Toward a New Federal Framework for Aboriginal Economic Development: A Case Study Presentation to Public Sector Management Workshop 2009.

Toward a New Federal Framework for Aboriginal Economic Development:

A Case Study

Presentation to Public Sector Management Workshop 2009

The Current Federal Approach to Economic Development

Current suite of programs date from the Canadian Aboriginal Economic Development Strategy 1989

Focus on three interconnected areas of economic activity, across three departments: Labour market development (HRSDC); Business development (Industry Canada); Community development (INAC)

Conditions, needs and opportunities have changed significantly since 1989

Current Federal Spending on Aboriginal Economic DevelopmentProgram Name/ Type Department Budget in $ Millions

Community Economic Services, Institutions and RegulationsCommunity Economic Development Program Indian and Northern Affairs Canada $109.6Aboriginal Aquatic Resource and Oceans Management Fisheries and Oceans Canada $5.0First Nations Forestry Initiative Natural Resources Canada $5.9

$120.5Labour Market DevelopmentAboriginal Human Resource Development Strategy Human Resources and Social Development Canada $344.0Aboriginal Skills and Employment Partnership Human Resources and Social Development Canada $20.8

$364.8Business Establishment and ExpansionAboriginal Business Development Program Indian and Northern Affairs Canada $37.3Allocation Transfer Program Fisheries and Oceans Canada $10.0Atlantic Integrated Commercial Fisheries Initiative Fisheries and Oceans Canada $10.0Pacific Integrated Commercial Fisheries Initiative Fisheries and Oceans Canada $35.0

$92.3Total $577.5

*Other programs also support Aboriginal Economic Development, such as the Strategic Investments in Northern Economic Development program and programming offered by Regional Development Agencies.

Aboriginal Economic Development is a Priority

Budget 2008: A commitment to establish a new federal framework for Aboriginal economic development

The Government will work with Aboriginal groups and other stakeholders to develop a framework that will be partnership-based and opportunity-driven and that will ensure that federal investments help Aboriginal Canadians benefit from viable economic opportunities.

A new federal framework for Aboriginal economic development will provide long-term strategic direction for government actions in support of Aboriginal economic development

Aboriginal Canadians must be full participants in the Canadian economy

Aboriginal Canadians can help fuel Canada’s economic performance and recovery

Growing Aboriginal population can meet Canada’s long-term labour market needs

Income and employment parity between Aboriginal and non-Aboriginal Canadians would contribute nearly $8 billion to the Canadian economy

Corporate Canada needs and wants to work with Aboriginal Canada

Substantial and growing land base represents significant opportunity for regional economies, natural resource development and commercial development

Private sector wants to work with Aboriginal communities to avoid disputes and delays over major developments that could be worth up to $315 billion

Duty to Consult has reinforced importance of Aboriginal participation in projects

Economic development increases self-reliance and reduces social costs

Participation in the economy means escaping “cycle of dependency” - failure to address means greater reliance on social programs and costs to government

The State of Aboriginal Economic Development

 Unemployment

Rate Self-employment

RateAverage Annual

Income

GovernmentTransfers as a % of Total Income

 Census

2001Census

2006Census

2001Census

2006Census

2001Census

2006Census

2001Census

2006

First Nations(on-reserve)

300,75527.8% 24.9% 4.5% 3.6% $14,383 $15,958 32.0% 28.6%

First Nations(off-reserve)

397,26518.6% 14.0% 6.9% 7.1% $19,728 $24,519 20.0% 18.6%

Inuit50,485

22.2% 20.3% 5.0% 3.2% $19,878 $25,451 20.3% 17.7%

Métis389,780

14.0% 10.0% 9.2% 8.4% $22,213 $28,226 15.7% 13.8%

AboriginalPopulation1,172,785

19.1% 14.8% 7.2% 6.8% $19,132 $23,888 20.8% 18.1%

Non-AboriginalPopulation30,068,240

7.1% 6.3% 12.1% 12.0% $30,062 $35,872 11.6% 10.9%

Economic Outcomes of Aboriginal Canadians (Census 2006)

Gender Labour force participation rate

First Nations

Women on reserve 55.6%

Women off reserve 69.3%

Men on reserve 48.3%

Men off reserve 59.3%

InuitWomen 58.9%

Men 63.9%

MétisWomen 66.3%

Men 74.1%

Aboriginal population Women & Men 63.0%

Non-Aboriginal population

Women & Men 66.8%

Total Labour Force 15 Years of Age and Over By Class of Worker, First Nation Identity and the Non-Aboriginal Population, 2006

Per Cent of Population 15 Years of Age and Over Whose Highest Level of Education Is Less Than High School, First Nation Identity Population On and Off Reserve and the Non-Aboriginal Population, 1996, 2001 and 2006

First Nations Communities and Community Well-being

Community Well-being Index (CWB) distribution for Aboriginal and non-Aboriginal communities

0

0.2

0.4

0.6

0.8

1

1.2

0.35

0.42

0.44

0.46

0.48 0.

