Lesson 2: Roles of Leadership and Government MODULE 1

Lesson 2: Roles of Leadership and Government

M O D U L E 1

I n t r o d u c t i o n t o E c o n o m i c D e v e l o p m e n t P r o g r a m Ⓒ SEDA

M O D U L E I L E S S O N 2 P a g e 2 | 35

INDEX

2.1 Role of Governance and Leadership 3

2.2 Canada’s system of Government 6

2.3 Saskatchewan’s Municipal System 9

2.4 Saskatchewan First Nations 12

2.5 Métis Nation 17

2.6 Municipal and First Nations Administration 20

2.7 Interjurisdictional Cooperation 21

2.8 Pathway to Municipal – First Nation Cooperation 26

2.9 Benefits(ROI) of Economic Development 32

2.10 Policy Tool: Role of Incentives 33



2.1 The Role of Governance and Leadership Proactive leadership is the cornerstone of economic development.

Leadership can come from many places within the community, however,

elected leaders are particularly well-positioned to take on this role. The

political influence of elected leadership is critical to helping communities stay

the course toward a vibrant economic future. From the design and

coordination of public policies to showing appreciation for local business,

Mayors, Chiefs and council members have opportunities every day to effect

change and promote a strategic vision of economic growth for their

community.

Good leadership is critical in economic development, a field where long

periods can go by when it seems as though little or nothing is being gained.

Communities often experience a multitude of "ups and downs"; through this

all, the economic developer plays a key role as a steady, driving force.

Imperatives for Today’s Elected Leaders While all six of the imperatives outlined below are important, leadership and

partnerships are essential in 21st century economic development whereby

local governance plays a pivotal role.

1. The Leadership Imperative If leadership to set a long-term vision for a community or to see projects

through to fruition does not exist, economic development success will likely

not be realized. In addition to having a forward thinking and committed

council, the ability for community champions to see potential projects

through to completion should not be discounted. Sometimes the momentum

needed for economic development does not come from staff or local leaders

but from the thought and vision of community volunteers. Every effort

should be made to utilize community champions.

2. The Partnership Imperative Partnerships have the potential to achieve economic development outcomes

that would otherwise be unattainable. Partnerships can be important for

many reasons: to leverage resources; to avoid duplication; to build

credibility; to generate revenue; to establish contacts; to create synergies; to

“keep the pulse” of the community and industry trends; and to enable and

strengthen the work of an economic development organization. Partnerships

are the vehicles of community-based innovation and local governments have

to take a lead role in organizing and convening partnership processes. It is

important to continually assess where mutually beneficial partnerships can

be realized for the delivery of successful economic development outcomes.



3. The Place Imperative Place matters. In a global age as space becomes less important place

becomes more important and, as a result, place-based development is

central to the current discourse on economic vitality and renewal. People are

seeking out places with defining and unique qualities that set them apart

from other localities and communities. They need to focus on being and

doing what they want to attract. Economic development approaches need

to focus on identifying and growing local assets and tapping into and taking

advantage of the unique aspects of a region.

4. The Innovation Imperative A supportive and conducive local business environment and a rich network

of institutional and organizational programs and policies, provide the

platform for entrepreneurship and innovation to flourish. While this is an

area where a coordinated, integrated and multi-level governance approach

is required, local governments are best positioned at the local level to engage

the community, enable individuals, and connect people and information that

exist in the wider arena. Strong regions, livable communities and

collaborative “joined-up” governance facilitate regional innovation.

Local governments can contribute by ensuring that innovation remains at the

centre of local discourse on economic development, reassessing the region

to ensure that current and potential sources of innovation are identified,

accelerating and expanding innovation networks, and ensuring that regional

innovation takes centre stage in the development of economic development

plans.

5. The Sustainability Imperative It is no longer realistic to think of sustainable development and economic

development as mutually exclusive. For economic development to be

successful, it needs to be sustainable.

Careful consideration should be given to balancing economic, social and

environmental objectives to achieve improved quality of life and sustainable

growth. Sustainability cuts across and influences all aspects of local

government, from sustainable procurement policies to the utilization of

green building technologies, land use and climate change policies.

Local governments that are able to nurture a culture of sustainability and

create a vision for sustainable economic development are defining

themselves as the leaders of tomorrow. Sustainable communities are able to

attract people because they create a positive image of a place to live and

conduct business and it is important for local governments to recognize this



connection and, where possible, incorporate sustainability into their

economic development approach.

6. The Capacity Imperative Local leaders often struggle with capacity constraints and should assess if the

resources to achieve the economic development outcomes that they set for

themselves are in place. It is recognized that it is not realistic or appropriate

for many communities to launch a largescale economic development effort.

For some communities, having a part-time EDO or Administrator working on

economic development will be adequate to achieve their desired economic

development outcome.

The important consideration is to ensure that the amount of resources

available matches the scale of effort envisioned, otherwise it is likely that

implementation challenges will arise. Equally important is building expertise

among staff and council through training and information dissemination and

embarking on a dialogue about the delivery model needed to achieve the

desired outcomes.



2.2 Canada’s System of Government Canada’s different levels of government are major drivers of the country’s

economic engine. Often, there is a need to work with policymakers on issues

impacting the community, either as an advisor or collaborator, or as an advocate,

lobbying to bring about change in order to better serve the communities where

we live and work. Understanding how the Canadian governments work creates

more effective economic development practitioners.

Canada’s system of government has five components - federal, provincial,

territorial, municipal and First Nations. Each level has responsibilities and

capabilities. The provincial and federal governments work together in a federalist

relationship. Federalism allows provinces to adopt policies tailored to their own

populations, and gives provinces the flexibility to experiment with new ideas and

policies.

A federal system reconciles a desire for overall unity with a desire for regional

autonomy. 1 A country with a federal system has independent national and

regional governments, each operating, theoretically at least, in its own discrete

jurisdictional area.2 Political power is shared by two orders of government: the

federal government on the one hand, and provincial governments on the other.

Distribution of Powers Within their defined spheres of jurisdiction, the federal and provincial

governments are equal: there is no superior-subordinate relationship. This is

called the principle of subsidiary, meaning that the government closest to the

issue governs it. In this way, the federal government takes responsibility for

matters of national and international concern and the provincial government acts

on interests of a provincial nature. The distinct functions of the provincial

legislatures and of the Parliament of Canada were established in the British North

America Act, which was later renamed the Constitution Act, 1867 and then the

Constitution Act 1982. The federal and provincial governments have their powers

set out in the Constitution.

Aboriginal rights – including right to land, self-determination and culture - are

inherent. The Canadian government recognized Aboriginal and treaty rights of

First Nations, Métis and Inuit peoples of Canada in the 1982 Constitution. Today,

the Government of Canada is embracing a ‘nation-to-nation’ relationship

between Canada and its Indigenous peoples.

1 Van Loon, Richard J., Michael S. Whittington (1987) The Canadian Political System: Environment, Structure and Process, 4th ed. Toronto; McGraw-Hill Ryerson. 2 A. Forsey, Eugene (2003) How Canadians Govern Themselves, 5th ed. (Library of Parliament: Ottawa, 2003).



