Indigenous Communities Need Economic Empowerment More Than Social Programs

What is the role of Indigenous communities in Canada’s current and future economy?

Indigenous communities play a huge role in Canada’s economy and will continue to do so. Many regions throughout Canada benefit economically from the progress made by Indigenous businesses and governments in their respective regions. Many Indigenous businesses also employ non-Indigenous people. Indigenous businesses and governments, along with their employees, purchase their goods and services from suppliers throughout the region. As Indigenous communities and nations continue to exert their established legal rights within their traditional territories, it will benefit everyone to work closely with Indigenous people. Moreover, we have the fastest growing population in Canada and in regions like Northern Ontario, we will be close to 23% of the population in the next generation.

What is the importance of supporting Indigenous economic development to Canada as a whole?

Every time Indigenous communities grow and develop their economy, they positively impact regional economies. Helping Indigenous communities to strengthen their economies not only yields benefits in terms of job creation and higher income for local businesses and services around the region, but it also minimizes the use of social programming. When you look at the federal spending on Indigenous people, less than 4% is spent on economic development, the rest is all social programing. That is perpetuating the social programing cycle. We believe that, in some way, this perpetuates the colonial efforts to keep Indigenous people under a social umbrella instead of allowing us to participate as equals in the Canadian economy.

“When you look at the federal spending on Indigenous people, less than 4% is spent on economic development, the rest is all social programing.”

Indigenous communities and nations are no different than other communities or provinces; we need to have a strong economic base. The NIEDB board produces a National Indigenous Economic Progress Report with our third report being published in June 2018. The report measures the economic progress of Indigenous people using indicators related to income, employment and education, amongst others. Our 2015 report showed that there was a growing gap and overall decline in Indigenous economic progress between 2012 and 2015 in terms of progress on income and employment. This occurred while the general Canadian economy was improving. There needs to be a collective, targeted effort to support Indigenous engagement in the Canadian economy through jobs and business development, particularly in providing the goods and services that their own communities and regions need.

Another challenge for Indigenous economic growth is access to capital. Are we seeing improvements in that area and what can governments, the private sector and Indigenous communities themselves do better to increase access to capital?

Indigenous communities, entrepreneurs and institutions recognize the need to make the business case for receiving additional capital. Having the right tools, supports and the seed money to start and develop a business helps to access to capital. There are many creative ways for Indigenous people to access capital to become involved in major business projects. One model, for example, is where Indigenous people are allocated shares of the business upfront, which are then paid for over time through the revenues generated by the business. Another example is the First Nations Finance Authority (FNFA), which provides credit to First Nations at the lower interest rates that municipalities enjoy. FNFA enables First Nations to invest in economic infrastructure and the savings accumulated by the First Nations through this source of financing are now spent on other important services to their people. The federal government and participating communities have invested in this important source of capital.

“The public sector needs to put in place revenue sharing agreements and the private sector needs to look at opportunities to cultivate business partnerships with Indigenous communities to begin the economic reconciliation process.”

The public sector needs to put in place revenue sharing agreements and the private sector needs to look at opportunities to cultivate business partnerships with Indigenous communities to begin the economic reconciliation process. Corporate Canada can also play a big role by engaging meaningfully with Indigenous people and supporting Indigenous suppliers of goods and services. However, Indigenous communities should ensure that they have support systems in place to enter into a business partnership, to develop criteria to evaluate the quality of partnerships, to negotiate with the right knowledge and to build capacity. One of the things that the Waubetek Business Development Corporation has been working on at the direction of the First Nation leadership is a Center of Excellence for Indigenous Mineral Development. This will be a clearinghouse of information and a resource for First Nations and Industry to learn about leading practices from other Indigenous people involved in the industry. Learning from each other’s experience will ensure that all parties undertake informed decision-making and can build upon the steps created through the efforts of other similar relationships.

Are Indigenous communities supportive of natural resource development or against it?

Our people believe that we are stewards of the land and that is a responsibility that was given to us by the creator. Our connection to the land is very deep; it is part of our ceremony and our language. But we also know that we use products that are derived from the land. We use stainless steel every day, wood for our home structures, computers, cell phones and numerous other products derived from natural resources.

“We need just over 135,000 Indigenous jobs to bridge the gap between Indigenous and non-Indigenous employment in Canada. But this goal is achievable with the participation of all regions and sectors of the economy.”

In this day and age, we need to produce as per our needs, not in excess. We need to look at the economy in a more sustainable manner. When it comes to energy, we must emphasize alternatives such as solar power and fast track some of these technologies, which will promote sustainable development. That is the kind of view that Indigenous people can bring to boardrooms and discussion tables to protect these resources for this planet’s future.

What are the short-term and long-term policy changes that can address the productivity gap between Indigenous and non-Indigenous Canadians?

In last year’s NIEDB report, we showed how Canada’s GDP can be impacted by employing more Indigenous people. We need just over 135,000 Indigenous jobs to bridge the gap between Indigenous and non-Indigenous employment in Canada. But this goal is achievable with the participation of all regions and sectors of the economy. For example, in Atlantic Canada, all we need is about 4,000 jobs to be created for Indigenous people to be at the same employment level as others in that region. If SMEs, educational institutions, health organizations, corporate Canada, the public sector and our own organizations in Atlantic Canada contribute and hire Indigenous people, creating 4,000 jobs is achievable.

“All the Aboriginal Financial Institutions in Canada so far have lent over $2.5 billion to 43,000 Indigenous businesses and there is a potential for more, particularly in the rural and remote regions of the country.”

The Waubetek Business Development Corporation has invested almost $80 million in about 3,500 Indigenous business projects, leading to significant job creation. There are successful Aboriginal Financial Institutions (AFIs) like this across Canada that have been in place for 30 years, but some struggle with having sufficient capital to meet the growing population and demands of Indigenous people. The government provides capital to Community Futures organizations but most AFIs do not have ongoing access to capital nor operational funding. Collectively, the AFIs in Canada have lent over $2.5 billion to 43,000 Indigenous businesses but there is potential for so much more, particularly in the rural and remote regions of the country. Indigenous people often live in rural and remote areas where we are the only ones who can provide goods and services to the population. So why can we not be resourced at a sufficient level to build such businesses in a manner at least similar to mainstream rural programs to overcome the real challenges and gaps in building our economies?