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KPMG FA Benefits Report - FINAL - Jan 27 - 2010
KPMG FA Benefits Report - FINAL - Jan 27 - 2010
Final
Contents
• Cost Analysis
• Benefits Analysis
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cooperative. All rights reserved.
2
Purpose of the study
• Capture the current costs and benefits of implementing the Framework Agreement on First Nations Land
Management (FA) to ascertain the true cost to First Nations and Canada.
• To estimate the cost and benefits of expanding the number of signatories to the FA.
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3
Study objectives
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4
Work plan overview
ESC ESC
May Oct
Phase V
Reporting
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5
Work plan overview – Five phases
First Nations
Beecher Bay First Nation Sliammon First Nation
Chippewas of Georgina Island Squaila First Nation
Kinistin Saulteaux Nation Tsawout First Nation
L'Heidli T'enneh First Nation Tsawwassen First Nation
McLeod Lake Indian Band Ts'kw'aylaxw First Nation
Mississauga's of Scugog Island First Nation Tsleil-Waututh Nation
Muskoday First Nation T'Sou-ke Nation
Nipissing First Nation Tzeachten First Nation
Opaskwayak Cree Nation Westbank First Nation
Whitecap Dakota First Nation
Government of Canada
INAC HQ INAC Regions Other Gov’t Dept’s
• Land registry & operations • Atlantic • NRCan
• First Nations Land Management • Quebec • DOJ
Initiative • Ontario • Env Can
• Environment • Manitoba
• ATR & Titles • Saskatchewan
• Legislative Initiatives • Alberta
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7
Methodology/Approach to Costing
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8
“Type” of activities
• FNLM-V – activity performed to Liaison with FNs and FN Land Mgt Institutions
Liaison with orders of government
Complex
Complex
Complex
Complex
support the FNLM Initiative but Liaison with Third Parties
Natural Resources Mgt documt/research/commtn
Complex
Complex
Complex
Complex
will vary by the number of Land Use Planning # designatn for GOC Complex Volume
transactions/registrations
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9
“Type” of activities (cont’d)
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10
FN complexity criteria/classification table
Size
Rating 1 Rating 2 Rating 3
Number of reserves: 1-4 5-14 15 or more
Total population on reserve: < 500 500 to 999 1,000+ FN mbrs &/ resid'l tenants
Total registered band members < 500 500 to 999 1,000 or more
Classification Key
Score Rating
>10 Category C
6-10 Category B
1-5 Category A
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11
Foundational analysis of cost and transaction
data
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cooperative. All rights reserved.
12
Findings on cost and transactions
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13
Transactions or Registrations
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14
Transactions or Registrations – Historical Trends
• This chart illustrates the total number of registrations over the last ten years for FNs that have
operated under the Indian Act versus those FNs that are currently (as of FY 08/09) operating under
FA (or Self-Government).
• FNs operating under the Indian Act (blue line) show some high and low years but an overall average
decrease in the number of transactions of 1% per year.
• FNs operating under FA (green line) show an overall average increase of 9% per year.
• If we use an average number
of transactions registered prior
to land code coming into effect
as an estimate of what FNs
operating under FA would
register if they were continue to
operate under the Indian Act
(red line) we see that they would
initially registered more
transactions but after a period
of transition they would register
less. The average increase
would be about 3% per year.
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15
Transactions or Registrations for FA FNs (cont’d)
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16
Transactions or Registrations by Type
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17
10 year transaction forecasts – Status quo
• Indian Act First Nations see the number of transactions decrease by 5% (or
358 transactions).
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18
10 year transaction forecasts – Status quo FA FNs
3,700
# of FNLM transactions
3,500
3,300
3,100
2,900
2,700
2,500
08_09 09_10 10_11 11_12 12_13 13_14 14_15 15_16 16_17 17_18 18_19
Fiscal Year
FY 08_09 09_10 10_11 11_12 12_13 13_14 14_15 15_16 16_17 17_18 18_19
Year 0 1 2 3 4 5 6 7 8 9
# of transactions 2,669 2,749 2,973 3,259 3,408 3,464 3,507 3,532 3,532 3,532 3,532
% Incr from 08_09 +3% +11% +22% +28% +30% +31% +32% +32% +32% +32%
Cum transactions 2,973 6,232 9,640 13,104 16,610 20,142 23,674 27,206 30,737
*No new FNs enter as development
resulting in 42 operational FN by FY 2010/11.