For comparative purposes, the following chart illustrates the various responsibilities of

all levels of government:3

GOVERNMENT ELECTED OFFICIALS

EXAMPLE OF RESPONSIBILITIES

Federal

Members of Parliament (MPs)

Foreign affairs (treaties) and Trade

Unemployment insurance and old age pensions

Any form of taxation

Postal Service

National Defence & Militia

Matters related to the seas and Great Lakes

Navigation and shipping

Banking and currency

Weights, measures, copyrights, patents

Citizenship

Interprovincial trade and commerce, communications & transportation

Radio and Telecommunication

Food Safety

Policing, Criminal law & penitentiaries

Peace and order

Naturalization

Aboriginal Affairs & First Nations

Residual power

Immigration (shared)

Agriculture (shared)

Environment (shared)

Provincial and Territorial

Members of the Legislative Assembly (MLAs) OR Members of the National Assembly (MNAs) OR Members of the Provincial Parliament (MPPs) OR Members of the House of Assembly (MHAs)

Anything local or private in nature

Direct Taxation within the Province

Crown lands and natural resources

Hospitals (health care)

Municipalities

Cooperatives and savings banks

Property and civil rights

Provincial Court

Intra-provincial transportation (Highways) and business

Education

Welfare

Environmental Services

Energy Production

Hunting and Fishing

3 Constitution Act, 1982; Saskatchewan Municipalities Act



Administration of justice

Policing (Ontario, Quebec)

Property and Civil Rights

Immigration (shared)

Agriculture (shared)

Environment (shared)

Municipal (local) Mayor or Reeve Councillors or Aldermen

Social and Community Health

Recycling Programs

Transportation and Utilities

Snow Removal

Policing

Firefighting

Emergency Services

Local land use

Libraries and recreation

First Nations (varies by community)

Chief Councillors or Headmen

Education

Health

Child and Family Services

Economic development

Elders and Culture

Housing

Justice

Welfare

Natural resource and land management on reserve

Water and sewage

Sports and recreation

Firefighting

Government’s role as law and policy maker Governance equates to decision-making, a central element of all governments. Decisions made often directly or indirectly impact the efforts and strategies of a community. Thus, government plays an important and instrumental role in the economic success and wellbeing of the local community. Economic development practitioners need to be aware of government’s aims and goals and be prepared to work with government on issues of interest.

The decision making functions most commonly attributed to Parliament or to the Legislative Assembly are bringing about good governance through its:

Legislative Role

Legislate - formulate and pass laws

Ensure each piece of legislation introduced in the Assembly is given effective consideration

Policy Role

Set government direction



Institute policies and processes that facilitate the government agenda

Financial Role

Government puts forward a budget to support programs and services

Grievance before supply

Inquiry Role - typically the Opposition

Representing the people by voicing their views and protecting individual rights

Holding the government accountable

Making laws

2.3 Saskatchewan’s Municipal System The first legislation specifying the powers of rural municipalities, towns, villages and cities in

Saskatchewan was passed in 1909. Today municipalities are legislated under provincial

statutes specific to their type. In Saskatchewan, there are three statutes:

The Cities Act

The Municipalities Act

The Northern Municipalities Act

Saskatchewan currently has 781 urban, rural and northern municipalities.

The three Acts outline three types of municipalities: urban, rural and the Northern

Administration District.

Urban Municipalities

In Saskatchewan, cities, towns, villages and resort villages are all defined as urban

municipalities. These municipalities are created by a ministerial order that describes the

municipal boundaries of that municipality. Each is then governed by an elected council with

Mayor that can hire staff to manage daily administration and maintain municipal services

(e.g. roads, utilities, recreation facilities).

Municipal government’s councils pass laws called “by-laws” that affect only the local

community. The type of bylaws a municipal council has the power to adopt is those that:

provide for the health and safety of the municipality's residents

decide what type and level of municipal services will be provided

control land development and zoning provisions

borrow money for municipal improvements, and

set local tax policies and rates to cover the costs of municipal services

Currently, there are 461 urban municipalities in Saskatchewan. These include:

16 cities – City’s minimum population required is 5000

146 towns –Town’s minimum population required is 500

259 villages - Northern Villages minimum population is 250 people and Villages is 100

40 resort villages



Note that while many of the aforementioned are considered urban, in Saskatchewan, only

cities are governed by The Cities Act, while the remaining urban municipalities are governed

by The Municipalities Act.

Rural Municipalities

Rural municipalities (RMs) are incorporated regions containing municipal boundaries and

divisions created by order of the Municipal Government. In southern Saskatchewan there

are 296 RMs, though this excludes official cities, towns, villages, and First Nations reserves

but may include hamlets or more formal entities called “organized hamlets.” (Saskatchewan

has 151 organized hamlets). An organized hamlet is an unincorporated community with at

least five occupied dwellings situated on separate lots and at least 10 separate lots.

Councils for rural municipalities consist of a reeve (elected at large) and one councillor for

each division within a rural municipality. Elections for reeves and councillors for odd-

numbered divisions are held in even-numbered years. For even-numbered divisions the

elections are held in odd-numbered years. Terms of office are 2 years commencing at the

first meeting of council held after the election.

The elected council is the governing body of the municipality. Any action by a municipality is

done through the council. Council makes decisions or exercises its power through the passage

of bylaws and resolutions. Municipal councillors have the role of policy maker and must work

with other council members to set the overall direction of the municipality.

Northern Administration District

The Northern Administration District (NAD) includes approximately half of Saskatchewan’s

land area, but less than four per cent of the province's population.

A northern municipality is a northern town, northern village or northern hamlet incorporated

under The Northern Municipalities Act. These municipalities are located in the Northern

Saskatchewan Administration District. A northern municipality is created by a ministerial

order that describes the municipal boundaries. Each is governed by an elected council that

can hire staff to manage daily administration and maintain municipal services (e.g. roads,

utilities, recreation facilities). Northern settlements are created under the same legislation;

but each is governed by elected local advisory committee that reports to the Minister of

Government Relations. The advisory committee provides for the health and safety of the

municipality's residents by:

• deciding what type and level of municipal services will be provided, • controlling land development and zoning provisions, • borrowing money for municipal improvements, and • setting local tax policies and rates to cover the costs of municipal services.

In northern Saskatchewan, there are 24 incorporated municipalities:

• 2 northern towns;

• 11 northern villages; and



• 11 northern hamlets.

Unincorporated areas of Northern Saskatchewan are part of the Northern Saskatchewan

Administration District (NSAD) and are administered by the Northern Municipal Services

branch. There are 11 northern settlements within the NSAD.

Current Municipal Challenges Today Saskatchewan municipalities face many challenges that are impacting their ability to

respond to the needs of their community. Businesses are frustrated by the lack of consistency

between municipalities especially as many businesses do business in more than one

community. Every municipality offers a varying degree of service and programs and

unfortunately, there is no consistency in those services and their delivery. Furthermore,

provincial and federal governments are providing less funding to municipalities while

infrastructure costs for all these communities such as highways, water, sewer, and general

repairs, are continuing to increase, putting more pressure on the tax base and local

administrators. Local governments are also not equipped to deal with complex problems that

they are now confronted with. The local economy has changed significantly due to

globalization resulting in more competition for local businesses. Community members also

expect more sophisticated service offerings from their governments.

In recent years, federal and provincial government have focused on the size of municipal

governments in Canada. For example, Saskatchewan has 781 municipalities which represent

a significant number of elected officials and administrations, thus creating the view that

municipal government is inefficient. Finally, senior governments are frustrated by conflicting

rules between municipalities; rules that may hinder economic development activities in a

province.

