Evaluation of the Investment in Economic Opportunities

1.2.1 Background and Description

Investment in Economic Opportunities provides critical support for communities to support greater Aboriginal participation in large and complex economic opportunities. Targeted investments through the Community Economic Opportunities Program provide funding for First Nation and Inuit communities for a range of activities to support communities' pursuit of economic opportunities. The First Nation Commercial and Industrial Development Act includes the adoption of regulations for complex commercial and industrial development projects. These activities provide crucial support to First Nation and Inuit communities in their partnership development with the private sector and other levels of government to effectively participate in, and benefit from, such economic opportunities.

Program components within Investment in Economic Opportunities are as follows:

• First Nations Commercial and Industrial Development Act
• Community Economic Opportunities Program^{Note de bas de page 2}

1.2.2 Objectives and Expected Outcomes

Investment in Economic Opportunities is sub-program 3.2.2 situated under the Lands and Economy Pillar / Community Development Program of the 2014-2015 Program Alignment Architecture.

1.2.3 Program Management, Key Stakeholders and Beneficiaries

1.2.4 Program Resources

The financial authority associated with Investment in Economic Opportunities is Contributions to Support Land Management and Economic Development.

2.2.1 Relevance

2.2.2 Performance - Effectiveness

2.2.3 Performance – Efficiency and Economy

2.3.1 Literature Review

The evaluation team reviewed 70 academic research and government reports that explored approaches to economic development in Aboriginal communities.

2.3.2 Document and File Review

The evaluation conducted an analysis of program data to gain a better understanding of who are the major recipients and types of projects funded. This analysis identified how the funding was spent, and contributed to the selection of key informant interviews and case studies.

2.3.3 Key Informant Interviews

A total of 66 individuals were interviewed as part of this evaluation from the following groups:

• AANDC Headquarters (n=9)
• AANDC regional offices (n=23)
• Other federal government departments (n=2)
• First Nation and Inuit Program Participants (n=23)
• Provincial governments (n=5)
• Industry (n=2)
• First Nations - Non Participants – FNCIDA (n=2)

2.3.4 Case Studies

FNCIDA (n=5)

• Fort William First Nation – Ontario - Wood Fibre Optimization Plant
• Muskowekwan First Nation - Saskatchewan – Potash Mining Development
• Fort McKay First Nation – Alberta -  Oil Sand Mining Project
• Hailsa First Nations – British Columbia Liquefied Natural Gas Facility
• Squamish First Nation – British Columbia – Commercial Real Estate Development

CEOP – Best Practice (n=7)

• Membertou First Nation – Atlantic-– CEOP funds supported commercial and business development
• Conseil Des Montagnais Du Lac St-Jean - Quebec – CEOP funds supported industrial and manufacturing projects
• Nipissing First Nation - Ontario – CEOP funds supported commercial housing and small business projects
• Opaskwayak Cree Nation - Manitoba – CEOP funds supported mining, training, hospitality and website projects
• Flying Dust First Nation - Saskatchewan – CEOP funds supported commercial and corporate development projects
• Alexis Nakota Sioux Nation - Alberta – CEOP funds supported development of reserve lands though land use plan implementation
• Stz'uminus First Nation - British Columbia – CEOP funds supported  infrastructure and land use planning projects

CEOP – Stratified Random Selection (n=26 communities encompassing 53 CEOP projects)

• Economic Development Plan Projects (n=20)
• Technical Studies and Engagement Projects (n=11)
• Capacity Development Projects (n=21)
• Economic Infrastructure Project (n=1)

3.1 Ongoing Need

There is a demonstrated need for economic development on-reserve through key indicators of economic development

Along many dimensions of economic development, such as employment rate, labour force participation and income, Aboriginal communities, and in particular, First Nations individuals living on-reserve, lag behind the rest of Canadians. Access to wealth creation for First Nations is viewed as an essential condition for effectively dealing with the current social challenges that are triggered by poverty and unemployment. See Appendix B for a detailed analysis of economic development indicators for Aboriginal people.

Addresses existing regulatory gap for complex commercial and industrial projects being pursued by First Nations on reserves that creates the condition to attract major capital investment

Prior to FNCIDA, the federal legislative framework in place could not provide parameters that would allow for large capital investments to be done on-reserve. For example, in 2010, the First Nations Industrial Development Act was amended to enable Squamish First Nation to develop land for leasehold condominiums and develop a regulatory regime that replicates British Colombia's land titles system. Without land title certainty, investors faced a potential discount on the value of on-reserve residential properties when compared to equivalent properties off-reserve. The development of a property rights regime, seamless with that off reserve, would increase certainty of land title and ensure a level playing field between on- and off-reserve properties.