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19
10 year transaction forecasts – Status quo Indian Act FNs
6,900
# of IA transactions
6,800
6,700
6,600
6,500
6,400
6,300
6,200
08_09 09_10 10_11 11_12 12_13 13_14 14_15 15_16 16_17 17_18 18_19
Fiscal Year
FY 08_09 09_10 10_11 11_12 12_13 13_14 14_15 15_16 16_17 17_18 18_19
Year 0 1 2 3 4 5 6 7 8 9
# of transactions 6,782 6,784 6,647 6,462 6,453 6,444 6,438 6,432 6,428 6,425 6,424
% Incr from 08_09 +0% -2% -5% -5% -5% -5% -5% -5% -5% -5%
Cum transactions 6,647 13,109 19,562 26,006 32,444 38,876 45,304 51,729 58,153
*No new FNs enter as development
resulting in 520 Indian Act FNs by FY 2018/19.
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20
First Nations: Current Land Management
Resources
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21
First Nations – Current and Additional/New Resources
• The sample of 12 First Nations currently (i.e., in FY 08/09) employ 50 FTEs but
feel it is necessary to add on ~37 additional/new FTEs (or increase by 75%).
This currently costs the FNs $6.3 million (in salary, O&M and capital), and will
increase to $9.4 million with the additional resources.
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22
First Nations – Current FTEs and Costs by Type of Activity
• 69% of FTEs and 79% of costs are currently being allocated to activities that
are driven by the complexity** of land management.
• 27% of FTEs and 19% of costs are dedicated to volume or transaction based
activities. Overall, 1,896 transactions were registered in 08/09.
• The average costs of registering a transaction ranged from approximately $370
(for FNs rated as a C) to $1,500 (for FNs rated as a B).
Com- # of Registra- Current FTEs by Type of Activity Current Costs ($000s) by Type of Activity
plexity FNs tions* Complexity FNLM Volume Vol/Reg Complexity FNLM Volume Vol/Reg
Total over participating First Nations
A 4 0 5.4 0.7 0.7 465.9 42.3 53.0
B 5 387 8.9 0.6 5.2 0.0134 1,721.2 72.7 581.5 1.50
C 3 1,509 20.1 0.6 7.6 0.0050 2,812.3 38.7 556.2 0.37
Total 12 1,896 34.4 1.9 13.5 0.0071 4,999.5 153.7 1,190.7 0.63
% of Total 69.1% 3.9% 27.0% 78.8% 2.4% 18.8%
*Registrations logged in 08/09
**This includes activities such as governance, environmental management, operational design, relationship building, monitoring, compliance and enforcement.
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23
First Nations – Add/New FTEs and Costs by Type of Activity
• First Nations feel it’s necessary to add resources mainly to activities that are
driven by the complexity of land management, in fact 90%(or more) of both
FTEs and costs are identified against activities such as governance,
environmental management, relationship building, land use planning,
monitoring, enforcement and support services.
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First Nations – Add/New Costs by function
Governance/Regs, 8%
Enforcement, 6%
Relationship Bldg, 4%
Monitoring, C&I, 9% Natural Resources Mgt,
Financial Mgt, 1% 3%
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25
INAC: Current Land Management Resources
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INAC - Current and Additional/New Resources
• 170 FTEs or $41 million in INAC resources currently support land management
activities. This includes Headquarters and the 7 Regions expenditures for
direct salary, direct O&M, support and some of the G&Cs.
• Both Headquarters and the Regions indicate additional resources are required
(increases of 26% in FTEs and 11% in costs).
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INAC – Current FTEs and Costs by Type of Activity
• Fairly equal FTEs are being allocated to complexity versus volume type
activities. Most of the costs (about 40%) fund volume type activities.