Role of Municipal Governments in Economic Development

Municipal government’s role and influence over economic development is significant. Key

tools that the municipality has are its responsibility for property taxes, fees on business, and

zoning bylaws, all of which have a major impact on business activity in their community.

In the last decade, community planning has become a common function of municipal

governments, largely focused on encouraging business development locally and across

regions. This too has become an important tool and is leading municipalities to become

proactively involved in promoting economic development as their communities respond to

growing global competition.

Through the built environment, municipalities can achieve economic development outcomes

that:

yield long-term community benefits such as good air, water and soil quality,

inviting public spaces, population densities that support local businesses, and

effective use of land, buildings and infrastructure



contribute to strengthening economies so that they can better withstand global

economic shifts and events that are beyond local control

facilitate municipal “destination” and “place of choice” goals

To support municipalities, a number of provincial planning and financial tools are available

to help plan, design, direct and manage the built environment in ways that are socially,

culturally, environmentally and economically beneficial for future generations.

2.4 Saskatchewan First Nations There are 74 First Nations in Saskatchewan, and each is considered ultimately independent.

However there has always been wider collaboration, and much of it today is formalized.

Saskatchewan First Nations are organized in the following way:

74 First Nations with a Chief and band council

10 tribal councils made up of bands which join together to provide advisory

and/or program services to member bands.

Federation of Sovereign Indian Nations (FSIN) protects Treaties and Treaty

Rights and fosters progress in economic, educational and social endeavours.

The First Nations of Saskatchewan include: Nêhiyawak (Plains Cree), Nahkawininiwak

(Saulteaux), Nakota (Assiniboine), Dakota and Lakota (Sioux), and Denesuline

(Dene/Chipewyan). Treaties 2, 4, 5, 6, 8, and 10 cover the Province of Saskatchewan.

Student Video Assignment: Treaties by Office of the Treaty Commissioner

https://www.youtube.com/watch?v=VhwZQdaPdo0



Treaty This section is adapted from: Saskatchewan Office of the Treaty Commissioner.

We are all treaty people. Present day First Nation treaty entitlement as well as land and

natural resource legislation play a role in local and regional economic development.

Treaty is a negotiated, written agreement which defines the rights and responsibilities for all

parties involved. Issues resolved in treaties include: land ownership, governance structures,

wildlife and environment management, financial benefits and taxation rights.

More generally, agreements have often tried to capture the spiritual, philosophical and

cultural views of the Aboriginal communities involved. Eleven historical treaties were signed

from 1871-1921 covering much of Canada, except British Columbia, Québec, Newfoundland

and Labrador. In Saskatchewan, the federal Crown and First Nations signed Numbered

Treaties (2, 4, 5, 6, 8 and 10) between 1871 and 1906; a key aspect of these Treaties is the

allocation of reserve land to First Nations people.

Treaty Land Entitlements (TLE) in Saskatchewan This section is adapted from: Government of Saskatchewan Treaty Land Entitlement in

Saskatchewan, Regina SK.

When signing the treaties in Saskatchewan, the Federal government agreed to establish

reserves based on the First Nation’s population at the time of original survey. This did not

happen in all cases, which left the federal government with outstanding obligations.

In the 1930s, the Federal government recognized that it had outstanding obligations to First

Nations. As a result, when Saskatchewan and the Federal government signed the Natural

Resources Transfer Agreement, 1930 which transferred remaining Crown lands, along with

mineral and resource rights to Saskatchewan, the Province also agreed, among other

conditions, to make unoccupied Crown land available to fulfill outstanding Treaty land

obligations. As a result, Saskatchewan is legally obligated to help Canada fulfill TLE’s under

this Agreement.

Fulfilling the obligations was a slow process and by the 1970s, the amount of available

unoccupied Crown land was not sufficient and/or in the right location to settle all outstanding

land claims, so another solution was developed. After years of discussion and negotiation,

the Governments of Canada and Saskatchewan and the Chiefs of 25 entitlement First Nations

signed the Saskatchewan Treaty Land Entitlement Framework Agreement (1992). The

Agreement establishes a framework for resolving outstanding obligations and ensures First

Nations receive the amount of reserve land to which they are entitled. In particular,

Saskatchewan agreed to offer Crown land for sale and to contribute financially to settle

outstanding TLE claims. The "Saskatchewan Formula", provided 946,532 acres for fifteen (15)

Bands.

Each party in the TLE process has its own unique set of responsibilities including:

the entitlement First Nation’s responsibility to select and purchase land;



Saskatchewan’s role to make Crown land available for sale and evaluate lands

selected by the First Nations for provincial interests; and

the federal government’s procedures to transfer the land to reserve.

Entitlement First Nations receive monetary compensation, which enables them to acquire

their respective “shortfall acres,” which means each First Nation must acquire and transfer

to reserve status the amount of land that should have been received at the date of first

survey.

Once a First Nation acquires its shortfall acres, it may use the remaining funds to acquire

additional reserve land up to its calculated “equity acres”, the maximum number of acres

that the First Nation is entitled to have transferred to reserve status through its settlement

agreement, to enhance community and economic development.

TLEs deal with a variety of matters that affect provincial interests, like land and mineral

acquisitions, water and roadway matters, and the resolution of third-party and utility

interests. TLE agreements ensure that provincial interests are protected. One example is that

land purchased under TLE agreements must be on a “willing seller, willing buyer” basis for

both private and Crown land.

The Saskatchewan government and the Provincial Treaty Land Entitlement Review

Committee coordinate and implement Saskatchewan’s responsibilities under the TLE

agreements. The Committee, which includes representatives from numerous provincial

departments and Crown corporations, works with federal, provincial, municipal, and First

Nations officials to ensure provincial commitments are fulfilled.

The Saskatchewan government coordinates provincial reviews of the Crown lands and

minerals requested by entitlement First Nations and of lands already purchased to identify

third-party and Provincial interests that must be satisfied before the lands attain reserve

status. Under the TLE agreements, tax loss compensation is also cost shared by the federal

and provincial governments when land in a rural municipality attains reserve status.

Compensation payments are made to both the Rural Municipal Tax Loss Compensation Fund

and the School Division Tax Loss Compensation Fund to compensate for the loss of tax base.

If a First Nation purchases land in an urban centre, it must negotiate a service agreement

with the affected municipality on tax loss compensation, by-law compatibility and dispute

resolution prior to reserve creation. The First Nation must also negotiate an agreement with

any affected school division. In Saskatoon, the office of the Federation of Sovereign First

Nations in Sutherland has been granted reserve status along with a number of other locations

in Saskatoon.



Positive outcomes of the TLE include:

• strengthening local land markets through increased demand for saleable land;

• providing First Nations with entitlement money that can be used for community

and economic development, which has positive outcomes for the rest of the

Province;

• contributing to the creation of new employment opportunities for First Nations

people and other Saskatchewan residents;

• strengthening the economy when entitlement money re-enters the economy of

Saskatchewan; and

• creating new intergovernmental partnerships with rural and urban municipalities.

Today 33 of 74 Saskatchewan bands have agreements.

First Nations Land Management Act (FNLMA) First Nations may choose to opt out of 34 land-related sections of the Indian Act and develop

their own land codes in order to govern reserve lands and resources—and take advantage of

economic development opportunities. This option is made possible through the First Nations

Land Management Regime, which transfers administration of land to a participating First

Nation. This includes the authority to enact laws with respect to land, the environment, and

most resources.

