Towards a Remote Communities Investment Strategy for CanadaShaping Economic Growth in Canada’s Remote Communities

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Executive Summary 5

Emerging Opportunities 7

Abundant Optimism 8

Understanding Barriers to Success 9

What Conditions do Businesses Require 9

Availability of a Skilled Labour Force 10

Modernized Infrastructure 11

Affordable, Efficient and Reliable Energy 11

Clean and Abundant Supply of Water 12

Effective, Efficient Transportation 12

Dependable Connectivity 13

Real Estate Availability 14

Access to Health services 15

Quality Education 16

The Upside of Remote Development For All of Canada 17

Real Growth Requires Investment Not Subsidy 17

Government: A Catalyst to Enable Remote Community Growth 18

Red Tape and Overlap 18

Out of Sight Out of Mind – Visibility for Remote Communities 19

The Role for Business 20

Success Stories – It Can Be Done! 20

We’re Ready: Promising Solutions for Canada 21

Appendix 1 – Key Observations from Stakeholder Survey 22

Appendix 2 - Survey Questions 24

Appendix 3 – Roundtable Locations 26

Appendix 4 - Roundtable Participants 27

Table of contents

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Executive SummaryThe goal of GE Canada’s Remote Communities Initiative, launched in January 2011 in collaboration with the Canadian Chamber of Commerce, is to place a business lens on remote communities – the people, governance, barriers to operations, opportunities and successes – to gain insight into their role in Canada’s economic success.

The following report details the findings from cross country roundtables and an online survey with input from over 500 stakeholders. Result highlights can be found in our summary report, “Remote. Resource Rich. And Ready.”

Our research indicates that Canada has the products the world wants, has weathered the recent economic downturn better than most other countries and has a bright future – provided we make the right investments and decisions to capitalize on the opportunity.

Research undertaken by Harris Decima notes that 93 percent of those surveyed believe that remote communities will play an important role in the future of Canada’s economy. This is consistent with many policy studies and economic trends that suggest global demand for Canadian resource and agri-food products is increasing.

In our research, remote communities have been broadly defined as having one or more of the following characteristics:

•Limitedtransportationaccess(road,air,rail) •Limitedaccesstoacommercial/servicehub •Limitedinfrastructuree.g.,water,off-grid,broadband,healthcare,schools •Asingle,primaryemployer

A “can do” sentiment, heard in the roundtables, was tied to a belief in the economic promise of Canada’s resources sectors where global demand is rising and supply is limited. Participants most bullish about Canada’s opportunities understand the challenges of harnessing this potential but believe that the issues can be overcome. According to the study, 87 percent of respondents believe government’s role is to help attract business investment. While the roundtables told us that stakeholders are looking for investments - not subsidies - there is recognition that remote community infrastructure is needed.

One of the most important issues we identified is whether Canadians can shift their thinking that remote community investment is a “subsidy” for poorer regions and instead recognize that remote communities are a vital piece of Canada’s future economic prosperity. Efforts to reduce this stigma could help change Canadians’ perceptions of remote communities.

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While all communities are different there are common factors required for business investment:

•Aproductorgroupofproductsforwhichthereisamarket •Asizeableenough,properlyskilledworkforce,ortheabilitytoattractone •Safeandhealthylivingconditions •Housingandhealthcareservicestosupportqualityoflife •Educationthatmeetstheneedsoflocalbusinessandcommunityneeds

Education was a recurring conversation in our roundtables. Forty-two percent of survey respondents ranked it just below infrastructure and skilled labour on their list of most important criteria for attracting and growing business. Health services, like education, are a multi-faceted challenge. Thirty-three percent of survey respondents indicated that this was in the top three of necessary criteria for business development.

Seventy percent of survey respondents ranked infrastructure as the single most important criteria for the attraction and growth of business in remote communities, followed by the availability of a skilled local work force at 52 percent. These results were consistent across the country.

Infrastructure gaps also vary from community to community however the greatest emphasis was placed on the following factors:

•Accesstoaffordable,reliableandefficientsourcesofenergy •Reliablewirelessandbroadbandconnectivity •Affordable,efficienttransportationlinkstomovepeopleandgoods •Accesstoabundantsuppliesofwaterforhumanandindustrialneeds

One of the most important defining characteristics of stakeholder opinion was the firm view that private sector investment must drive long-term economic activity in remote communities.

Sixty-six percent of survey respondents favoured programs that included a blend of private and public investment, indicating their willingness to support a P3 model or other strategic capital investment models that will support these ideas.

Many roundtable participants stressed that remote community strategic investment plans include:

•Integratedlongtermplanninginvolvingprivateandpublicsectors(atalllevels). •Novelfundingapproaches,includingpublicprivatepartnershipsandlessredtape. •Anattitudethatseesspendingasstrategicinvestment,notassubsidization. •Newtechnologytohelpbridgeinfrastructuregapsinsuchareasasenergy,water, telecommunications, transportation, health and education.

Now is the time to look at Canada’s remote communities with a new perspective and as key contributors to our national wealth. Each of us has a role. No matter where we live in Canada, now is the time to drive forward a vision for growth in full partnership with Canada’s remote communities.

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Shaping Economic Growth in Canada’s Remote Communities

Emerging OpportunitiesThe world has discovered Canada’s potential. Driven by economic recovery in mature economies, and extraordinary growth in developing economies, Canada is well-positioned to play a critical role in the global economy. It is clear that Canada’s economic success lies in the advantage of our highly-valued natural resource based sectors, the products of which are more often located in remote areas of the country, away from our largest cities.

GE, as well as a growing number of Canadian businesses, recognize the significant potential of our remote communities, but also realize that there are significant challenges, and that we need to better understand the dynamics to make them successful.

•Energy,forestryandminingsectorsrepresent11percentor$131billionofCanadianGDPand contribute over 750,000 jobs.

