this wealth could be activated. The impediments are multiple and include the difficulty of the process and the Indian Act. All these elements work together and should be considered as a whole. Mr. Clarke thanked everyone who participated in the conference and wished them safe travels
CLOSING PRAYER Mr. Lainé introduced Yolande Picard, an Elder from Wendake. She sang an ancestral Huron song that was rediscovered in a collection of songs recorded by Marius Barbeau around 1910. She then invited participants to gather around and, dispensing with the microphone, related a Huron creation story to close the day’s activities.
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