The FNLMA is a governance arrangement that removes participating First Nations from the

land-related provisions of the Indian Act. Specifically, the regime provides First Nations with

community-level jurisdiction over the management and administration of reserve lands and

resources, short of full self-governing powers. Participating First Nations have the authority

to pass laws for the development, protection, use and possession of their lands, and to issue

leases and licences and to regulate other interests in their land.

Importantly, although title to land continues to be vested in the Crown under the FNLMA,

ministerial involvement over land management decisions on reserves is greatly reduced.

Thus, while unable to sell land to third parties, participating First Nations are able to lease

and develop their lands and resources in accordance to their own direction.

In Saskatchewan, Whitecap, Muskoday, Kinistin, Muskeg Lake, Kahkewistahaw and Flying

Dust are managing and developing their land as they see fit under FNLMA. The One Arrow,

Yellow Quill, George Gordon, English River, Mistawasis First Nations are currently in the

process of doing the same.

First Nations Oil and Gas and Moneys Management Act Under the Indian Act, First Nations communities have to go through the Government of

Canada to get permission to use their own money and finalize business contracts related to

oil and gas reserves. Royalties had to be paid to the federal government, which would

redistribute them to the community weeks or months later, sometimes with orders on where

the funds should go.



The First Nations Oil and Gas and Moneys Management Act (FNOGMMA) is federal

legislation that provides First Nations with the option to manage their on-reserve oil and gas

resources currently managed on their behalf by Canada. The band has to prove its finances

are sound and design a financial code that details how the funds will be managed.

Role of First Nations Economic Development Saskatchewan’s First Nations have become strong economic players in the economy. It was

recently estimated that they generate over $2 billion in combined First Nations income, as

well as millions in remittances to municipal, provincial and federal governments through such

sources as:

• Personal income taxes

• SIGA casino profits

• Urban Reserve and fee-for-service initiatives

First Nations are also becoming major players in the resource sector. More than half of all

oil production from First Nation lands in Canada was located in Saskatchewan. Onion Lake

First Nation is now Canada’s largest oil and gas producing First Nation. In addition, many of

the Bands are located in Northern Saskatchewan where there are significant opportunities in

mining, forestry and tourism.

Finally, First Nations youth represent a large future labour pool. Significant effort is being

made to increase their education level with inclusion in training opportunities. Some

companies, such as Cameco are making inroads into developing relationships with local

Aboriginal communities to increase educational opportunities and build a skilled and future

focussed workforce.



2.5 The Métis The Métis community can be defined as those people who identify as Métis,

who are of historic Métis ancestry, and are accepted by the historic Métis

community in North America.

The unique characteristic of the Métis population is its scattered distribution

shaped by historical factors. The ethnogenesis of the Métis people occurred

along the fur trade routes between the Great Lakes and the Rocky

Mountains. Some of the early fur trade communities such as Ile-a-la Crosse

in Saskatchewan remain predominantly Métis to this day.

The largest concentration of Métis in the 19th century was the Red River

Settlement in Manitoba, where they constituted approximately 85% of the

population of 11,000 in 1870. A Métis Provisional Government negotiated

the entry of that territory into Confederation as the Province of Manitoba. In

the subsequent decade there was a large dispersion of the Red River Métis

population to the west and north, particularly to the Saskatchewan Valley

where there were existing Métis settlements. The military defeat of the

Métis in the Northwest Resistance of 1885 led to another major dispersion

of the Métis to points further west and north including the Peace and upper

Mackenzie valleys. The result has been a population scattered across a wide

swath of west-central North America.

The Métis National Council defines the historical Métis homeland as

encompassing the three Prairie Provinces and extending into Ontario, BC, the

Northwest Territories, and the United States. The historical background of

the Métis—their high degree of mobility within the fur trade economy and

their displacement and dispersion onto marginal lands in the wake of failed

federal land grant and scrip policies—has contributed to the distribution of

the Métis population today. The Métis are the only Aboriginal people without

a land base, with the exception of the Métis Settlements in northern Alberta.



Population Distribution According to the 2006 Census, almost 400,000 people reported they were

Métis, with 90% located in the western provinces and Ontario (Statistics

Canada). The Métis are generally younger than non-Aboriginal people (25%

of the Métis population was age 14 and younger compared to 17% in the

non-Aboriginal population. The proportion is highest in Saskatchewan,

where children made up 29% of the Métis population.

Almost 70% of Métis live in urban centres. Of all census metropolitan areas,

the largest Métis population is in Winnipeg (40,980), followed by Edmonton

(27,740), Vancouver (15,075), Calgary (14,770) and Saskatoon (9,610). Urban

Métis are twice as likely as urban non-Aboriginal people to live in smaller

urban centres (41% of urban Métis lived in cities with a population of less

than 100,000).

The Métis Nation governance model is based on a broad political community

rather than a local territorial community. This can be seen as an alternative

approach to community economic development. It is by organizing as a

political community and adopting a dispersed service delivery infrastructure

that responds to their governance and accountability system that Métis

provincial organizations are able to address the varying needs, circumstance

and aspirations of their members.

Urban centres offer developed economic infrastructure and labor markets

with related opportunities, but pose a challenge in the lack of social supports.

Métis provincial organizations have concentrated on building social

infrastructure in support of their urban population through social housing, in

particular for vulnerable groups such as seniors. Rent-to-own programs and

Métis family and child services are also core programs. They have also

concentrated on assisting members take advantage of existing opportunities

for individual mobility through training and employment programs as well as

small business financing and advisory services.

Rural and remote areas present a different set of opportunities and

challenges. The Métis represent a much larger proportion of specific

communities’ in Saskatchewan and are living on thinly populated areas of

traditional Métis territory where Métis land rights and Powley harvesting

rights can be asserted. In the past, these Métis communities lacked effective

participation in resource development projects occurring nearby. However,

this is changing as new resource development is being undertaken. The Duty

to Consult and Accommodate and related employment and procurement

opportunities have the potential to further improve participation.



Current First Nations and Métis Challenges The greatest current barrier to full Aboriginal economic participation in the

provincial economy is the gap in educational achievement. Nearly 50% of

First Nations, and 34% of Métis in Saskatchewan above the age of 15 have no

high school diploma. By comparison, the percentage of non-Aboriginal

people with no high school diploma is 21%. The education gap between non-

Aboriginal and Aboriginal groups in general, and First Nations in particular, is

wide.This has had a significant and detrimental impact on Aboriginal

incomes.

Access to financing is also often identified as a barrier to economic growth in

First Nation communities, where restrictions imposed by the Indian Act and

the nature of reserve land preclude the use of community-owned land or

infrastructure as assets or collateral useful for securing loans.

Finally, access to “mainstream” business networks and associations is

important to developing new opportunities and partnerships, and accessing

new customers and markets. Aboriginal business owners and managers must

make more effort to network with mainstream associations, while

mainstream associations need to improve efforts to become more relevant

and welcoming to Aboriginal businesses, including targeted services/events

for Métis and First Nations business and economic development

corporations.