•TheresourcesectorscountfornearlyhalfofallCanadiangoodsexportedin2009.Canadaisthe top destination for global mining exploration, 16 percent of world spending and account for 19 percent of Canadian good exports; generating over half of the revenues realized by Canada’s railroads in 2009.

•AsthelargestsingleprivateinvestorinCanada,theeconomicimpactoftheenergysectoralone includes500,000directandindirectCanadianjobsandover$24billionpaidtogovernmentsin 2007.

•SixhundredandfiftyCanadiancommunities,predominantlyinremoteareas,relyonforestryfor their economic well-being.

•Agri-businessincludingcropandanimalproduction,fishing,huntingandtrappingcontributesover $26billiontoourGDP.

To further understand the issues and opportunities through a business lens, in January 2011, GE in collaboration with the Canadian Chamber of Commerce, began a formal information gathering process (includinganonlinesurveyconductedbyHarrisDecima)ofbusinessstakeholdersinCanada,aswellasa series of cross-country roundtables. These findings, when combined with the considerable economic data compiled by Canada’s leading policy think tanks and industry associations, suggest that Canada is at a “tipping point” with respect to the development of our resource-based economy and explores the barriers that remote communities face, as well as the successes they have achieved.

3 Canadian Association of Petroleum Producers, 20114 Forest Products Association of Canada, Economic Impact Analysis, 20105 Statistics Canada, Gross Domestic Product at Basic Prices, by Industry, 2010

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Conversations took place with over 150 business and government representatives in roundtable discussions held in St. John’s, Halifax, Iqaluit, Montreal, Ottawa, Toronto, Edmonton, Fort McMurray, Vancouver, Yellowknife, and Whitehorse. In addition, an online survey targeting business leaders working in or contributing to remote communities was conducted. Over 350 respondents from across the country participated in the survey.

A deliberate decision was taken to define remote communities broadly, with one or more of the following characteristics:

•Limitedtransportationaccess(road,air,rail) •Limitedaccesstoacommercial/servicehub •Limitedinfrastructuree.g.,water,off-grid,broadband,healthcare,schools •Asingle,primaryemployer

Abundant OptimismSurvey research undertaken by Harris Decima reveals that 93 percent of those surveyed believe that remote communities will play an important or very important role in the future of Canada’s economy. This finding is consistent with a number of policy studies and economic trends which suggest global demand for Canadian resource and agri-food products is gathering pace

This “can do” sentiment, heard from each of the 11 roundtables across the country, was tied to a belief in the economic promise of Canada’s resources sectors in a world where demand is rising and supply is constrained or limited.

The prevailing sentiment was that Canada has the products the world wants, has great experience as global traders, has weathered the recent economic downturn better than most other countries and has a bright future– provided we make strategic investments and the right decisions to nurture our advantage and to capitalize on the opportunity.

In some cases, this optimism was also tied to recent evidence of inbound investment coming to Canada from around the world, specifically focused minerals and energy. According to the Asia Pacific Foundation,over$12billionhasbeeninvestedbyAsiancompaniesintheCanadianenergyindustryinthe past five years alone.

Those who were most bullish about Canada’s opportunities were well-informed of the challenges of harnessing this potential; however, they shared a view that a better understanding of the issues and a renewed focus on remote communities would address many of the encountered problems.

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Understanding Barriers to SuccessIt was apparent early in this initiative that there is an absence of up-to-date comprehensive business data enabling a consolidated view of the total opportunity remote communities represent. While pockets of information exist, it is difficult to scope the full range of business metrics that could influence investment decisions. There is a clear need for current data, along with mechanisms to access and share information to help inform business decisions and investments.

The comments that we heard during the roundtables are very much in line with the results of the survey.

What Conditions do Businesses Require

While all communities are different, there are common factors required for business to invest in remote communities. According to our study, these generally include the following:

•Aproductorgroupofproductsforwhichthereisamarket •Asizeableenough,properlyskilledworkforce,ortheabilitytoattractone •Safeandhealthylivingconditions •Housingandhealthcareservicestosupportqualityoflife •Educationthatmeetstheneedsoflocalenterprisesandfamilieswholivethere

If the factors above are necessary to catalyze economic development, they are often insufficient to attract and sustain investment. Given the evolution of the competitive world economy, several types of infrastructure are increasingly crucial for success in attracting investment.

According to our survey, 70 percent of respondents ranked infrastructure as the single most important criteria for the attraction and growth of business in remote communities, followed by the availability of a skilled local work force at 52 percent. Geographically, these results were consistent across the country.

Roundtable participants also referenced a lack of strategic, broad based economic development planning, and absence of available best practice information relating to business success and economic development in remote communities. As one respondent notes, businesses should “avoid ad-hoc investment and through partnerships with local communities and business, leverage investments in strategic ways to lay a framework for continued and diversified growth. This can mitigate the vulnerability of the resource-based, boom and bust economic model.”

6 Asia Pacific Foundation, Investing in First Nations – China Strategy, 2011

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Availability of a Skilled Labour Force

Survey and roundtable participants identified that investment would be limited without suitable access to a sizeable, qualified or trainable labour force.

The obvious physical geography of remote communities can sometimes be a barrier to attracting a labour force from outside the community, combining this factor with a higher cost of living, perceived lower quality of life and a sense of isolation results in increased labour costs. The result is often executives having to be compensated at higher-than-normal rates, and skilled trades’ workers having to be provided with additional benefits that add to the costs that could erode the profitability outlook of the investment.

Investors may need to attract labour from outside the community to meet their needs. This is often made more difficult due to limited housing. In Whitehorse, for example, the cost of housing is a major challenge in part due to a lack of access to land for development. In communities such as Fort McMurray, we heard concerns about transitory “fly-in, fly-out” labour pools, where workers are transported from larger centres to remote camps, and the limit this places on developing long term sustainability and a sense of community.

A poignant comment from a survey respondent noted that northern communities are “remote, challenging, inhospitable with little to do other than work,” and that because of this, “many northern communities operate with a camp mentality that is not conducive to family and community growth.”