• Overall to process a transaction/registration under the Indian Act, it costs
about $2,350 in the Regions and an additional $60 at Headquarters for a total
of $2,410.
• It also costs about $60 for Headquarters to register instruments under FNLRS
or SGLRS, i.e. transactions negotiated/registered by FNs under FA or Self
Government
Dir/ # of Registra- Current FTEs by Type of Activity Current Costs ($000s) by Type of Activity
Region Dir/Reg tions Complexity FNLM* Volume Vol/Reg Complexity FNLM* Volume** Vol/Reg
Total for INAC HQ and Regions (direct support)
HQ 1 6,783 14.1 14.9 5.2 0.0008 2,823.1 6,755.7 401.5 0.06
Region 7 6,783 66.1 4.8 65.2 0.0096 6,799.3 9,219.0 15,914.7 2.35
Total 7 6,783 80.1 19.7 70.4 0.0104 9,622.4 15,245.2 16,316.3 2.41
% of Total (per above) 47.1% 11.6% 41.4% 23.4% 37.0% 39.6%
FNLM - Volume 2,669 0.0009 0.06
* Includes registration of instruments under FNLRS/SGFNLRS, developmental funding and operational funding. Excludes NRCan and
DOJ MOUs.
** Includes RLEMP, RLAP and 53/60 funding (with support costs).
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INAC – Add/New FTEs and Costs by Type of Activity
• INAC has identified the need to increase resources in all three types of activity
areas.
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29
FNs Operational Funding versus Costs
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First Nations – Operational Funding versus Current Costs
$000s % of
• In total, of the sample12 FNs, Com- # of Current Funding Current
operational funding is providing plexity FNs Opt'nl ESA EMA Costs
Total over participating First Nations
54% of their current A 4 418.4 0.0 0.0 561.2
expenditures. This percentage B 5 1,071.5 212.8 0.0 2,375.5
varies depending upon C 3 1,546.4 190.0 0.0 3,407.2
Total 12 3,036.3 402.8 0.0 6,343.8
complexity category. Those * Funding figures provided by HQ-FNLM and it
grouped in A are funded to 75% includes ESA & EMA funding.
of their current costs whereas
both B’s and C’s are funded at A 75% 25%
Complexity
54% and 51% of costs, B 54% 46%
respectively.
C 51% 49%
• Note: This analyses looks at total costs and 0% 20% 40% 60% 80% 100%
does not take into consideration whether an
% of Current Cost
activity is funded or not.
Funded by GOC Not Funded
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First Nations – Funding versus Estimated Costs
Complexity
B 32% 27% 41%
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32
Benefits Review
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Methods
• Web survey was distributed to 26 First Nations who were operational as of July
2009. Responses were received from 17 First Nations.
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Overview of Findings – Benefits Review
• The FA provides better circumstances for First Nations to improve their land
management systems and processes (i.e., governance and decision making,
community support, relationship building , more favourable terms and
conditions, etc. ).
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35
Overview of findings – Benefits Review (cont’d)
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Why did your First Nation become signatory to the Framework
Agreement (FA)?
• First Nations respondents were asked to provide all reasons why they became
signatory to the FA. “Control own lands”, “control decision-making” and
“economic development” were the top three reasons selected by respondents:
Reason
(n) (%)
Control own lands 13 81.3%
Build community pride 11 68.8%
Control decision-making 13 81.3%
Economic-development reasons 13 81.3%
Other * 3 18.8%
• First Nation respondents were then asked to identify the main reason why they
became signatory to the FA. 59% of respondents selected “Control own lands”
as their main reason.
* Other reasons cited:
Treaty, direct control over lease revenue; control leasing permits.
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37
To what extent did your First Nation develop its land
management processes and decision making systems prior to
becoming signatory to the Framework Agreement?
