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ABORIGINAL ECONOMIC DEVELOPMENT OVERVIEW Presentation to: Canada-Eurasia Russia Business Association

ABORIGINAL ECONOMIC DEVELOPMENT OVERVIEW Presentation to: Canada-Eurasia Russia Business Association . Brock Dumville Manager, Sectoral Strategies Directorate Lands and Economic Development Sector March 2010. Aboriginal People in Canada. 1,172,790 Aboriginal people in Canada (2006 Census)

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ABORIGINAL ECONOMIC DEVELOPMENT OVERVIEW Presentation to: Canada-Eurasia Russia Business Association

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  1. ABORIGINAL ECONOMIC DEVELOPMENT OVERVIEWPresentation to:Canada-Eurasia Russia Business Association Brock Dumville Manager, Sectoral Strategies Directorate Lands and Economic Development Sector March 2010

  2. Aboriginal People in Canada 1,172,790 Aboriginal people in Canada (2006 Census) 4% of Canada’s total population Overall increase of 45% between 1996-2006 – 6 times faster than the 8% rate increase for Canada’s non-Aboriginal population 54% live in urban areas and 80% live in Ontario and the Western provinces Three Aboriginal heritage groups in Canada First Nations – 698,025 increased by 29% Metis – 389,785 increased by 91% Inuit – 50,548 increased by 26% Population is young and growing Almost half (48%) are under the age 24 compared to 31% of Canada’s non-Aboriginal population 400,000 Aboriginal people will enter Canada’s labour market in the next 10 years

  3. Geography of Aboriginal Population

  4. Rabidly Changing Landscape Rapidly expanding land and asset base Settlement of Comprehensive and Specific land claims • Provide for legal certainty and the basis for negotiation with the private sector and other governments • Since 1975, 22 Comprehensive Claims agreements worth roughly $3.0B have been signed across Canada, involving 90 communities and 70,000 members • Since 1973, 325 Specific Claims agreements worth $2.1B have been settled • First Nations and Inuit People own or control over 60Mhectares of land – Often includes resource rights; e.g. minerals Over $315B in major resource developments have been identified in or near Aboriginal communities • Approximately 1,200 Aboriginal communities are located within 200KM of 220 principal producing mines and 3,000 exploration projects across Canada

  5. Aboriginal Population and Major Development Projects Population 2001 Census Subdivision ( Number of CSDs ) 2000 + ( 62 ) 1000 – 1999 ( 119 ) 500 – 999 ( 252 ) 40 – 499 ( 1688 ) Not Available ( 3499 ) Mackenzie Gas Project $7 B Alaska Pipeline $25.6 B Mining Projects $423 M Whitehorse Oil Sands $102 B Iqaluit Spirit & Gateway Pipelines $6.4 B Yellowknife Mining Projects $1.5 B Hydro/Wind Projects $10 B Hydro Projects $13 B Hydro/Wind Projects $16.5 B St. John Edmonton Hydro Projects $ 2 B Calgary Charlottetown Victoria Vancouver Saskatoon Quebec 2010 Games $2.2 B Regina Halifax Winnipeg Ottawa/Hull Keystone Pipeline $2.1 B Fredericton Transmission Line $2.5 B Montreal Toronto

  6. Rapidly Changing Landscape Legal Duty To Consult • 2005 Supreme Court of Canada ruled that the Crown (federal and provincial) has a legal duty to consult and possibly accommodate First Nation, Metis or Inuit communities when the Crown has “real or constructive knowledge” of an established or potential Aboriginal Right • The duty does not apply to industry and does not confer upon Aboriginal groups a “veto right” • Consultation and accommodation practices may be subject to review which may halt approvals thus creating uncertainty to economic development initiatives in Aboriginal communities Industry has asked for a clear policy/processes that will bring about predictability, certainty and stability • Industry Being Proactive • Recognize Aboriginal engagement/support important licence to conduct business i.e“Social Licence to Operate”