Additional comments stakeholder comments regarding labour include:

•Wagecompetitionfromlargerurbancentersmakesitdifficulttoattractcertaintypesofskills •Higherwagesofferedinremotecommunitiesareimpactedbyhighercostoflivingincludingfood, housing, fuel and transportation •Itisdifficulttoattractlabourtoworkinminimumwagejobsduetothehighcostofliving.This creates challenges for employers regarding high turnover and cost of training •Localeducationisnotalwaysgearedtoprovidingtheskillsandtrainingthatmeetslocallabour opportunities. Hence, employers must take responsibility for skills based training •TheengagementofFirstNationsandtheInuitinjobcreationwasnotedasintegraltothesuccess of any remote community strategy

Several communities have tapped into migrant labour pools to address shortfalls, particularly in the hospitality and service sectors. For instance, workers from the Philippines have emigrated to Whitehorse and Yellowknife. This presents its own challenges including housing and the cost of living for workers, as well as the public policy barriers that enable workers to locate in Canada.

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In summary, labour is a complex and often expensive component of doing business in a remote community. In the course of our roundtables, we heard that public policies should be re-examined to ensure that they are more tailored to the unique labour needs of remote communities.

Modernized Infrastructure

Participants shared the opinion that modernized infrastructure, including varied energy choices, improved water systems and robust telecommunications services could address some of the longstanding challenges to encourage people to live and establish roots in remote communities.

Affordable, Efficient and Reliable Energy

For businesses considering investment in remote communities, decisions are often based on the availability of advanced infrastructure to support labour attraction, retention and business operations. Affordable, reliableandefficientsourcesofenergy(especiallyincommunitieslocatedoffthegrid),wereacommonchallenge expressed during all roundtables.

For many remote communities, diesel is the most common source of fuel, a product that needs to be shipped from great distances, adding to the already elevated cost of petroleum. For others geographic areas, such as Quebec, there may be an abundance of hydro-electricity, but gaining access to power lines is expensive and slow to occur.

All roundtables noted the high cost of energy as a significant barrier to entry and many wished for a north-southenergygridtodeliverreliableandaffordableenergytoremotecommunities(BCHydrohasbeenmandatedtomakeover30communitiesaspartofitsgrid).

Participants in Vancouver’s roundtable estimated that they spend up to 20 percent of their budget on energy, and noted that a reliable supply of cost effective energy would contribute significantly to business profitability.

In Whitehorse, we heard that the Yukon operates on a stand-alone grid making transmission expensive, especially for the extraction sectors. Some suggested that by connecting to the BC power grid, the Yukon would have access to a more affordable energy supply.

In communities such as Iqaluit and others fuelled by diesel, public policies have been established to cushion rising fuel costs in terms of their impact on residential electricity bills. We heard that these types of policies further exacerbate challenges on things like housing, resulting in a disincentive for people to move from their government subsidized homes.

In most roundtables, stakeholders voiced a desire to see greater pursuit of renewable sources of energy (suchaswind,solar,geothermalandtidalpower),aswellasnewwaysofusingnaturalgastoreduce

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costsandoffercleanerburning/airqualityenhancements.Thereasoningwasinpartthatevenifthesesolutions were not economically viable in the South, they might be economically better than the status quo for the North. Questions were raised concerning the role of energy subsidies and their potential to create disincentives to energy innovation.

For businesses contemplating investments in remote communities, the availability and cost of energy will be a matter of critical importance.

Clean and Abundant Supply of Water

Access to a clean and abundant supply of water is a concern in some parts of the country both for industrial and public consumption. Many remote communities rely on water that is trucked in.

Mentioned in Iqaluit was the fact that some communities cannot count on a safe and reliable water source. Areas such as Fort McMurray will need significant amounts of water for industrial processes, although businesses are pursuing water management and reuse practices. Canada is fortunate to have an abundance of fresh water to meet our needs in the past; however, as we heard during our roundtable in Edmonton, it is already clear that public policies will be needed that address competing needs for water, where,forexample,agricultureandmining/oilandgasdevelopmentsareincloseproximity,andwherewater supplies maybe under duress.

Effective, Efficient Transportation

Transportation is a major factor that impacts success at attracting investment. Within remote communities, businesses require access to roads, rail, air and ports to move goods and enable access. We heard reference to the poor quality of roads with seasonal access, lack of deep-water ports, high costs of air transportation for moving people and goods, the need for north-south rail access and new spur lines to service resource areas. These challenges are evident both in those areas where investment has been flowing and in areas yet to capitalize on new investment scenarios.

For example:

•Forawell-establishedcommunitylikeFortMcMurray,airlinksareavitalpartofmovingpeopleand products in a way that keeps economic activity flowing and growing.

•InHalifax,weheardhowdisinvestmentsinrail,localportsandroadsmeanttransportationlinkswith some remote Atlantic region communities were degrading over time.

•InIqaluit,therearenoroadconnections,andsomesurveyrespondentsfeltthattheairportwastoo small for its traffic when it was built more than three decades ago. Shipping routes are conditioned heavily by weather, and the lack of a deep water port close to the community means that loading and unloading vessels takes a great deal of time and therefore more money.

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Further, the community in Iqaluit is advocating for the placement of a new Canadian defence port in a location that would allow it to serve both military and civilian needs. This type of joint venture with remote communities, especially in the current economic climate, can provide good value to government by supporting its program needs while simultaneously driving growth in nearby communities.

•InWhitehorse,weheardhowthedeep-waterPortofSkagway,Alaskahelpslowerthecostofgoods and facilitates the import of raw materials to be finished in Whitehorse.

Clearly, not all communities have the same needs when it comes to improved transportation links, but in general,mostofthesecommunitiesmayneedenhancedtransportationinvestment,fromthepublicand/or the private sector, in order to attract significant new economic investment.