The major challenge faced by Métis communities has been their limited

capacity to engage with industry on major projects, the main engine of

regional economic growth. This is the result of an underdeveloped

commercial infrastructure as well as shortcomings in provincial and federal

government policies. The Duty to Consult has been inconsistent in

application, with large corporations sometimes not feeling the need to

consult, not knowing who to consult, and in cases where they do wish to

consult and accommodate, not having a partner in the Métis community with

the capacity to engage. To date, the federal government’s community

economic development programs have been almost exclusively restricted to

First Nations and Inuit communities, thereby denying Métis communities the

resources to build their capacity for planning, governance, project financing

and commercial infrastructure.

There are a growing number of best practices supporting Metis peoples to

engage in business and economic development. The capital corporations of

the MNC Governing Members on the Prairies—Saskatchewan Métis

Economic Development Corporation, Louis Riel Capital Corporation

(Manitoba) and Apeetogosan (Métis) Development Inc. (Alberta)—have



been in existence since the 1980s and make loans to Métis small business.

The Clarence Campeau Development Fund is a driving force in Saskatchewan.

They have emerged as effective, professionally-managed, arm’s length

development institutions with an impressive financial performance track

record.

2.6 Municipal and First Nations Administration Municipal First Nations

Finances Municipalities require revenue in order to provide services, programs and infrastructure for their community. Municipalities raise revenue from five main sources:

Charging all people who own land, houses and businesses property taxes

Charging user fees for services like water, electricity, refuse removal, use of municipal facilities

Issuance of various licenses

Funding transfers from national government (conditional grants)

Land sales

Other fundraising efforts

In Saskatchewan, legislation does not allow municipalities to have direct access to other major revenue sources such as income taxes, sales tax, or fuel taxes.

First Nations derive most of their operating

revenues from the federal government,

which has a fiduciary obligation to them.

Other, own source, revenues, can include:

Income from gaming, land leasing, Impact Benefit Agreements

Annuities derived from trusts

Earned revenues through profits derives from economic development corporations and other community-owned business ventures

Taxes

Taxation In addition to property taxes, Saskatchewan municipalities are allowed to levy the following:

- amusement tax - infrastructure charges

First Nations can derive taxes from

property taxation under the Indian Act or

First Nation Fiscal Management Act (FMA);

or through goods and services taxed under

the First Nation Goods and Services Tax Act

(FNGSTA)

Jurisdiction Cities, towns, villages and resort villages are all defined as urban municipalities. They are created by ministerial order that describes the municipal boundaries of that municipality.

The Canadian legal system has acknowledged that Aboriginal peoples were sovereign nations prior to the arrival of Europeans in North America. Aboriginal governments have the authority under existing Canadian law to exercise jurisdiction. This authority is inherent, and not delegated from a higher level of government as it is with municipalities from provinces.



2.7 Interjurisdictional Cooperation Local economic strategies that do not take into account surrounding communities dismiss

important opportunities. Rather than looking upon neighbouring communities and

organizations as separate bodies with distinct characteristics and goals, clusters of

communities can band together under common interests with similar goals. As a regional

entity which can leverage economies of scale, communities will have a greater chance of

success than individual efforts. This allows for the pooling of limited resources and the

creation of regional strengths or assets to create wealth and jobs and to attract new

investment, rather than having individual communities and organizations attempt this on

their own.

Regional collaborative may include:

Co-ordination of resources amongst various sub communities (interests,

partners, plans, resources, and efforts);

Increasing service levels and initiatives through economies of scale

Better provision of capacity building services and initiatives

Education and training delivery

Research and development services

Local initiatives and project management services (opportunity and

identification, feasibility)

Organizational development and planning services Information services Promotion and marketing services Capitalization for projects

The logic holds that there is far greater opportunity for attracting investment when majority interests are focused on specific economic objectives.

Mid Sask Municipal Alliance Fourteen rural and urban municipalities came together as the Mid Sask Planning District in

2010. They recognized that they must work cohesively and leverage their resources and

asset base to keep individual communities sustainable. The Alliance is now moving ahead

with an investment attraction strategy and development of a regional entrepreneurship

system.

We want to emphasize that, unlike many of the traditional leadership models used in the

past, interjurisdictional leadership hinges on a different set of values. Effective regional

leadership requires:

• A willingness to engage in collaboration

• Display of mutual trust among regional stakeholders

• Sharing power with regional players to ensure the success of development efforts

• A flexible and entrepreneurial approach



Entrepreneurial leaders believe in change, they innovate and create. Entrepreneurial leaders

recognize and seize opportunities. They are willing to take risks in order to implement a new

idea.

Mid Sask Municipal Alliance

The Potential for First Nation-Municipal Cooperation Partnership between Aboriginal and non-Aboriginal populations offers significant opportunities for

regions, the benefits of which include:4

• enhanced community-to-community relations

• connection of the local Aboriginal population to the community, which results in a stronger,

more unified voice on local and regional issues

• more attractive climate for investors and tourists

• access to each partner's unique strengths whether that is a workforce or physical attributes of

such as lakes and parkland,

• potential for joint projects and access to financial capabilities and alternative funding streams

• potential for sharing resources (eg: labour; equipment)

Building mutually beneficial and effective relations makes good business sense, both in the short-

term for current business needs, and in the long-term for enduring projects and activities. First Nation

and municipal communities expect businesses to engage in respectful relationships with each other.

Good relations between communities can assist with:

4 Government of Saskatchewan First Nations and Métis Relations

https://www.saskatchewan.ca/live/first-nations-citizens/first-nations-metis-and-northern-initiatives



• Regulatory approvals now require Aboriginal consultation and proactive engagement which

can potentially minimize delays and potential for legal challenges

• Improved certainty of project schedule and costs as engagement results in positive

relationships

• Corporate acceptance by the community and subsequent support for industry’s social license

to operate

• Cost reductions due to improved access to local labour force and contractors

• More informed decision making due to improved communications and reduced uncertainty

• Equal partners in regional economic development opportunities.

• Improved employment opportunities in both communities

• Improved opportunities for training and human resources development in Aboriginal

communities—a key to successful self-government

• An opportunity to take advantage of beneficial demographics (i.e., the growing Aboriginal

population and the effect that this will have on the future workforce)

• A desire to make each community more attractive to the tourism market

• Coordinated planning efforts to improve land use, land management and environmental

stewardship

• Infrastructure needs. For most First Nations, it is not economically feasible to build their own

service facilities separate from adjacent municipal communities, or vice versa

Barriers to Municipal-First Nations Partnerships

Governance

Municipal governments and First Nations fall under different jurisdictions. The First Nations’

community, by virtue of its historical relationship with the Crown, has a special relationship

directly with the federal government. Municipal governments have delegated authority through

provincial or territorial governments.

Taxation

In 1988, amendments to the Indian Act extended the taxing powers of First Nations to their

interests in conditionally surrendered or “designated” lands (i.e., reserves). This change to the

Indian Act gave First Nations broad new powers to tax interests within reserves, thereby

establishing their jurisdiction, creating economic development opportunities and providing a

basic tool for self-government.

The result is two very different tax regimes and resulting partnership challenges:

a) Government to government: Municipal governments face property tax losses when

land is converted to reserve land and thus becomes exempt from municipal taxation.

b) Business to business: On-reserve businesses do not have to charge Provincial Sales

Tax (PST) on goods and services. Some off-reserve businesses feel that this is an unfair

tax advantage as they cannot compete with lower prices that do not reflect PST,

1

2



especially for fuel and tobacco. From a First Nations’ perspective, this tax-exemption

is a right and, as such, should not be revised.