• There is a fairly even split To a To a con- To To a
between FN respondents who great siderable some small Not at Not
developed land management extent extent extent extent all applicable
processes from a great extent 1 2 3 4 5
to some extent prior to becoming signatory to 5.9%
the 5.9% 35.3% 11.8% 41.2% 0.0%
FA and those FN respondents who developed land
management processes to a small
Mean
extent or not at all. 3.8
• With a mean rating of 3.8, FN respondents, as a
minimum, did
develop land management
From
processes to a small extent before becoming an From
"A small extent"
"A great extent"
operational FA band. However, there is still a large or
number of respondents reporting land management to "Not at all"
"Some extent"
processes were not developed at all prior to
becoming operational. 47% 53%
(n=17)
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To what extent has your First Nation been able to develop its
land management processes and decision making systems
since becoming operational under the FA?
To a To a con- To To a
• With a mean rating of 2.8, First great siderable some small Not at Not
Nation respondents, as a extent extent extent extent all applicable
minimum, have been able to 1 2 3 4 5
develop land management 17.6% 23.5% 29.4% 23.5% 5.9% 0.0%
processes and decision making
systems to some extent since
Mean
becoming an operational FA
2.8
band.
• There is 29% of respondents From
From
indicating they have made "A small extent"
"A great extent"
progress to a small extent or to or
not at all. "Some extent" "Not at all"
29.4%
70.6%
(n=17)
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To what extent do you feel your First Nation is still in transition?
To a To a con- To To a
• With a mean of 2.8, great siderable some small Not at Not
most First Nations still extent extent extent extent all applicable
place themselves in 1 2 3 4 5
23.5% 17.6% 23.5% 11.8% 17.6% 5.9%
transition, to some
extent. Mean 2.8
From
From
• 29% of respondents "A great "A small
extent"
extent"
indicated that they have to or
moved out of transition "Some extent"
29% "Not at all"
or are experiencing
transition to a small 65% 6%
extent or not at all. N/A at this
time
• Some First Nations (n=17)
have had operational Further elaboration in support of First Nations’ ratings include:
capacity in place for a Some First Nations are still dealing with issues related to funding, training and dedicated resources.
This has made transition to becoming operational very slow.
number of years in Legacy issues are still being dealt with for some.
advance of the FA. Some First Nations that have been operational for several years still consider themselves in
transition due to difficulties implementing a fully functional land management office.
Land law development (i.e. environmental management) has taken longer than anticipated.
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40
On average, does your First Nation find the processes
surrounding land management activities to be faster or slower
than those when you were operating under the Indian Act?
Faster
(n=16) 75%
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On average, does your First Nation find the processes surrounding
land management activities to be faster or slower than those when
you were operating under the Indian Act?(cont’d)
Average length of time
• Some of the changes in (specify days or months)
processing time are quite Process
● Allotment/Land Use -
Pre-land code
3 - 4 months
Currently
1-5 days
significant. Examples of the - 6 mth-1 yr 1 month
● Collections - 12 months 1 month
changes in process timing - 2-3 weeks 1 week
were provided by First Nation - 2-3 mths Monthly, direct
- Up to 1 years to collect all Direct monthly collection
respondents as follows: lease revenues by cheque
● Leases - 2 - 15 years under one year
- 6 months 30 days
- 6 months 1 month
- 6 months 3 months
- 1 month 2-3 days
- Years 8-12 months
- 7 mths 2 months
● Registration - 1 year 1 month
- 12 months 1 month
- Avg. 3 months 1-5 days
- 1 month 2 wks
- 6-12 mths 1-2 days
- 2 weeks 3 days
- 2 weeks 1 day
- 3 weeks immediate
- not sure but slower not sure but faster
● Applications - 10 days 1/2 day
● Approvals - 1 day 1 day
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42
How has FA impacted the following characteristics of
governance/decision making for your FN?
• The FA has had a positive impact Extent band members involved 94% 6%
• Not far behind are all other attributes Autonomy for best use of land 82% 12% 6%
of governance and decision making as Cost or adequate resourcing 47% 18% 29% 6%
being better.
0% 20% 40% 60% 80% 100%
• The areas where some First Nations % of Respondents
indicated a rating of worse, further (n=17)
elaboration on these circumstances indicate Better No change Worse N/A
that increased requirements, need for
technical knowledge and expertise, lack of “It’s good that we are able to function more
independently from the department in our land
training and resources are proving difficult matters, but we should still be afforded the same
for some to support expectations and resources as the department would have if they were
undertake essential activities. still administering our land programs.”