Dependable Connectivity

Wireless communications systems are a central, “table stakes” part of doing business in every urban market in Canada, and indeed, around the world. However, in many of Canada’s remote communities, these systems are not yet highly evolved. Wireless coverage is also a key enabling technology for public health and safety.

In Whitehorse, we heard that service is limited to only one carrier, and in Iqaluit, the quality and reliability of wireless coverage is barely satisfactory at the best of times. One example from Prince Rupert described a lost opportunity for cruise ships to come into port, that because of an initial lack of wireless connectivity in the area, the firm could not process its business transactions.

High-speed/broadbandinternetserviceisasimportantashavingwirelessnetworks.Inmanyoftheroundtables, we heard stakeholders talk about the challenges of conducting business with inadequate download speeds or high-cost data charges. These challenges beset large companies that may be able to solve them by creating their own networking solutions, but can be particularly harsh for smaller businesses that need to service the larger companies and broader community. A small printing firm in Iqaluit faces these challenges daily when downloading or uploading large graphics files.

Everything from completing secure retail transactions, moving business critical data, building reliable tele-health and distance-learning solutions are all impacted by the availability and reliability of high-speed internet service. In addition to the more obvious business challenges listed above, many stakeholders commented that social cohesion and a feeling of being connected to the broader world was both increasingly dependent on internet services.

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Real Estate Availability

In a number of remote communities, we heard that the availability and cost of housing and land are critical factors in making investment attractive. In some places, including Fort McMurray and Edmonton, this has created a complex public policy problem. The lack of land licensed for new development has led to spiralling prices for existing housing stock, and now current homeowners fear that a flood of new land for development might collapse their asset values. The real estate crunch is not only a problem for residents, but has also created serious availability and cost pressures in the market for commercial real estate.

In Whitehorse, where most land claims are settled, there remains a housing shortage within the city limits. According to some stakeholders, a unique barrier lies in the fact that First Nations, as the largest landowners, are unable to sell real estate, and can only lease their lands for 99 years. This in turn inhibits the development of typical housing and mortgage markets.

Where land claims have yet to be settled, for example in the Northwest Territories and British Columbia, we heard the importance of collaborating with First Nations and sharing information to move a project forward. As we heard in Vancouver and from the mining community, these relationships are critical to the investment certainty for businesses considering operating in these communities. In areas where communities simply have no interest in developing their land, businesses felt that it was equally important that these messages be communicated and respected.

The Asia Pacific Foundation of Canada recently launched an initiative to work on this issue. The Foundation’s National Conversation on Asia is taking a collaborative approach between China and First Nations in British Columbia. The strategy’s goal is to ensure that First Nations communities benefit from investment and that, if development occurs, it is based upon their view of sustainable development. The strategy aims to create joint cultural understandings and build capacity for interactions between the stakeholders, as well as develop best practices for Chinese companies that can be shared among communities to promote consultation and collaboration.

In Iqaluit, we heard of a slightly different housing challenge, where the cost of building materials and the complexity of the logistics associated with building have led to higher prices and less housing stock than is needed.

Decisionssurroundinglanduse(bothresidentialandindustrial),involvemultiplelevelsofgovernmentandstakeholders, and it is often unclear who the key decision makers are and what the approval process is.

The lack of affordable housing stock, where it exists, inhibits business investment. For employers attempting to attract a qualified labour pool, the lack of affordable housing is a challenge. For communities that face this situation, there is a risk that businesses will build out temporary housing to accommodate “fly-in, fly-out” labour that limits the opportunity for sustainable community growth.

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Access to Health services

Health services are a multi-faceted challenge for remote communities. Survey respondents indicated that this was critical for business investment and labour attraction. Among the issues we heard raised in our roundtables:

•Foremployeesconsideringrelocatingtojobsinremotecommunities,accesstoqualityhealthcare, especially for young families and children, can be a key question that impacts willingness to live in those communities.

•Theabilitytoattractmedicalprofessionalstoliveandpracticeinremotecommunitiesisimpacted by many of the other issues described already, in terms of quality of life, cost of housing and living. Additionally, the constant demand for services from a small number of professionals, or perhaps being the sole health professional, can result in medical professionals being reluctant to take on the health care responsibilities for a community.

•Thetimelinessofcriticalcareandurgenthealthservicescanrepresentauniquechallengewhere distances that need to be travelled are long and transportation links are under-developed.

•Aslocalpopulationsage,fearofdeclininghealthwithoutaccesstobestinclasshealthserviceswill force some residents living in remote communities to consider leaving for more urban locations.

•Timelyaccesstoqualityhealthservicesisanacutechallengeinmanyremotecommunities.Where communities have robust connectivity infrastructure, public policies that facilitate deployment of new technologies and solutions, such as home-health and tele-health services, provide an opportunity to expand to a more robust and accessible system.

•Forbusinessesconsideringinvestinginthesecommunities,thebeliefthatemployeeswillbeable to access quality health services is an important factor in imagining whether they will be able to attract and maintain the right work force. Here again, per capita funding models for health infrastructure, and Canada’s system of publicly funded health care, may unintentionally be creating a barrier to investment in remote communities.

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Quality Education

Education was a recurring issue in our roundtables. Its importance was also evident in the online survey where 42 percent of respondents ranked it just below infrastructure and a skilled labour force on their list of important factors to attract and grow business in remote communities.

Common themes included:

•Businesspreferslocaleducationsystemstoputaheavieremphasisonjobskillsdevelopment. For example, one stakeholder from the mining sector described the enthusiasm that young people have personally expressed to him towards learning a life-long set of skills in their home community. We also heard how some mining companies have invested in on-site simulators to train young people to drive big bore trucks, resulting in a well-paying job that will potentially last their lifetime.

•Parentsconsideringmovingtoaremotecommunityorthosewhoalreadylivethereexpecttoseean education system that is comparable to other communities.