Need is limited to those First Nations who are pursing complex commercial opportunities available to them or with significant regulatory gaps preventing major economic development.

Provides economic climate to appeal to potential investors

Implementing economic development projects requires external partners that can contribute to capital investment. FNCIDA enhances the possibility of doing business on-reserve by providing regulatory certainty and thus, removing the disincentive to economic development on-reserve. FNCIDA is intended to move at the speed of business in order to meet commercial timelines. Investors are more willing to undertake projects on-reserve if applicable regulations for their projects mirror those of the provinces in which reserves are located. Investors do not want to take a market discount for doing business on-reserve.^{Footnote 8}Moreover, regulatory uncertainty can prevent the investment communities from even considering undertaking large-scale projects on-reserve.  

Allows First Nations to pursue large-scale projects with the potential for significant economic benefits while protecting against potential negative environmental and heath related impacts

The need for FNCIDA is anticipated to grow as the reserve land base grows through additions to reserve. The Additions to Reserve processes and land designations are opening up new economic opportunities. Since 2006, nearly 350,000 hectares of land were added to reserves under the federal Additions to Reserves / New Reserves Policy, a 12 percent increase to the First Nations land base. Whether there is existing industrial and commercial activity on these lands being added to reserve, or the potential for economic opportunities, FNCIDA can be used to bridge the regulatory gaps between on- and off-reserve regimes.

The regulatory framework is critical for protecting First Nation communities against potential negative environmental and health related impacts of economic development opportunities as the nature and scale of large-scale projects First Nations are pursuing on-reserve land is increasing. FNCIDA provides First Nations with appropriate management of potential environmental, health and safety, and other risks associated with large scale, complex commercial and industrial projects.

Enables the federal Crown to balance its responsibilities and potential liabilities as fiduciary with regard to reserve land management along with its desire to promote and support First Nation economic development

While the need to provide an appropriate regulatory framework is often viewed as a critical step for attracting investment, it is also critical for First Nation communities to be protected against potential environmental or health related impacts. FNCIDA reduces risk among First Nations who enter into these types of large-scale industrial projects, but also limits the liability to the Crown from such industrial projects on-reserve.

3.2 Alignment with Federal Government Priorities

Collaboration with Aboriginal communities in order to facilitate economic development is central priority of the federal government

Various Government of Canada commitments have supported Aboriginal economic development as a government priority. The 2012 Crown-First Nations Gathering committed to unlocking the economic potential of First Nations as a priority. Budgets brought forward by the federal government in 2012, 2013, and 2014 have noted a commitment to Aboriginal economic development. The 2014 Budget noted that there is significant employment and profit opportunities for Aboriginal peoples associated with natural resource development and that the federal government will continue to consult with Aboriginal partners on maximizing opportunities related to resource projects.

FNCIDA aligns with federal government priorities as articulated in the Federal Framework for Aboriginal Economic Development and Advantage Canada: Building a Strong Economy for Canadians

The Federal Framework for Aboriginal Economic Development succinctly lays out the federal government's priorities and approach in the area of Aboriginal economic development. As noted in the document, the framework is meant to align with Advantage Canada: Building a Strong Economy for Canadians. Advantage Canada is the federal government's long-term national economic policy document developed in 2006.

As the Framework suggests, one of the elements of Advantage Canada is recognition that the government has a role in creating the right conditions for Canadians to thrive in economic prosperity today and in the future. It further acknowledges that building opportunities for Aboriginal people to participate in the economy is the most effective way to bridge the socio-economic gap with other Canadians.

The Framework points to four specific ways in which it aligns with Advantage Canada and the federal government's broader economic development approach. They include:

• Focusing government so that roles and responsibilities are aligned to maximize economic outcomes for Aboriginal people;
• Supporting skills and training that will create new opportunities and choices for Aboriginal peoples;
• Leveraging investment and promoting partnerships with the private sector to produce sustainable growth for Aboriginal peoples; and
• Acting to free businesses to grow and succeed by removing barriers to Aboriginal entrepreneurship and leveraging access to commercial capital.