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43
How has the FA impacted your FNs ability to develop more
favourable terms and conditions for land related transactions?
• Overall, the FA has had positive impacts on First Nation’s abilities to develop more favourable terms and conditions for land related transactions.
• Protecting community values for development and flexibility are the two areas identified by the greatest number of FN respondents as being better.
Not far behind are protecting community legal
interests, lease terms and accountability for
third parties also identified as better.
• For attributes such as revenue generation
and environmental protection , most
respondents identified these as being better
although some respondents indicate there
has been no change or that this attribute is
not applicable at this time.
Protect values for development 94% 6%
• In the area of consistency with land use plan,
most respondents mentioned that this question
does not apply at this time, that there was no Flexibility 94% 6%
change, or in one instance that the that the
conditions for consistency with the land use
plan were actually worse. In this instance, again Protect community legal interests 88% 13%
it is a lack of appropriate training and resources
cited to perform required research as the main
reason why. Lease terms 76% 12% 12%
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44
How has the FA facilitated relationships with third parties for
your First Nation?
• The majority of First Nations have identified relationship building components as being better
since becoming operational under the Framework Agreement.
• Direct involvement with the First Nation (88%), increased certainty/sense of security for
third parties (88%), and a better negotiating environment (76%) were the top three factors
noted to be better.
Direct involvement with the First
• Even though a majority (59%) of Nation
88% 12%
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45
How has the FA strengthened other initiatives within your First
Nation?
• According to First Nation respondents, the FA has strengthened other initiatives within their First Nation for the most part. Respondents note areas such as the achievement of overall vision (82%), marketability (71%) and interactions with other FNs
(71%) are better since becoming operational.
• The exception is access to
support resources (such as legal,
environmental, etc…) where
approximately half have
indicated that there has been
no change and a small
percentage indicated that access
is worse. The increased need for
technical expertise and an inability
to fund these types of
requirements were noted as
reasons why this element is worse.
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46
How has the FA facilitated potential market opportunities?
• Fewer First Nation respondents identified Building municipal relations 76% 18% 6%
was more so related to the First Nation’s Select prime land for development 47% 41% 12%
own awareness of third-party requirements
(particularly provincial requirements Harmonization of land use plan 41% 35% 24%
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47
What are some of the factors influenced by operating under the
Framework Agreement that contribute to attracting business to
your reserve?
• Overall, First Nations are experiencing improved circumstances under which they are able to attract business on reserve.
• Some of the factors that have influenced the environment are:
• Control being exercised locally provides direct access to First Nations representatives – decisions are absolute and not delayed by having an additional party involved
• A First Nation’s controlled development of the reserve and businesses, including land laws and regulations provides increased sense of security to investors.
• Land code (and supporting instruments) provide third parties with clear understanding of conditions
• The most cited factor contributing to the attraction of business activity on reserve lands are the efficiencies gained in relation to land management processes, including
simplification and improved processing conditions
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48
How has FA impacted the following attributes within your First
Nation community?
respondents reported there has been no 0% 20% 40% 60% 80% 100%
change. % of Respondents
(n=17)
Better No change Worse N/A
• Respondents mentioned an increased sense of pride resulting from community involvement in the consultation process
and the economic development of the First Nation.
• Similarly, increased levels of community interest in lands as members of the community felt included throughout the
transition phase.
• The two elements with a worse rating are related to inadequate (or lack of) training (e.g., to be fully aware of
accountability within a Lands Office)
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49
Based on your operational experience to date, would your First
Nation consider returning to operations under the Indian Act?
• 100% of First Nations responded “No” to this question; no First Nation would
consider returning to operations under the Indian Act.
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50
How has the FA impacted business on reserve?
Since having your land code in effect, has this impacted new business creation or business expansions on
reserve? If yes, how many new businesses or expansions have been created?”.
• Eleven First Nation respondents (65%) indicated there has been at least one new business created (or
expanded) on their reserve land since their land code came into effect. Most of these First Nation respondents
have been operational for at least six years.