•InIqaluit,businessestoldusthatthelowhighschoolgraduationrate(25percent)contributesto an inability to access qualified local labour. During our roundtable in Toronto, stakeholders expressed frustration that while government seemed to dedicate appropriate resources to training, there was a mismatch between the types of skills required and the type of training provided. For example, residents were being trained as hair stylists when a tremendous demand exists for a labour force with basic administration skills or trades experience.

In terms of how to augment local training so that it addresses economic opportunities, there may be a need for businesses and governments to work more closely together on programs and funding models.

Across the centers encompassed by our research, we looked for common themes and points of important differentiation. We sought to understand the situations in which business investment is more easily attracted and what conditions make it harder to attract that investment.

The comments that we heard during the roundtables are very much aligned with the survey results. Along with the availability of infrastructure, such as water, transportation links, energy and broadband are considered to be the most vital conditions that need to be met to attract business investment to remote communities.

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The Upside of Remote Development For All of Canada

Real Growth Requires Investment Not Subsidy

In virtually every roundtable discussion, there was a notable frustration with the sense that Canada tends to treat spending in rural, remote and northern parts of the country as a social obligation more than an economic imperative. Additionally, there is a requirement for the entire country to support the idea that remote communities will significantly contribute to our domestic economy in a very significant way.

From Harris Decima’s research and from our cross-country roundtables, it is clear that we have an incredible opportunity to grow and shape our country’s future. And in order to be successful we must first invest in – not subsidize – our remote communities. As one respondent noted, there is a “lack of understanding by most Canadians of the contributions to the economy coming from remote areas and a consequent unwillingness to invest in remote areas.”

There was a widely held view amongst survey respondents that infrastructure spending in major cities was considered an “investment” but that the same lexicon was seldom used when spending in remote communities. Efforts towards reducing this stigma will also help towards changing Canadians’ perceptions of remote communities. By improving the links between urban and remote, communities can better understandeachother’sinherentvalue.Insteadofaneither/orapproachtoinvestment,itwasheardinplaces such as Vancouver and Toronto that urban and rural Canada should leverage each other’s greatest assets to drive economic growth and competitiveness.

One survey respondent observed that, “the most important challenge facing business in rural communities not connected to regional centres is how to get out of the rut of thinking and acting with their minds in the past. They have to look at what they can create based upon the new economy using the new technologies. If not, they are doomed to be places for survivalists.”

Given the ample evidence that businesses operating in remote communities are making an important contribution to Canada’s total GDP, and offer uniquely powerful growth dynamics, many roundtable participants felt that governments should revisit stereotypical views of the value for money of remote community infrastructure, in terms of net benefit to Canada’s economy as a whole, and not only in the local communities.

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Government: A Catalyst to Enable Remote Community GrowthIn many cases respondents are looking for catalytic investments and not perpetual subsidies. They are seeking streamlining of regulations and cutting red tape, as well as encouraging the government to enable rather than restrict opportunity. We also heard of the need to look at investments much more strategically.

Overall, the need for a long-term strategic plan for Canada’s remote communities permeated each of our discussions. Given the breadth and scope of such a challenge, it will be impossible to achieve without serious leadership.

The need for progressive public policy to encourage a refocus on remote community economies is integral to their success. Quebec Premier Jean Charest’s Plan Nord: the Project of a Generation sets forth an example of a comprehensive plan for the next quarter century to responsibly develop and grow northern Quebec into a strong economic driver while supporting the social and physical infrastructure required to build viable communities.

In recent years, the Canadian public has shown a considerable willingness to rethink some longstanding views on the appropriate roles of the public and private sector. This pragmatic and creative attitude was also evident in our roundtables. Our survey results demonstrate this: 66 percent of respondents favoured programs that included a blend of private and public investment, indicating their willingness to support a P3 model or perhaps a new strategic capital investment model that will support these ideas.

With respect to telecommunications infrastructure, there is a feeling that governments must play a role in ensuring that adequate broadband and wireless coverage is available, and at a reasonable cost. These services are now deemed to be essential to the successful functioning of many businesses, as well as providing critical information transfer in health care and a broadening range of distance-learning options. This implies a need for public policy that stimulates and rewards private investment in these facilities, and that these policies may need to be tuned specifically to meet the needs of remote communities, and more urgently.

Red Tape and Overlap

During the roundtables, we heard frequent comments about the fact that within governments there are often departments and agencies that have overlapping and sometimes competing expectations when it comes to policy that has an impact on remote communities.

One of the more frequent points of discussion involved environmental impact studies, and related permitting processes, noted especially in British Columbia and Quebec. Several described the experience of feeling that economic development agencies were trying to attract investment while other agencies within the same government seemed to have an anti-development bias built into their mandate.

In general, we heard a preference for more “outcomes based” regulation, rather than prescriptive, “bright

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lines” approaches. The idea of a “one project, one permit” approach to major investment projects was raised in roundtables from Vancouver to St. John’s. Aligning policies across all levels of government would inevitably increase investment interest, according to our stakeholders.

Just as there is a requirement for technological innovations in remote communities, so too is there a requirement for innovative models for funding and investment that could include:

•Public-PrivatePartnerships(P3)

•JointPublic-PrivatePilotProjects

•OneProject–OnePermit

Out of Sight Out of Mind – Visibility for Remote Communities

As a percentage of the population, the voice of remote communities is small, and often goes unnoticed. A common refrain in our roundtables was that political systems tend to respond more to demands from urban areas, where the population size and thus the political stakes are a lot higher. Participants were frustratedthatlargerurbanareasoftenbenefitgreatlyfromtheeconomicactivityinremoteareas(e.g.oilsandsdevelopment,forestry,mining)butseemunawarethatinvestmentsshouldbeconsideredahighpriority to realize the potential represented by remote communities.

To illustrate the point, one respondent observed that, “the North is rarely understood by bureaucrats” and the private sector “down south”, in terms of its “economic opportunities and challenges, lifestyle and context.”