  7. Rapidly Changing Landscape Canada is working with Aboriginal groups, provinces, industry to develop consultation guidelines No longer business as usual Fundamental shift in perspective from short term (eg 10 years) on simple profitability to longer term one of sustainability Merging Aboriginal perspectives on sustainability with business view on sustainability June 2009 Canada announced a new “Federal Framework for Aboriginal Economic Development” Replace the 20 year old Canadian Aboriginal Economic Development Strategy Had not kept up to economic and legal reality

  8. Framework for Aboriginal Economic Development VISION By focusing on opportunities, responding to new and changing conditions, leveraging partnerships and focusing on results, the Government of Canada, Aboriginal Canadians and willing partners will work together to ensure that Aboriginal Canadians enjoy the same opportunities for employment, income and wealth creation as other Canadians

  9. Framework Action PlanImmediate Investments

  10. Early Funding Commitments:$200 Million over 4 Years The Government of Canada will invest in: Access to and Control of Reserve Lands • $63.3M over four years to accelerate the economic use of lands Access to Capital • $53.1M over four years to improve access to commercial capital Aboriginal Procurement • $9.5M over four years to promote Aboriginal procurement Framework Governance • $7.8M over four years to ensure the effective implementation of the Framework Strategic Partnerships • $66.3M over four years to promote federal collaboration and economic development partnerships

  11. Current Programming – Community Economic Development Community Economic Development Programming seeks to increase participation of First Nations and Inuit communities in the economy by increasing community business development and incomes. Programming areas include: • Community Economic Development Program (CEDP) – Provides core (i.e., formula-based) financial support to communities for economic development public services ($54.0M) • Community Economic Opportunities Program (CEOP) – Supplements CEDP funding with project-based support to communities with identified opportunities ($30.0M) • Community Support Services Program (CSSP) – Funding for national- and regional-level economic development organizations to deliver support services to community-based economic development organizations ($8.5M) • Procurement Strategy for Aboriginal Business (PSAB) – Seeks to increase the number of Aboriginal suppliers bidding for and winning federal procurement contracts. Government-wide policy strategy that is managed by INAC, TBS and PWGSC

  12. Current Programming – Business Development Supports the establishment and growth of Aboriginal businesses • serves First Nations on or off-reserve, Métis and Inuit entrepreneurs and in all parts of Canada, urban and rural • provides $50M annually in contributions Five components: • Aboriginal Business Development • Major Resource and Energy Developments • Aboriginal Financial Institutions • Loan Loss Reserves • Major Resource and Energy Investment Funds

  13. Aboriginal Business Developments(ABD) Provides financial contributions for businesses: • planning; support; start-ups and acquisitions; expansion; marketing Individual Aboriginal businesses may receive up to $99,999 and community-owned businesses up to $1M in funding assistance Provides $18M supporting 550 small businesses (equity financing) on average annually 61% of ABD projects are off-reserve and 39% on-reserve

  14. Major Resource and EnergyDevelopments (MRED) Brokers, facilitates and simplifies client access by building business relationships between private sector and Aboriginal businesses and by facilitating federal processing Supports Aboriginal businesses to make early and late stages equity gap investments in major resource and energy projects (e.g., mining, hydro, forestry, oil and gas, biomass): • business advisory services: e.g., pre-feasibility, feasibility, business and financial planning, project design activities – support up to $1M with equity contribution • commercial ventures: e.g., establishment, acquisitions, expansion of a business or joint venture – support up to $10M with equity contribution

  15. Aboriginal Financial Institutions(AFIS) AFIs provide a range of services and supports to Aboriginal businesses: • business loans up to $250,000 – 5% for the first $5K + 2.5% on remainder (average loan size $51,559) • business planning, advisory services and referrals Provides $11.3M enabling more than 50 AFIs to make $88M in business loanssupporting 1,200 businesses on average annually Some AFIs extend delivery of business development programming (non-repayable equity contributions) in remote and rural areas Supports AFIs and National Aboriginal Capital Corporation Association (NACCA) (Métis AFIs: Louis Riel Capital Corp.; Apeetogosan; NWT Metis Denis; All Nations Trust; SaskMetis Economic Development Corporation; Settlement Investment Corporation)

