Exploring Economic Development Issues

This week I attended the National Aboriginal Business Opportunities Conference in Prince Rupert. The conference was held in Prince Rupert to focus on what is happening in the North and it was an educational experience for many to witness first hand the various developments like the Port of Prince Rupert, container ships, coal terminal, and other projects.

The Metlakatla and Lax Kwa’alaams were co-hosting the conference. They are both involved in major business deals and have received awards from the BC Achievement Foundation for Aboriginal Business. You can find out more information on their businesses at http://www.metlakatla.ca/development_corp and http://www.laxkwalaams.ca/corporate/index.php.

The Metlakatla and Lax Kwa’alaams signed two deals when we were there with Island Tug and Barge and Canadian National Rail. And so begins the implementation of these deals bringing new opportunities. The two First Nations also have an agreement with the Port of Prince Rupert that brought certainty to the expansion of that development. These two First Nations are playing a major part in the economy of Prince Rupert and surrounding area.

With all First Nations the big issue with economic development is capacity building and training. You need knowledgeable and trained people for being on the boards of the Economic Development Corporations and the Chief and Council. To have members supporting First Nations businesses you also need understanding of business with First Nations members. You also need trained, experience people to work on the businesses the First Nation has developed.

As First Nations expand their businesses, ensuring there is enough staff to run the businesses is an important facet. Finding the right ways of training people is a challenge for most companies and there are many models out there on how to achieve that and many others that are still looking for successful models. Would be interesting to hear some best practices on this so we can post it to this website.

With rapid growth, growth management is an issue that must be handled with good planning. It is great that we can start discussing growth management and that First Nations are getting to that point. You have to anticipate the next stage of growth and plan for it so there are no surprises that can stop businesses from progressing or even stop functioning.

The conference was an interesting exploration of many of the industries, mining, tourism, energy, finance, insurance, forestry, best practices and inspiring speeches from Dave Tuccaro a successful aboriginal entrepreneur and Tewanee Joseph on the success of the Four Nations in the Olympics.

One of the interesting issues that arose was when BC Hydro presented on the Northwest Transmission Line. BC Hydro has long been hampered with the absence of a mandate from the Government of British Columbia to do equity ownership and revenue sharing with First Nations on the projects they develop in First Nations territories. They want to do major projects in First Nations territories and unlike the governments of Quebec and Manitoba, revenue sharing and equity ownership is not on the table. The Government of BC needs to provide BC Hydro with this mandate if they want certainty in their projects and indeed, even the development of some of their projects and BC Hydro's hands are tied until they are given such a mandate.

The government of BC has entered into many revenue sharing of different types in the Forestry agreements and in mining with the Kamloops, Skeetchestn , Upper Similkameen and Fort McLeod Lake Bands. There is economic agreements with Blueberry, Doig River, Prophet River and West Moberly based on oil and gas revenues. In fact, BC Hydro has now settled with Kwadacha, Tsay kay Dene and the St’at’imc have just agreed to compensation for major hydro facilities in their territories based on a lump sum payment and a continual annual payment which looks a lot like revenue sharing. It is arguable that they are doing revenue sharing on Heritage Assets. More political pressure needs to be put on the BC Government to provide that mandate to BC Hydro so they can equitably settle with First Nations for power projects in their territories.

The whole concept of benefit and revenue sharing was committed to by the Province of BC in the New Relationship and very little has happened in this regard since its inception in May 2005. The concept of benefit and revenue sharing would be key to assist First Nations in economic development whether it is development costs, equity or training and education.

The Clean Energy Act introduced a fund that started with a $5 million fund with the ability of the government to put more money in it as well as a share of money from the revenues created by new Independent Power Projects started after the Act became effective on June 3, 2010. A subsequent regulation passed stated the percentage of revenue would be 50%. The fund has several purposes, revenue sharing for one or more aboriginal groups and for assisting with First Nations Clean Energy Projects. On April 5th, 2011, Premier Christy Clark announced that from this fund there would be grants of up to $500,000 for First Nations to invest in clean energy projects and capacity development funding of up to $50,000. Keep in mind that to build a project it costs approximately $3-4 million per megawatt(MW) of power so that actual fund created would be good for just over 1 MW of power. This fund is helpful but certainly not enough to enable First Nations to build a project. What needs to be noted is the fact that the Government of BC would not share revenue from Heritage projects where the greatest revenue is generated. Finding equity for economic development projects is always a challenge so any movement from the BC Government on revenue and benefit sharing would be highly beneficial.

This conference was a very timely exploration of the challenges being faced by First Nations as they struggle to balance traditional economies with contemporary ones and to ensure a way of life that allows members to exercise their rights. It is so important for First Nations to do it right and during the conferences, members of the Metlakatla and Lax Kwa’alaams First Nations stood up their chiefs Harold Leighton and Gary Reece and thanked them for everything they had done to make their lives better. They talked of how these men had dedicated their lives to the best interests of the members and how proud they were of them. This was very empowering and it was only the second time I had ever seen people stand up their chiefs that way and thank them. This is so much a part of what we do and we do not do it often enough. This was such a validation on how business can be done in a good way with the support of the people. Times are changing!

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