Geographic Location5

The proximity of a reserve to a municipality will often influence the relationship between First

Nations and municipal governments. For rural and remote communities, providing services can

be inconvenient for both parties. Not all reserves are adjacent to or in close proximity to a

municipality, and therefore service provision agreements and partnerships between two

communities separated by a significant distance may be more challenging. A commitment to

cooperation and regular communication by First Nation and municipal government officials is

required in order to overcome the challenge of geographic distance and location in developing

partnerships.

History6

Historical conflict and outstanding issues can cause significant distrust and misinformation with

or between communites. Establishing effective communication is the best option for communities

attempting to overcome longstanding conflict, misinformation and divisive issues. Cross-cultural

exchanges and information sessions can also help overcome outstanding issues caused by a lack

of understanding, preconceived notions or historical conflict. By gaining an appreciation of each

other’s respective values and beliefs, municipal governments and First Nations can develop

effective relationships based on mutual respect and trust, which lead to partnerships that will

benefit both communities.

Culture and Communication

In developing municipal-Aboriginal partnerships, an awareness of each other’s perspectives,

background, culture and values is important for developing relationships based on mutual

understanding, trust and respect. For example, First Nations place a strong emphasis on oral

tradition as a means of passing cultural knowledge onto future generations. Conversely, non-

Aboriginal people often rely on written documents or pictures to document knowledge or events

to be shared with others.

Differences in culture, values and beliefs can cause misunderstandings within a community. It is

important to promote information-sharing within the community to dispel myths and rumours

that may impede a potential relationship between a First Nation and municipal government.

Notably, Métis and First Nation groups have expectations of the relationships they will have with

communities and with businesses. These are straightforward strategies and consist of:

• Respect of Aboriginal History and Treaties

• Communication / Communication / Communication. Not token, rather early, consistent, 2

way dialogue

5 Building Capacity through Communication FCM 6 Ibid

3

4

5



• Aboriginal communities expect that partners will have a concern for the future of their

people and particularly Aboriginal youth in the community

• Aboriginal communities see resource development as an opportunity and want it presented

in that way but not at expense of Environment

• Aboriginal communities are looking for support for skills training and youth education

• Aboriginal business and economic development are also an important part of discussions

on the benefits the community can expect. There may be opportunities for Aboriginal

business formation to support the primary economic activity.

Jurisdictional Issues

When working on Aboriginal lands, businesses need to be aware of the multiple jurisdictions

which can be involved. For example:

Federal Government: Aboriginal Affairs and Northern Development Canada (AANDC);

Department of Human Resources and Skills Development Canada (HRSDC), Western Economic

Diversification (WD), Health Canada.

Provincial Government: Northern Affairs, Advanced Education, Employment, First Nations and

Métis Relations.

First Nations: Band, Tribal Council, Federation.

Métis: Municipal Government, Provincial Councils, Programs.

Historically First Nations had jurisdiction to govern themselves according to their own laws and

customs and tradition. Since the Indian Act was enacted in 1876, First Nations have had little

control of their own internal affairs. Band Councils had limited and delegated power of authority

to govern themselves and most decisions were made by the Minister of Aboriginal Affairs and

Northern Development Canada (AANDC).

Today, the Government of Canada recognizes the inherent right to self-government under

Section 35 of the Constitution Act. Self-government agreements set out arrangements for

Aboriginal groups to govern their internal affairs and allow for greater control and law-making

authority over a comprehensive range of jurisdictions, including governance, social and

economic development, education, health, lands and more. Canada has signed over 21 self-

government agreements across Canada.

Self-government agreement allows Aboriginal governments to work as independent bodies in

partnership with other governments and the private sector to promote economic development

and improve social conditions. Self-government agreements provide significant opportunity for

local businesses to engage in business partnerships with aboriginal communities.

A failure to understand jurisdictional boundaries can cause serious issues in the relationship with

Aboriginal groups as well as with government bodies who are focused on guiding and directing

responsible and respectful relations.

Saskatchewan bands in discussions on self-government are: Dakota Whitecap.

6



2.8 Pathway to Municipal-First Nations Cooperation We have highlighted the four recommended steps to Municipal and First Nations Cooperation’s

from the “Stronger Together” Toolkit developed by the Canadian Association of Native

Development Officers (CANDO) and Federation of Canadian Municipalities (FCM).

Student Resource:

Download the ‘Stronger Together’ Toolkit from the Assignment Section of this Lesson to use as reference for your future endeavours in economic development. We also expand on interjurisdictional partnership building in Module 4 of this series as a component of Regional Development.

Stage A: CONNECT Allow 2 to 3 months

Connect, build a stronger relationship and formally commit to the joint development process

Stage B: VISION Allow 2 to 4 months Create a shared vision for the relationship and formally commit to it via a partnership agreement such as a Friendship Accord.

Stage C: DECIDE Allow 3 to 6 months Decide on joint initiatives, develop work plans and set up a governance structure to manage implementation.

Stage D: ACT Allow 12 to 24 months Work together to implemetn the workplans, strenghten the partnership and build a stronger regional economy.



Examples of Successful Collaborations using the Stronger Together

Model7 From co-existing to joint promotion When they applied to FCM and CANDO, the Town of Témiscaming, QC, described its relationship with neighbouring Eagle Village First Nation as, “We live next door to one another yet don’t necessarily know each other – we co-exist.” Mayor Nicole Rochon and Chief Madeleine Paul met formally for the first time during the first relationship building workshop in September 2013. A year later, the partnership had grown to include Municipality of Kipawa and the neighbours had signed a Friendship Accord, celebrated National Aboriginal Day together for the first time and were working on a joint tourism promotion and marketing strategy. From crisis to opportunity Following devastating wildfires in 2011 that affected the lives and livelihoods of everyone in the region, Sawridge First Nation, Town of Slave Lake and Municipal District of Lesser Slave River received $64 million in disaster funding from the Alberta government. They formed a tri-council to jointly allocate the funding and created an Economic Development Committee with a regional Economic Development Office to manage the projects. The three communities decided to apply to the FCM/CANDO program to further develop their partnership. Since then, they have signed a Friendship Accord, developed a joint communication policy and are now developing a regional tourism strategy that includes a focus on First Nations tourism in the region. From competition to collaboration Despite a long-standing and productive government-to-government relationship, tensions were growing within the business community in City of Edmundston, NB due to perceived competition from Madawaska Maliseet First Nation’s new commercial development, the Grey Rock Power Centre. During their first joint workshop, participants addressed the issue and decided to focus on creating a regional shopping hub that would bring more businesses to both communities. The chief, mayor, councillors and staff created a vision of building a better, brighter future together, guided by the idea: “We are not dividing up a small pie into smaller pieces, but instead we are creating a bigger pie together.” This involved seeing themselves as the gateway to the Atlantic and strategizing together on how to retain, promote and attract business to the region.

7 CEDI Toolkit



Urban Reserves as a Path to Partnership

This section is adapted from the Indigenous and Northern Affairs website at www.aadnc-

aandc.gc.ca

Many First Nations in Canada are located in rural areas, far from the cities and towns

where most wealth and jobs are created. This geographic remoteness can sometimes

pose challenges for First Nations trying to increase their economic self-sufficiency. Urban

reserves are one of the most successful ways to address this problem.