The Framework also highlights an emerging consensus around the idea that the Indian Act places barriers on economic development and investment on reserves. Further, the Framework identifies four strategic priorities, one of which involves strengthening Aboriginal entrepreneurship. Under this strategic priority, addressing the legislative barriers imposed by the Indian Act is one among these four key government activities.

The regulatory reforms supported through FNCIDA align closely with many of the priorities identified in both Advantage Canada and the Federal Framework for Aboriginal Economic Development.

3.3 Alignment with Federal Roles and Responsibilities

FNCIDA falls within the jurisdictional scope of the federal government

The structure created by the Indian Act limits the ability of First Nations to pursue large-scale commercial industrial projects. It is therefore within the scope of the federal government to address this gap. These gaps arise due to the limitations in the Indian Act, the Canadian Environmental Assessment Act, the Canadian Environmental Protection Act, and other legislation to develop an appropriate federal land and environmental regulatory regime on-reserve.

No overlap between FNCIDA and provincial legislation of general application

Regulations made under FNCIDA are developed in collaboration with the provincial government and includes an analysis of provincial regulations, which may already apply of general application. Only regulations that do not already apply will be included under FNCIDA.

It is important to note that FNCIDA is project specific and is initiated by First Nations who show interest in undertaking a particular large-scale commercial or industrial development on-reserve. As such, it may not be used for the incorporation of regulations by reference in the absence of a planned complex project. Specific parcels of reserve lands must be identified as part of the FNCIDA process, meaning that the Act may not be used for blanket incorporation by reference of provincial regulations onto reserve.

FNCIDA does not create uncertainty as to the status of the land

No legal uncertainty remains as a result of the application of FNCIDA regulations. Under FNCIDA, lands continue to be reserve lands.  

FNCIDA provides options outside of the modern treaty process that promotes economic development and self-sufficiency

FNCIDA is a complementary tool to the modern treaty process by allowing First Nations to obtain more immediate and tangible benefits from economic development rather than waiting until the modern treaty is concluded.

A recent evaluation of the process for negotiating modern treaties^{Footnote 9} found that modern treaties are arguably not capable of achieving the same certainty and finality that government initially anticipated as there is now a very complex and shifting legal and constitutional framework. Canada acknowledges that not all First Nations in Canada wish to pursue modern treaty negotiations and has developed other tools to assist First Nations to better manage their lands and resources and pursue economic and community development. Increasing options for development of reserve lands, such as the First Nations Land Management Act and the First Nations Commercial and Industrial Development Act provide additional economic opportunities for some First Nations.

This suite of legislation options are complementary in that a First Nation under the First Nations Land Management Act could also make use of FNCIDA to pursue large scale commercial or industrial operations, without affecting a First Nation's ability to pursue modern treaty negotiations.

4.1.1 FNCIDA Process

The FNCIDA process involves a number of distinct steps. These include:

Step One – Project Identification and Proposal – During this stage the proposed development is explored to determine the conditions and necessary requirements, contractual arrangements and early identification that a regulatory gap is present. A written proposal containing project information is submitted to AANDC for consideration. This stage will normally involve initial discussions with regional AANDC staff and other stakeholders. The proposal requires a Band Council Resolution supporting the initiative.

Step Two – Project Review and Selection – During this stage, AANDC reviews the proposal. This review process takes place at two levels. At the regional level, there is a legal and cost-benefit assessment. At the national level, there is an assessment of regulatory need, an assessment of the feasibility of FNCIDA in the context of the project, its potential for economic impact, an assessment of the level of community support for the proposed project, and indication that the province has expressed interest to participate.

Step Three – Negotiation and Drafting – During this stage, a work plan is prepared outlining the necessary activities to be undertaken in order to negotiate and sign a tripartite agreement. The tripartite agreement involves the federal government, the province, and the First Nation applying to the FNCIDA program. After this, the Minister recommends to Cabinet to consider the necessary regulations for approval.

Step Four – Administration, Monitoring and Enforcement – During this stage, the economic development project is underway and the provincial government enforces the agreed-upon regulations. If and when the project concludes, facilities are eventually decommissioned and land reclamation for the reserve takes place.

To date, only one FNCIDA project has entered the fourth step (Fort William project). Much of FNCIDA's work to date has therefore focused on the first three steps with particular effort on the part of AANDC during steps two and three.