The Role for Business

What our research has demonstrated is that there are creative solutions to a host of the challenges identified throughout this report. However, we identified several best practices that when deconstructed revolve most simply around communication. Communication among businesses, communication with communities, communication with governments and most importantly communication within communities; the sharing of information and skills and the need for the organization of this information was heard by stakeholders in each of the roundtables. Further, the sharing of best practices and success stories both within the business community and with government can serve as important inputs into progressive public policies.

Strategies including the need for new energy pilot projects in Iqaluit to help offset the high cost of diesel, stimulating local economies through the purchase of local goods and services whenever possible and taking a holistic view towards the building of communities versus a “fly-in, fly-out” model where it makes sense to do so were all suggestions put forth by stakeholders in places such as Iqaluit, Whitehorse and Fort McMurray. Building out infrastructure in order that it can serve perhaps multiple purposes and benefit nearby communities, as well as hiring local labour whenever possible and providing practical skills based training were seen as critical to building sustainable businesses.

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Success Stories – It Can Be Done!

While the challenges facing businesses in remote communities may seem daunting, many businesses, large and small, successfully operate and contribute to the economic well-being of their community. Information sharing, generating best practices and communication among stakeholders are factors that have led to the success of each of the examples described below.

Prince Rupert - Ten years ago, Prince Rupert, British Columbia was struggling with declining forestry and fishing sectors that were the primary economic drivers of the community. Located geographically closer to Asia than any other North American west coast port, Prince Rupert knew that upgrading its port’s outdated infrastructure would result in increased economic activity to the area. There were many sceptics from government and industry who were reluctant to accept Prince Rupert’s business plan. Despite this, in 2006, funding was provided via a P3 model from the federal government for a new container port. The new port currently sees exports growing at 300 percent per month and has provided a window for remote northern BC communities to access foreign markets. Prince Rupert continues to thrive as a result of successfully refocusing its economy on a new and growing sector.

Baffin Island - Another example of successfully transitioning from a declining industry to a growing market exists in the fishing industry on Baffin Island. The Baffin Fisheries Coalition was formed when CEO Jerry Ward was able to put to use his excess supply of fishing equipment with boats from Newfoundland to form a partnership with local fishers in Nunavut. The Coalition has successfully operated a growing and thriving fishing industry. By sharing knowledge and skills, as well as financially contributing to local communities, the Coalition continues to innovate and expand while realizing benefits for the local members of remote communities in Nunavut.

New Brunswick - JD Irving Limited led a Rural Community Engagement and Forest Industry Sustainability coalition to address the survival of the forest industry and communities that rely on it for economic benefit. This initiative drove forward a collaborative model of growing communities in a responsible yet economically strategic way.

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We’re Ready: Promising Solutions for Canada

In the course of our roundtables, we heard from many stakeholders who made the case that Canadians need to take a fresh look at the existing policy mix that impact investment in remote communities.

They stressed the need for:

1.Integratedlongtermplanninginvolvingboththepublicsector(atalllevels)andprivatesector

2. An open mind to novel funding approaches, including public private partnerships and reducing red tape

3. An attitude that looks at spending in remote communities not as a subsidy, but as strategic investment for the country as a whole

4. Embracing new technology solutions to help bridge infrastructure gaps, in areas such as energy, water, telecommunications, transport, health and education

Now is the time to look at Canada’s remote communities with a new perspective. One that will shape economic potential, encourage innovation and the application of new technology, as well as supporting new models of partnership while respecting our natural resources and contributing to growing healthy communities.

No matter where we live in Canada, now is the time for all of us to work together to drive forward a vision for growth and opportunity in Canada’s remote communities.

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Appendix 1 – Key Observations from Stakeholder Survey

0% 20% 40% 60% 80% 100%

National 57% 35% 7% 1%

Very Important Somewhat Important Not all that important Not at all important

Will remote communities play an important role in the growth of Canada’s economy over the next century?

Shaping Economic Growth in Canada’s Remote Communities Contribuer à l’essor économique des communautés éloignées du Canada

What’s most important to attracting/ sustaining investment?

Shaping Economic Growth in Canada’s Remote Communities Contribuer à l’essor économique des communautés éloignées du Canada

Order from 1-7, with 1 being the most important.

Infrastructure - water, transportation, energy, broadband

Availability of local skilled workforce

Access to education/ skills training facilities

Availability of natural resources

Other business institutions located in community

Availability of healthcare

2.2

2.7

4.1

4.3

4.5

4.5

Green/ eco initiatives to reduce footprint and operating costs 5.7

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0% 20% 40% 60% 80% 100%

National 13% 87%

No Yes

Is it vital for governments to play a significant role in attractionand support of business development in remote communities?

Shaping Economic Growth in Canada’s Remote Communities Contribuer à l’essor économique des communautés éloignées du Canada

0% 20% 40% 60% 80% 100%

National 66% 34%

Programs that require a blend of public and private investment.

Government funded and operated programs that exist even in the absence of private investment.

Which do you tend to favor:

Shaping Economic Growth in Canada’s Remote Communities Contribuer à l’essor économique des communautés éloignées du Canada

22

Appendix 2 - Survey Questions

1. Are you: Male ____ Female____

2. Where are you located?

3. Do you operate a business in a remote community? Y/N

If so, in which province or territory?

4. Age Group: Select by choice segments:

Under 21 22-30 31-40 41-50 51-60 60+

5. What industry best describes your business or organization?

A. Financial

B. Construction

C. Retail

D. Education

E. Government

F. Mining

G. Forestry

H. Tourism

I. Transportation

J. Utilities

K. Energy

L.Manufacturing/Industry

M.Technology/Engineering

N. Other (pleasedescribe)

6. How many years have you been in operation?

Less than 1 year 1-5 years 5-10 years 10 years or more

7.Howmanyemployeesareinyourbusiness/organization?____________

8. Approximately what were your company’s annual operating revenues in 2009? ________________

9. In your opinion, do you believe remote communities will play an important role in the growth

of Canada’s economy over the next century?

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10. Inyouropinion,and/orbasedonexperience,whatarethekeychallengesthatbusinessesfacein

remote communities?