• The most common response falls between one and five businesses being created or expanded.
Number of
Respondents
One 3
Two 3
3 to 5 3
6 to 10 1
>10 1
No new/expansions 6
(n=17)
• Six First Nation respondents (35%) indicate there has been no new business creation or business
expansion on their reserve land since their land code came into effect. We could find no common
attribute among First Nations within this sub-respondent group to identify a trend (i.e., length of time
operational, geographical location, etc.) We refer back to the question on the reasons FNs become
signatory to the FA where 81% of First Nation respondents selected “control own lands” as one of
the reasons and 59% of respondents identified “control own lands” as the main reason.
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51
How has the FA impacted business on reserve? (cont’d)
Number of
Respondents
FN members 10
Non-members 3
Band-owned 2
External partners 3
Other 1
(n=19)
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52
Has the FA contributed to higher employment?
How many new jobs have been created by these new businesses or business expansions?
• 11 First Nation respondents (65%) indicated new jobs have been created by the new businesses
identified.
• The most common response was between 6 and 25 new jobs being created on reserve.
• Two First Nation respondents identified more than 500 jobs have been created on their reserve.
• Using the mid point of each range we can estimate that 1,959 jobs have been created.
Number of
Respondents
5 jobs or less 2
6 to 25 jobs 6
26 to 150 jobs 0
151 to 500 jobs 1
More than 500 jobs 2
No new jobs 6
(n=17)
• First Nation respondents also identified positions created within the Band office itself (i.e., GIS
technician, Lands Assistant).
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53
Has the FA contributed to higher employment? (cont’d)
• Seven First Nation respondents identified 50% or more of the jobs are being filled by band members, with
four (29%) reporting that all new jobs are filled by band members.
Number of
Respondents
All 4
More than half 2
About half 1
A few 3
None 4
(n=14)
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54
Has the FA impacted the repatriation of off-reserve band
members?
How many band members have been attracted back to the community due to these new
businesses or business expansions?
• Among First Nation respondents who indicated members had been attracted back to the
community, the most common response (20%) was between 6 and 25 members attracted back
due to new business starts.
• Most First Nation respondents (60%) noted that no members have been attracted back to the
First Nation due to the new business creation.
• Other external influences can impact the attraction of First Nation members back to their
communities. First Nations respondents cited lack of housing and proximity to large service
centres as a few examples.
Number of
Respondents
100 to 200 1
26 to 99 0
6 to 25 3
5 or less 2
None 9
(n=15)
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55
What types of businesses are in place on your reserve?
• 42% of respondent First Nations indicate they are moving into more types of
businesses (e.g., retail, institutional, health, construction, transportation, food
service and tourism) and one FN indicates they are moving into a different type
of business (e.g. out of agricultural)
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56
Has your First Nation been able to attract internal investment in
relation to land within the community?
Since your land code came into effect, has your FN been able to attract internal investment in relation to land
within the community?
• Surveyed First Nations indicate the land code has had a positive impact on an operational First Nation’s ability to
develop internal investment.
• 65% of First Nation respondents indicated they have new internal investment since the land code came into effect.
No new
internal
investment
35%
Internal
(n=17) investment
65%
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57
What amount of internal investment is realized by your First
Nation?
• Among the respondents who indicated that they had been able to develop internal investment, most of them
(70%) reported amounts up to $2 million. Most of this investment has been through the creation of small
member owned enterprises. This supports the earlier finding that most business created or expanded are band
member owned businesses.
• 30% of First Nation respondents indicated they had been able to attract between $10 million and $20 million in
internal investment.
• Using the mid point of each range we can estimate approximately $53 million in internal investment has been
realized by respondent First Nations.
Number of
Respondents
< $500K 3
$500K to $2M 3
> $2M to $5M 1
> $5M to $10M 0
> $10M to $20M 3
(n=10)
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58
Has your First Nation been able to attract internal investment in
relation to land within the community? (cont’d)
• For the group of First Nation respondents that participated in the costing
exercise, a majority are attracting investment in more areas
Yes No Total
(n) (%) (n) (%) (n) (%)
Attract internal investment 9 75% 3 25% 12 100%
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59
Has your First Nation been able to attract external investment in
relation to land within the community?