50.

520.

540.

560.

58 0.6

0.62

0.64

0.66

0.68 0.

70.

720.

740.

760.

78 0.8

0.82

0.84

0.86

0.88 0.

90.

920.

940.

96

5 per. Mov. Avg. (Aboriginal) 5 per. Mov. Avg. (non-Aboriginal)

Building on Success

Outcomes have been improving

Significant increases in the labour force participation, self-employment and earned income of Aboriginal Canadians over the past 20 years

An increasing number of Aboriginal communities are achieving outcomes comparable to non-Aboriginal communities

Although gaps continue to exist in outcomes between Aboriginal and non-Aboriginal Canadians

Conditions and opportunities are changing

Private investment and development are pushing further into every region of the country

Historic evolution in the roles and relationships of all levels of government, the private sector and Aboriginal peoples

A new approach is needed

More significant gains can be achieved with a more up-to-date approach that is driven by these new opportunities, responsive to the new conditions, leverages partnerships and is more focused on results

Dimensions of economic development:Analytic model

Text styles Second level

CLIMATECreating the right economic

conditions

BASEBuilding economic potential

Lands and natural resourcesInfrastructurePeople

Business developmentCommunity investment strategiesLabour market developmentPrivate sector partnershipsMajor project participation

Legal and regulatory climateGovernance and institutionsFiscal capacity and arrangements

ACTIVATIONTaking advantage of

opportunities

Aboriginal Economic Development has Unique CharacteristicsIdle Community-owned assets

Growing base of community-owned assets need to be activated to build successful and dynamic economies

A non-business friendly climate (laws, regulations, lands and resource management regimes, infrastructure, governance and institutions) marginalizes communities from mainstream economy and prevents communities from attracting outside investment

Not all communities have the same needs, conditions or opportunities

Under-developed Aboriginal private sector

A larger Aboriginal-owned private sector is critical to improving income and employment outcomes

Persistent difficulties in accessing private capital and investment hampers business start-ups, growth and market development

On- and off-reserve economic climate requires different business strategies and approaches

Emerging labour force

Largest growing segment of Canada’s population is poised to enter the labour market over next 10 years

Skills development and training need to be better aligned with labour market needs

Moving Forward on Economic Development

One size does not fit all

Federal actions must respond to the viable opportunities and the real conditions of First Nations, Inuit, and Métis businesses and communities across Canada

Canada must employ a whole-of-government approach to achieve the greatest benefit from federal intervention, including on a sectoral and regional basis, and through both Aboriginal-specific and mainstream programming

Implementation is key

Stronger governance structure will ensure coordination across government and between partners, and greater accountability to Canadians

Canada must continue to engage with all players to ensure federal investments and actions keep up with dynamic and changing environment

The federal government cannot act alone

Canada can play an important role in setting the right conditions for better economic development outcomes, but does not have all levers, responsibility and resources

Canada must work in partnerships with Aboriginal Canadians, provinces, territories, and Corporate Canada to share responsibilities and build success

Partners

Promoting Partnerships

Major Resource and Energy Development Investments Initiative

Designed to help Aboriginal businesses partner in some of the most important economic developments and energy projects across Canada

Will leverage financial participation from other levels of government, the private sector and Aboriginal partners to increase the availability of equity funding to medium and large Aboriginal businesses

Examples

Aboriginal Energy Partnership (British Columbia)

$7 million fund co-managed by Ecotrust Capital Canada and 2 Aboriginal Capital Corporations

Business Ready Investment Development Gateway (Saskatchewan)

Pilot investment to Westcap Management Limited that will provide funding and training to Aboriginal communities to help them become “business-ready”

First Peoples Economic Growth Fund (Manitoba)

Partnership between Manitoba Hydro, the Province of Manitoba, and the Government of Canada

Aboriginal Economic Development: Some Conclusions

Participation in the Canadian economy is key to improving the outcomes for Aboriginal Canadians

There are important opportunities for Aboriginal Canadians and for all Canadians

There is broad consensus on the need for change

Working in partnership is the way forward