11. On a scale of 1-7 with 1 being the most important, rank the following criteria in order

of importance for the attraction and growth of business in remote communities:

A. Infrastructure – water, transportation, energy, broadband

B. Availability of Healthcare

C. Availability of local skilled workforce

D.Accesstoeducation/skillstrainingfacilities

E. Availability of natural resources

F.Otherbusinesses/institutionslocatedincommunity

G.Green/ecoinitiativestoreduceenvironmentalfootprintandreducebusinessoperatingcosts

12.Basedonyourknowledge/experiencecanyouhighlightexamplesofbusinessesthathave

successful operations in remote communities? What contributes to this success?

13. Is it vital for governments to play a significant role in the attraction and

support business development in remote communities? ____________

14. If there is an ideal role for government in encouraging investment and economic development in

remote communities, what 3-4 things should be the top priorities in terms of government activity?

15. When it comes to government involvement in this area, which do you tend to favour :

A.programsthatrequireablendofpublicandprivateinvestment(suchasaP3approach)or

B. Government funded and operated programs that exist even in the absence of private investment?

16. In your opinion, what are 3-4 things that government should stop doing that may be

counterproductive to encouraging investment and economic development in remote communities?

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Appendix 3 – Roundtable Locations

Ottawa, Ontario

Halifax, Nova Scotia

Fort McMurray, Alberta

Edmonton, Alberta

Vancouver, British Columbia

Whitehorse, Yukon

Yellowknife, Northwest Territories

Montreal, Quebec

Iqaluit, Nunavut

St. John’s, Newfoundland and Labrador

Toronto, Ontario

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Appendix 4 - Roundtable Participants

Elyse Allan President & CEO GE Canada

Josée Allard Detachment Commander, Nunavut Joint Task Force North

Michael Atkinson President Canadian Construction Association

Chris Attwood First Vice President Nova Scotia Chambers of Commerce

Hani Ayoub Vice-President, Program Management GE Canada

Sandy Babcock President Yukon Chamber of Commerce

Marc Barbeau Associé Stikeman Elliott

Perrin Beatty President & CEO Canadian Chamber of Commerce

Jean G. Bertrand Associé directeur - Bureau de Montréal, Ogilvy Renault Associé principal, Avocat - Litiges

Nicolas Bilodeau Associé Odgers Berndtson

Ron Bonnett President Canadian Federation of Agriculture

Dave Borud Owner Northern Windows

Chantal Bouvier Vice-rectrice, Affaires publiques et relations Université du Québec à Montréal - UQAM gouvernementales et internationales

Celia Brennan Branch Manager RBC Royal Bank

Harvey Brooks Deputy Minister Department of Economic Development

Dal Brynelsen President Vangold Resources Ltd

Bev Buckway Mayor City of Whitehorse

Merv Bungay District Manager RSC Equipment Rental

Bruce Burrows Vice-President, Public & Corporate Affairs Railway Association of Canada

Hector Campbell CEO Yukon Energy

Brock Carlton Chief Executive Officer Federation of Canadian Municipalities

Denis Chamberland Associé RSM Richter Management Ltd.

Rita Chamberlin Manager Ron’s Rental Equipment & Industrial Supply

Ken Chapman Principal Cambridge Strategies Inc.

Dan Charlebois Owner/Operator CanadianTire

Charles Chevrette Associé directeur, Bureau de Montréal McMillan

Nadia Ciccone Account Director Ayaya Marketing & Communications

Michael Clair Associate Director, Public Policy Harris Centre, Memorial University

Edith Cloutier Vice-présidente, Ventes - Région de l’Est Allstream inc.

Max Coloma Responsable, Grands partenaires Chambre de commerce du Montréal métropolitain

George Cooper Partner McInnes Cooper

Bernard Courtois President Information Technology Association of Canada

Glenn Cousins Manager Business Services Kakivak Association

Bruce Cullen Energy Efficiency Expert Pulse Energy

Paul Davidson President and CEO Association of Universities and Colleges of Canada

Bruce Demchuk Chief Financial Officer Air North

Tim Doyle Executive Director Yellowknife Chamber of Commerce

Andrew Dunford Policy Advisor NTI

Michael Durocher Educator Keyano College

Craig Ennis Vice-President, Policy and Communications St. John’s Board of Trade

26

Ken Fiske Vice President, Economic & Tourism Development Edmonton Economic Development Corporation

Jennifer Flanagan President and Secretary Actua

Gerrard Fleming Chair Whitehorse Chamber of Commerce

Jon Flemming Director of Economics & Trade Policy Forest Products Association of Canada

Susan Frampton Planner Long Range Planning and Policy Wood Buffalo

Sylvie Francoeur Executive Director CDETNO

Jan Fullerton Manager Skills Canada-Northwest Territories

David T. Fung Chair, National Board of Directors Canadian Manufacturers & Exporters

Brian Gerdes Project Manager EPCOR Water Development

Ken Gibson Executive Director Alberta Construction Association

Frederic Grandmaison Manager CDETNO

Terry Gray Project Manager FSC Architects & Engineers

Ian Greenberg President & CEO Astral Media inc.

Shane Grovue Project Engineer Powertech Labs Inc.

Pierre Guimond President & CEO Canadian Electricity Association

Douglas Hall Chair Nova Scotia Business Inc.

Udloriak Hansen Special Advisor Inuit Tapiriit Kanatami

George Haynal Vice President, International and Government Affairs Bombardier Inc.