Step two in the FNCIDA process is particularly important because it is at this point that the Department conducts an assessment of the proposed project to determine whether it supports the development of regulations. What this implies is that the success of any project operating within the FNCIDA approach rests not only on the financial viability of the project, the willingness of the First Nation, its private partner, and the province to fulfill their respective responsibilities under the agreement, but also the approval of the federal government.

A number of factors are taken into consideration during this approval process. AANDC normally assesses the proposal to ensure that:

1. The proposal is advanced through a Band Council Resolution requesting the use of FNCIDA.
2. There are no existing sectoral or self-government arrangements that could be used to regulate the work.
3. Consulting members of the First Nation (and possibly conducting a designation vote).
4. The project needs require that the federal government issue land tenure.
5. There are in fact regulatory gaps to address with regards to the project.
6. FNCIDA addresses the regulatory gaps better than alternatives and that the project meets a cost-benefit test.
7. The project has written confirmation from the province as to its willingness to participate in the process.

4.1.2 Comparison of FNCIDA Process to Off-Reserve Process

Although perhaps not immediately apparent, many of the factors, listed above, fundamentally change the nature of an industrial project operating under FNCIDA from that of one occurring off-reserve. Two of these above factors point to political involvement and a level of community support not otherwise required in most business endeavors. Factor 1 requires that a project not only be financially viable but that there is a majority belief on the part of the Band Council that it should proceed, and that FNCIDA is the most appropriate tool to facilitate the project. Factor 3 points to the fact that there must be consensus, at least among a majority of community members, regarding the nature and benefit of the project itself.

These factors are viewed positively in the evaluation, as they are done in order to ensure that the community supports an approach which will draw in provincial standards and systems, including access to the lands by provincial officials for monitoring and enforcement.

Given that proponent First Nations and their development partners will have likely assessed the financial viability of a project prior to presenting a proposal under FNCIDA, factor 6 suggests that cost-benefit is assessed from the federal government's perspective and will consider additional information. In fact, program documentation points to the fact that the federal government's cost-benefit assessment should look into benefits such as direct and indirect economic benefits to the First Nation, economic and tax benefits to the province and Canada, support of self-reliant communities, and potential applicability of regulations for other First Nations.

Program documents note that the cost-benefit analysis should consider the cost of developing regulations for all parties, provincial costs of administering regulations, as well as potential exposure to liability for Canada and the First Nation. Many of these are not considerations for businesses operating in an off-reserve context.

Step three in the FNCIDA process, negotiation and drafting, also bears mention. AANDC acknowledges that the negotiation and drafting stage requires a considerable amount of time and effort by not only the Department, but also the provincial government, the proponent First Nation, and the private partner. For example, development of the Squamish Nation's FNCIDA regulations required two to three years of effort and the review of over 500,000 pages of law. It is important to understand that this time is added to the time and effort on the part of the proponent First Nation and its private partner to first develop a viable project plan.

The extra resources and time required to develop a regulatory regime for a FNCIDA project compared to a similar project off-reserve means that the success of a FNCIDA project requires a relatively strong infrastructure on the part of the participating First Nation. This includes the ability of the leadership of the community to fully engage and sustain the collaboration and negotiations associated with the project over an extended period of time. In other words, the community must be operating in a fairly stable political, social, and economic environment. It is acknowledged that a limited number of First Nations will actually have access to the types of resources that can lead to a significant commercial or industrial project requiring a FNCIDA regulation. It was noted that these types of projects are expected to emerge in central and western Canada predominantly.

4.1.3 Status of FNCIDA Projects

There are currently five FNCIDA projects that have been undertaken.

Fort William First Nation – Ontario - Wood Fibre Optimization Plant

• Status: Enacted Regulations. Project proceeded and achieving expected results. The sawmill is fully operational with a regulatory framework in place.
• The project was a collaborative venture between Fort William First Nation and Resolute Forest Products.
• Sawmill operations began in May 2003 and regulations pertaining to the sawmill operation under FNCIDA came into effect in June 2011.
• The sawmill operation provided the expected financial benefit to Fort William First Nation.
• Members of the First Nation are the first ones to find out about employment opportunities. This has resulted in the mill having 17 percent First Nation employment.
• The sawmill has expanded operations and the province has not faced any challenges in executing its enforcement duties. Sawmill remains in operation while other sawmills in the region are closing.