  16. Loan Loss Reserve (LLR) While it is currently accessible on-reserve, it is envisioned that the terms and conditions of the LLR program will be amended to make it accessible to off-reserve businesses in the future Encourage commercial financial institutions to provide debt financing to First Nation individuals and community-owned businesses • cover 90% of losses should business venture fail up to a maximum of 25% of total lending portfolio Loans to First Nation individual businesses can be issued from $250K to $500K while loans to First Nation community-owned businesses can be issued from $250K to $5M Initiative is currently delivered by five commercial financial institutions - $13.5M total investments

  17. Moving Forward Implementation of the new framework Development of programs and mechanisms to connect Aboriginal communities and people to these opportunities Investments Systematic and evidence based approach to identifying opportunities in key sectors with greatest opportunity Mining, oil and gas, clean energy, forestry, fishery, tourism Aboriginal Economic Development Information System (AEDIS) Illustration/Assessment of: – Community investment readiness strengths and limitations – Community industry sector potential

  18. Aboriginal Economic Development Information System (AEDIS) Decision making/Investments based on accurate and comprehensive information – Source of reference data over time – Close collaboration with industry/association – Sharing with communities – One of many lines of evidence informing decision making Two Modules • InvestmentReady Module – CommunityEconomicDevelopmentCapacity • IndustrySectorOpportunities Module – CommunityIndustrySectorPotential

  19. AEDIS: Module 1Investment Ready Module Five groups of indicators(total of 24) – Capital (Financial) Resources (6 indicators) – Governance Capacity (4 indicators) – Infrastructure (5 indicators) – Human Resources (5 indicators) – Planning, Research & Advocacy (4 indicators)

  20. 7 Human Resources Band-owed capital balances. Band-owed revenue balances. Is there a Specific Claims Settlement pending? The community does not have any receipt-managed intervention imposed by INAC. The community does not have the above and its finances con-managed as a result of INAC intervention. The community does not have the above and is not under Third Party Management as a result of INAC intervention. A younger than average population. Increasing in employment. The community has a post-secondary accreditation percentage that is higher than the national average for Aboriginals. Lower than average government to private sector employment ratio. Higher than average earned-income ratio. 20% 20% 20% 20% Planning, Research & Advocacy 20% Infrastructure The community has accessed the Community Economic Development Program. The community has a Comprehensive Community Plan in place. The community is in the process of developing a Comprehensive Community Plan. The community supports membership in CANDO. Governance • Above average community assets. • Above average ratio of households with internet. • There are no contaminated sites on reserve. • There are no potentially contaminated sites on reserve. • The community has at least one commercial lease in place. The community has s self-government agreement in place. The community has signed on to FNLMA. The community has signed on to RLEMP. Land Taxation measures have been introduced through Section 83. AEDIS: Module 1Investment Ready Module Capital CIDM 1402082

  21. Industry Sector Opportunity ModuleCommunity Industry Sector Potential Eight industry sectors – Oil and Gas (4 indicators) – Green Energy - Hydro Power (7 indicators) - Wind Energy (8 indicators) – Mining (8 indicators) – Tourism and Culture (3 indicators) – Transportation (to be developed) – Forestry (to be developed) – Fisheries (to be developed) – Pipelines and Utilities (to be developed)

  22. To Conclude Much positive momentum in very short period of time • Many important stakeholders now working together inside and outside government Addressing information gaps to better inform public/private investment decisions • Need to get private capital reaching Aboriginal communities; lessen dependency on government transfers, support long term sustainability/self sufficiency Better integrated/more strategically focused government programs • Be able to consider a project in its totality • Many moving parts/elements/stages • Development/projects occur over a number of years • New Framework will work to address these programming gaps

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