Jerry Heck Vice-President, Stakeholder Relations and Growth Careers: The Next Generation

Cameron Henry Executive Director Aboriginal Relations

Brad Hickes Director of Policy and Planning NTI

Brian Hookey Manager, Service Delivery Territories Service Canada

Meg Horn Manager Partnering for Success

Craig Hougen Yukon Representative Canadian Chamber of Commerce

Anne-Marie Hubert Associée Ernst & Young

Neil Irvine Assistant Deputy Minister, Delivery Services Division Employment and Immigration

Adla Itorcheak Executive Director Nunavut Economic Forum

Ross Jacobs General Manager Community Futures Wood Buffalo

Kim Jenkins Superintendent Fort McMurray Catholic Schools

Ramanath Kamath Director of Finance Government of Nunavut

Rick Karp President Whitehorse Chamber of Commerce

Kim Keating Director Suncor Energy

Mary Keith Vice President, Communications JD Irving

Iris Kirschner Chair Wood Buffalo Health Advisory Council

Dave Kirschner General Manager Kirschner Family Corporation

James Knight President AssociationofCanadianCommunityColleges(ACCC)

Ken Kobly CEO Alberta Chambers of Commerce

Don Krusel President & CEO Prince Rupert Port Authority

Cindy Kudloo Partnering & Engagement Officer Parks Canada

Julien Lafaille Strategic Technology BC Hydro

Pierre Lapointe Président et chef de la direction FPInnovations

Adam Larkin Economic Development Advisor CanNor Nunavut Regional Office

Karen Larkin Director of Corporate Services Innirvik Support Services Ltd

Michel Leblanc Président et Chef de la direction Chambre de commerce du Montréal métropolitain

Katherine Lee President & CEO GE Capital

Eric Leuthold Owner Polynya Adventure & Coordination

27

Dave Leverton Management Consultant

Brenda Libby Vice President Sales & Marketing Starlink Aviation inc.

Elliot Lifson Vice-Chairman Vêtements Peerless Clothing Inc.

Stephen Lindley Vice President Aboriginal & Northern Affairs

Bob Long Deputy Minister Economic Development & Transportation Nunavut Bernard Lord President Canadian Wireless Telecommunications Association

Timothy M. Egan President & CEO Canadian Gas Association

Colin MacDonald President Clearwater Fine Foods Inc.

Rylan MacDow Sales Manager The Shaw Group

Bernie Magnan Chief Economist Vancouver Board of Trade

Chuck Maillet Director, Community Development Atlantic Canada Opportunities Agency

Ken Mamczasz Senior Development Engineer City of Edmonton

Andrea Marshall Government Affairs and Public Relations Manager Aurora Energy

Dru Marshall Deputy Provost University of Alberta

Don McInnes Vice-Chair & CEO Plutonic Power Corporation

Heather McIntyre Manager Westmark Whitehorse Hotel

Warren McLeod President Yellowknife Chamber of Commerce

Marc Ménard Directeur Demers Beaulne

Eric Mewhinney Manager, Innovation and Sustainability, BC Hydro Smart Grid Development Program

Bernie Miller Manager Partner McInnes Cooper

David J. Mitchell President & CEO The Public Policy Forum

Gordon Molnar Chair Edmonton Chamber of Commerce

Phil Moon Son Director Northwest Territories Construction Association

Kelly Moote Executive Director Yukon Chamber of Mines

Ian Morrison Senior Principal Stantec

Alisha Morrissey Policy Research Analyst St. John’s Board of Trade

Karen Oldfield President and CEO Halifax Port Authority

Jacques Parisien Executive Vice-President and COO Astral Media inc.

Gilles Patry President & CEO Canada Foundation for Innovation

Jeff Penney Manager, Economic Development Regional Municipality of Wood Buffalo

Nathalie Picard Directrice régionale, Ventes Groupe Compass Québec

Ranj Pillai City Councillor City of Whitehorse

Eric Prud’Homme Vice-président strastégies et affaires publiques Chambre de commerce du Montréal métropolitain

Trevor Quan Analyst BC Premiers Technologies Council

Jennifer Reagan Senior Marketing Development Leader GE Energy

Dwight Redden General Manager Yukon Electric

Nancy Reynolds President and CEO Alberta Centre for Child, Family, Community Research

Martin Salloum CEO Edmonton Chambers of Commerce

Éric Senécal Contrôleur, corporatif Croix Bleue du Québec

Elisapee Sheutiapik President Pauktuutit Inuit Women of Canada

Giuseppe Stanciulescu Sr. Strategic Technology Professional BC Hydro

Bill Stewart Vice President Merit Contractors Association

Paul Stothart Vice President, Economic Affairs The Mining Association of Canada

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Jane Stroud Municipal Councillor Regional Municipality of Wood Buffalo

Alexandra Tarasenco Executive Director Leadership Wood Buffalo

Rod Taylor Chair Yukon Tourism Association

Wendy Taylor Owner/Operator AlcanAir

Sailesh Thaker Vice President, Stakeholder Relations Sustainable Development Technology Canada

Ron Thiessen CEO HDI

Kim Thomassin Associée directrice, région du Québec McCarthy Tétrault S.E.N.C.R.L., s.r.l.

Paul Thomey CEO St. John’s Board of Trade

Darlene Thompson CAP Administrator Government of Nunavut

Hal Timar Executive Director Baffin Regional Chamber of Commerce

Victor Tootoo Manager Aarluk Consulting

Andre Turcotte Assistant Professor, Communications Carleton University

Gord Van Tighem Mayor City of Yellowknife

Joe Vosburgh Chief Strategy Officers Corvus Energy

Stefan Voswinkle President YLYNX Management Consulting Inc.

Norm Wall Account Manager, Commercial Financial Services RBC Royal Bank

Joy Waters Deputy Minister Department of Tourism and Culture

Donna Waters Co-owner Edge Seafood & Steakhouse

Terry Weninger President Yukon College

Chris West Manager of Operations Qikiqtaaluk Corporation

Dale Wheeldon CEO EconomicDevelopmentAssociationofBC/LinxBC

Darryll White Senior Advisor, Strategic Aboriginal and Industry Relations Aboriginal Relations

Yves Wininger Président-directeur Général Veolia Transdev

Carolann Wright-Parks Manager, Community Economic Development Greater Halifax Partnership

Jo Mark Zurel President Stonebridge Capital

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