An urban reserve is defined as a reserve within or adjacent to an urban centre. Urban

reserves can be found in smaller urban centres such as Portage La Prairie, Manitoba,

which has a total population of 13,000 people, or larger cities such as Saskatoon with over

300,000 residents.

Urban reserves offer residents economic opportunities that are generally unavailable in

more remote areas. They give First Nation businesses the chance to establish themselves

and provide employment and training opportunities. At the same time urban reserves can

create jobs for Aboriginal and non-Aboriginal people and contribute to the revitalization

of the host municipality. There are now more than 120 urban reserves across Canada (51

in Saskatchewan) established under the Additions to Reserve policy and Treaty Land

Entitlement agreements.

Reserve creation often stems from Canada's legal obligation to settle and implement

outstanding land claims. The majority of urban reserves are created as a result of specific

claim and Treaty Land Entitlement settlements, which provide First Nations with cash

payments that may be used to purchase land. As with any private individual or

corporation, First Nations have the right to buy land from a willing seller. Once acquired,

they also have the option of asking the federal government to transfer their land to

reserve status, whether the property is located in an urban or rural setting.

Approval of reserve status is not automatic. In order to get land designated as a reserve,

federal policies require that a step-by-step approach be taken to address the concerns of

everyone involved, including municipalities and environmental authorities. The

Department's Additions to Reserves/New Reserves Policy requires environmental site

assessments prior to any land acquisition by the federal government. This serves to

protect both Canada and First Nations from adverse impacts.

Land can be declared an urban reserve provided that a number of agreements have been

negotiated between individual First Nations and the municipality. A municipal servicing

agreement is particularly important because it provides a fee for services such as water,

garbage collection, police and fire protection, an amount which is generally equal to the

amount the municipality would have collected through property taxes. Education tax loss



and service agreements with affected school divisions must also be negotiated by the First

Nation, including a mechanism for settling disputes.

The same sales tax exemptions that apply to reserves in rural areas also apply to urban

reserves. Under current tax law, First Nations businesses located on reserve are required

to collect provincial and federal sales tax and are subject to all the applicable taxes

outlined by law or the servicing agreement negotiated with the municipality. Only

registered Status Indians can take advantage of the sales tax exemption when purchasing

goods and services on reserve land. The net effect for those individuals is having slightly

more money to spend in the local economy.

Economic Benefits

Urban reserves are viewed as a stepping stone for the development of new Aboriginal

businesses and a way into the mainstream job market for First Nation people. However,

they can also provide much-needed economic stimulus to urban centers as a whole.

Muskeg Lake Cree Nation's Cattail Centre and Asimakaniseekan Askiy is a good example

of this. Located on the east side of Saskatoon, Saskatchewan, Asimakaniseekan Askiy was

the first Canadian reserve to be built on land previously set aside for city development.

Established in 1988, it breathed new life into a part of the City of Saskatoon that had once

been home to an active railway. Now home to dozens of Aboriginal and non-Aboriginal

businesses, Asimakaniseekan Askiy has become a vibrant commercial hub.

A smaller but no less dynamic urban reserve has been established at Wendake near

Québec City. Home to the Huron-Wendat First Nation, Wendake has become an

important tourism and cultural centre in Québec, with festivals and powwows throughout

the year. In preparation for Québec City's 400th anniversary celebrations, Wendake

opened a four star hotel in March 2008. Built in the style of a traditional Iroquois

longhouse, the hotel also functions as a museum, with video projections, artifacts and

collections on display. The cultural site as a whole has generated 300 full and part-time

jobs for members of the community and a place for local artisans to sell their crafts.

Improving the social and economic circumstances of First Nation people is a major priority

for the Government of Canada. By offering First Nations economic opportunities that are

unavailable in rural areas, urban reserves serve as springboards into the mainstream

economy. They reduce operating costs and provide better access to capital markets and

transportation routes, enabling First Nations to diversify their economic base. At the same

time, they contribute to the economic and business development of urban centres across

Canada. All Canadians benefits from their success.



Early Adopters

Muskeg First Nation and City of Saskatoon Partner on Urban Reserve The Muskeg Lake Cree First Nation is located about 100 kilometres north of Saskatoon

(roughly midway between North Battleford and Prince Albert). While it is not adjacent

to the city, a relationship developed through the establishment of an urban reserve in

Saskatoon by a First Nation.

DEVELOPING THE PARTNERSHIP:

The City of Saskatoon and the Muskeg Lake Cree First Nation began negotiations in 1984

to establish an urban reserve—the first time a new reserve was established within

municipal boundaries in Canada—under INAC’s TLE process. The urban reserve was aimed

at furthering economic development for the Muskeg Lake Cree First Nation.

In 1993, the city and the First Nation signed a service agreement for the urban reserve.

Under this agreement, Saskatoon provides garbage pickup, water, sewer, and fire

protection. The Muskeg Lake Cree First Nation collects property taxes on the urban

reserve to pay for these services—an amount equivalent to what the city would have

received if land had remained under its jurisdiction.

The growing Aboriginal population in the city and its effect on the future workforce led

the partners to a number of employment initiatives: the “Yes, We Can” program

recognizes young Aboriginal entrepreneurs; the Employer Circle provides cultural

sensitivity training for employers and matches Aboriginal candidates to positions; and

there is participation in the Saskatoon and Area Chamber of Commerce.

SUCCESS

The land that designated as urban reserve has evolved from what was once vacant land

into a thriving business area. Muskeg Lake Cree First Nation has diversified its economy

and now manages assets of close to $17 million, including $2 million in infrastructure,

such as water, sewer and roads, and $15 million in buildings leased for office space in

the industrial park. The people of Saskatoon and the wider business community have

accepted the urban reserve because it is understood that fees for municipal services

equivalent to the property tax the city would have received if land remained under

municipal jurisdiction are being paid. The First Nation community also is supportive of

the partnership. Band members receive regular information about the partnership at

Case Study



band meetings and an annual meeting is held between the leadership of the First Nation

and the city.

CHALLENGES

Establishing an urban reserve is a complex process. Some difficulties arose from a lack

of information on INAC’s TLE policy, especially on how it affected the city. The First

Nation’s direct approach in the negotiations helped overcome these early difficulties.

Saskatoon’s main concern was to maintain a level playing field in taxation, where tax in

the area would be harmonized to reflect competitive retail prices on- and off-reserve.

Local businesses off reserve were concerned that the tax-exempt status of businesses

on-reserve would give them an unfair advantage, and draw business away with lower

retail prices (especially for tobacco and fuel), since they did not have to charge

Provincial Sales Tax (PST). Off-reserve businesses preferred that on-reserve businesses

charge the same prices and keep the money equivalent to the PST for their community.

FUTURE

The city and the First Nation continue to identify and develop other business

opportunities, which will result in more employment and training opportunities for

Muskeg Lake Cree First Nation members and residents of Saskatoon. Both parties are

discussing the development of additional urban reserves in Saskatoon in aid of these

goals.

LESSONS LEARNED

The partners advise municipal governments wishing to initiate similar relationships with

First Nations and establish an urban reserve to proceed only if there is political will on

both sides. People who are willing to take the risks need to be identified. The key is to

connect often to avoid municipal governments and First Nations operating in isolation

from each other. First Nations need to come to the table knowing their own assets and

with a vision of what they want from the partnership.