Since your land code came into effect, has your FN been able to attract external
investment in relation to land within the community?
• For some First Nation respondents, external investment takes the form of a partnership
between a member of the band and an external investor in which both parties invest
funds.
• 53% of First Nation respondents indicated they have been able to attract new external
investments since their land code came into effect.
• Of the 8 First Nations who indicated no external investment:
• 3 have been operational
for 3 years or less. No new
• 4 indicated they are still in external
transition to a considerable investment
extent or a great extent 47%
External
investment
(n=17) 53%
Note: Investment on First Nations corporate lands is not included. There is significant activity in this area in some cases.
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60
What amount of external investment is realized by your First
Nation?
• Among the respondents who indicated they had been able to attract external
investment, two mentioned investments ranging between $2 million and $5
million and two indicated they had been able to attract external investments
worth more than $20 million.
• Remaining First Nation respondents have either captured external investments
valued up to $2 million, or are unable to provide an estimate.
• Using the mid point of each range we can estimate approximately $48.5
million in external investment has been realized by respondent First Nations.
Number of
Respondents
< $500K 1
$500K to $2M 1
> $2M to $5M 2
> $20M 2
Yes, but don't know 3
(n=9)
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61
Has your First Nation been able to attract external investment in
relation to land within the community? (cont’d)
• For the group of First Nation respondents that participated in the costing
exercise, majority of the First Nation respondents that identified the attraction
of external investment, indicated they are attracting investment in more areas.
Yes No Total
(n) (%) (n) (%) (n) (%)
Attract external investment 8 67% 4 33% 12 100%
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cooperative. All rights reserved.
62
How has the FA impacted the average annual revenue
generation on reserve in the following areas?
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63
What is the most significant economic advantage of the FA to
your First Nation?
• Based on the feedback obtained from First Nation respondents, the most
significant economic advantages of the FA are:
- Processes are more timely and efficient
- Increased direct control over leases, licenses, permits
- Higher land related revenue potential
- Ability to borrow for capital investments
- Access to external investment that will generate jobs and revenue
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64
Are there any economic disadvantages to operating under the
FA for your First Nation?
• Based on the feedback obtained from First Nation respondents, the most
significant economic disadvantages of the FA are:
- Costs and processes around Environmental Management Agreements
(EMA).
- Complexity of FA was not fully considered in the areas of legal, technical
issues and costs (EMA, Land Code, Land Use Plan). This lead to
complications and increased costs during transition.
- The above has resulted in delayed movement towards economic
development activities.
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65
What does the literature say?
• A cursory review of literature on the drivers of business and job creation revealed that the
positive impacts being generated by FA (particularly in relation to governance) are key to
economic development.
• One relevant study is the World Bank Policy Research Working Paper on “The impact of
the business environment on the business creation process”.1 This study identifies a very
strong and statistically significant relationship between entrepreneurship and a better
business environment. The greater ease in starting a business and better governance are
associated with increased entrepreneurial activity.
• The Standing Senate Committee on Aboriginal Peoples March 2007 report “Sharing
Canada’s Prospertity – A Hand Up, Not A Handout” 2 , identifies six key factors shared by
Aboriginal communities experiencing economic success. These include areas such as
stable leadership and vision, legitimacy of economic activities to the community, strategic
use of available resources, among others.
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66
What does the literature say? – cont’d
1
The World Bank, Development Research Group, Finance and Private Sector Team, The Impact of the Business Environment on the Business Creation Process,
Policy Research Working Paper #4937, May 2009
2
The Standing Senate Committee on Aboriginal Peoples, Sharing Canada’s Prosperity – A Hand Up, Not A Handout, March 2007.
3
Harvard University, What Determines Indian Economic Success? Evidence from Tribal and Individual Indian Enterprises, The Harvard Project on American
Indian Economic Development, Jorgensen, Miriam and Taylor, Jonathan, Wiener Center for Social Policy, John F. Kennedy School of Government, June
2000.
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67
Wrap-up
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68
Thank you!
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69