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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