2.9 Benefits of Economic Development As active citizens and community leaders, we can directly shape our local and regional

economies. Economic development is an essential part of establishing added tax revenue

through business and industry development. It also enables communities to increase

quality of life infrastructure through increased revenues.

Yet many communities do not have an economic development function. They are quick

to eliminate this department when economic times are in a downturn. Conversely, many

leaders that are prospering in good economic times do not bother with an economic

development department. They believe they do not need one.

This thinking is comparable to not bothering with an emergency services department

because the community hasn’t had a fire in a couple years. Economic development, like

emergency preparedness, is a planning process. The planning will differ based on the

group’s goals and priorities. It is necessary to develop a plan of action for any event that

may arise. Having the necessary infrastructure and personnel to be able to act in a

proactive manner will help to solve problems head on.

An important role of economic development is to anticipate the needs of a community

and protect it from dependency on conditions which will and do change. There is

always an ‘opportunity’ for community leaders because as the Greek philosopher

Heraclitus said….’change is the only constant’.

Economic development is a process and it fills different needs for different communities

at different times depending on the needs of the community, the resources and the

outcomes expected. Flexibility is essential to successful economic development.

In Module 2, we will discuss Economic Impact Analysis in greater detail and how to

measure a Return on Investment (ROI).

Here are a few benefits of taking a proactive stance to the future:

Increased Tax Base

Additional revenue to support, maintain, and improve local services such as roads, parks,

libraries, and other community services. We know that the cost of development is

prohibitive and that the immediate returns are not always apparent, however, over time,

communities that develop realize a return.

Job Creation and Expansion

When you have an active plan to support existing businesses to expand and grow, and

when you work to develop partnerships that bring new businesses into your region, you

help provide your community with local and regional employment opportunities.

Business Retention

Keeping local businesses in town is important—investing in a business retention and

expansion plan tailored to your community is important.



Economic Diversification

Expanding the economy increases the opportunity for long term sustainability of the

community. Creating new businesses, and making your community attractive to new

business ensures a diverse economy.

Quality of Life Knowing what your community values and working to foster and protect it is an integral part of economic development. More local tax dollars and jobs results in greater economic stability for the community, which generally increases the overall standard of living for residents.

Recognition of Local Products

Oftentimes, successful economic development will occur when locally produced goods are consumed to a greater degree in the local market. Part of an effective community development strategy involves identifying marketable, locally produced goods and creating a place where they can be sold.

Self-sufficiency and Sustainability This is the ultimate goal of economic development. Public services would be less dependent on intergovernmental transfers.

2.10 Leadership Policy Tools: Incentives The use of incentives is a controversial topic and one that has garnered the interest of

academics, the public and the business community, alike. Interestingly, each group has

dissenters and supporters.

Economic development incentives, non-financial and financial, may include a broad range

of tools, ranging from expedited planning and permitting processes to direct or indirect

funding.8 The use of financial incentives to benefit private parties, especially those that

involve the transfer of public funds to private parties, in order to create business activity

introduces risk factors associated with the inherent hazards of doing business. For this

reason, economic incentives are typically based on policy that establishes clear

parameters for their appropriate use in relation to the economic development goals of

the jurisdiction. 9

When a government or local economic development practitioner analyzes the usefulness

of an incentive, they should begin with a clearly defined evaluation process that includes

such activities and factors as: 10

• How a proposal measures up to established economic development criteria

• A cost/benefit analysis of the proposed project

• Analysis of the impact of a project on existing businesses

8 Government Finance Officers Association, Developing an Economic Development Incentive Policy (2008). 9 Ibid. 10 Ibid.

http://www.gfoa.org/developing-economic-development-incentive-policy



• An evaluation of impact on all overlapping jurisdictions

• A determination of whether the project would proceed if the incentive is not

provided

In addition, an economic development incentive should require that specific performance

standards be established. Not only will these performance standards help a jurisdiction

gauge the effectiveness of its overall economic development program, but they may also

be used to recover promised financial benefits, through clawbacks or linkage agreements,

if recipients fail to fulfill their commitments. 11

A process should also be established for regular monitoring of the economic development

incentives granted. Ongoing monitoring of these projects, should become part of an

overall economic development program. 12

Not all business incentives are the same. Used appropriately and in a tactically limited fashion with well-defined objectives, certain types of business incentives can be effective. Worthy of mention in this regard are some of the research and development tax credit programs that have fostered advances in technology development and commercialization (although the evidence on the impact of these in Canada appears to be mixed). When carefully crafted, there is a chance that government business incentives can create short term stability and provide modest assistance with transitioning an economy to areas of higher growth and increased productivity. In recent years we have witnessed a growth of incentives being offering for development of residential housing as well as ‘green” development at a local, regional and federal level. A number of Saskatchewan communities are now offering taxation incentives to businesses to refurbish their retail facades or business premises to support community beautification. First Nations arguably can incentivize business development, particularly with the growth in urban reserves.

Pros and Cons of Incentives

Dissenters voice the following concerns: • A waste of money in that there is no direct connection between the initiative and

economic development activity • Distort the optimal outcome of the free market (suboptimal outcomes) • Amount to a free giveaway to businesses; at best, well-intentioned; at worst, bribes

and kickbacks • They are inefficient (especially for small scale businesses) • Benefit businesses rather than society • Lead to unequal distribution of resources • Wrong on principle: government should not get involved in the private sector • Benefit outsiders, not the community residents themselves

11 Ibid. 12 Ibid.



• Create market inefficiencies • Create opportunities for corruption, exploitation. Adds an extra layer of cost. • One can't "pick winners" • Create ‘‘political entrepreneurs’’ who spend energies seeking government handouts • Create “corporate welfare • The market is more sophisticated and dynamic and fast moving than any government

or economic development agency can be; EXAMPLE: Silicon Valley was not created by public planners

Arguments in support of economic development incentives: • Market failures: there are some industries that are too risky and so there is a role for

public support or they would never get started. The internet is an example, since it was developed by the U.S. government for military purposes.

• Lack of information – some markets do not have the information to develop. Yet government may see some opportunity based on their knowledge and awareness. Biotechnology in agriculture is an example.

• Inequities require intervention – some industries start because society has a need. Recycling is a good example.

• Public-private partnerships are needed in a mixed social economy. • Economies "compete" like firms, so you either have to play the game or lose out.

Intervention may be required to protect local industry and economies. • As an economy becomes more technologically and organizationally complex, more

planning -- both public and private -- is required. • Sun setting industries in the final years – as industries wind down there may be a need

to support them as the economy changes. For example the tobacco industry in southern Ontario required significant support to transition.

• One-town industries – government may need to intervene in localities where there is only one industry that dominates the economy. Or intervention may be required to support that industry given the strategic significance to the area.

• Strategic trade. Other countries are developing industries under industrial policies and then competing in Canada. Thus government supported intervention is important to protecting Canadian local industry.

• Protecting Canadian jobs is “worth it”. Canada has a small economy that cannot compete against large industry in the U.S.

• Infant Industries. Some industries will not begin without government support such as Innovative or high start-up cost industries.

• Historic issues. Many industries were developed under a protectionist environment (national policy 1867) and thus new industries need the same protection/support.

Documents

Lesson 2: Roles of Leadership and Government MODULE 1