Muskowekwan First Nation - Saskatchewan – Potash Mine

• Status: In progress – The formal proposal has been approved, the project is in the early stages - at the time of the evaluation, all parties were collaborating to move forward with the project.
• Key milestones to be undertaken:
  • The regulatory framework must be adopted by the federal government in order to incorporate by reference the appropriate laws and regulations.
  • The tripartite agreement must be signed.
  • The parties have yet to secure the capital investment required to proceed with the building of the mine.
• Mining project related to potash production and export proposed by a joint venture agreement between the Muskowekwan Resources Ltd (wholly-band owned company), and Encanto Resources Ltd (operating as First Potash Ventures). The proponents are continuing to secure capital investment for this project.
• Without firm assurance as to regulatory certainty, it is unlikely that the partners would invest the significant amount of funds required (estimated at $2 billion) for a potash operation. Benefits to the community will include significant royalty revenues, training and employment, and other benefits.
• FNCIDA provides assurances to the community that the potential substantial environmental impact and health and safety risks of the project are being adequately monitored and managed.

Squamish First Nation – British Columbia – Commercial Real Estate

• Status: In progress – Drafting instructions for the regulations is being reviewed by the Department of Justice and the Tripartite Agreement is finalized.
• The project has been delayed because of the changing conditions in the Vancouver real estate market as well as elections in the community. Discussions within the community are ongoing and AANDC is ready to proceed when the community is ready.
• The project is expected to result in 12,000 to 15,000 condominium units with an estimated value of $10 billion.
• Work to apply FNCIDA began in 2008. The FNCIDA Implementation Act was passed in 2012 by the Government of British Columbia to facilitate the project. It paves the way for provincial land title regulations to be enforced on-reserve.
• FNCIDA was essential for the development of this project as there is no federal regulatory regime governing condominium development. FNCIDA thus harmonizes requirements with the rest of the province and increases certainty for the public and investors.
• The project is considered a success, given that the technical aspect of the work has been completed and negotiations have been completed.  

Fort McKay First Nation – Alberta - Oil Sand Mining

• Status: Enacted regulations-Project did not proceed because of a downturn in the economy and a change in the commercial arrangements of the private sector partner. Regulations were enacted and intergovernmental tripartite agreement with all relevant parties was put in place.
• A cost-benefit analysis found that over a 25 year period, the economic benefit would be between $1 - 2.3 billion to Fort McKay First Nation and $360 - 720 million in federal tax revenue. A further $3.3. – 6.6 billion in direct and indirect benefits to Canada as a whole were also anticipated to be realized. Meanwhile the cost of developing the regulations and agreement were estimated at $1.7 million.
• Although the project did not proceed, Fort McKay First Nation was the first proposed FNCIDA project in Canada and the first to successfully negotiate and pass supporting legislation. It would have been the first Aboriginal community to join the oil sands business as a producer through a partnership with Shell Canada Ltd. 
• The FNCIDA regulatory regime was critical for the project. Considering the risks to all parties in the absence of a regulatory framework, the project could not have proceeded absent a federal regulatory regime.
• According to key informant interviews, the project was dropped following the purchase of Shell Canada by Royal Dutch Shell. Fort McKay First Nation could not agree with the Project Proponent on a commercial arrangement. 
• A second set of regulations may be produced to update the initial framework as required.

Haisla First Nation – British Columbia - Liquefied Natural Gas Plant

• Status: Enacted regulations. -– First Nation currently in negotiations with investors.
• The project is a strategic priority for all parties involved. It is expected to generate 500 jobs during construction, over 100 permanent jobs for ongoing operation, and a significant amount of revenue for the First Nations. The project is also expected to generate hundreds of millions of dollars in tax revenue for the federal government.
• The Government of British Columbia has passed legislation to facilitate FNCIDA regulations. The regulatory regime was completed in 2012.
• A tripartite agreement has been established regarding the procedures for administration, monitoring and enforcement of the proposed regulations
• Negotiations are continuing with investors. Original proponent just sold interests.
• British Columbia stake in the natural gas industry is growing.

5.3.1 General

• All parties need to remain flexible during the entire process as adjustments are to be expected because of the nature of undertaking complicated economic projects.
• Build and maintain expertise within the federal team (AANDC regional office, Headquarters and Justice Canada). Regional representatives must be familiar enough with the various potential use of this tool, even if they do not have all the technical knowledge related to each of the steps involved in the process.
• As more regulations and more tripartite agreements are being signed, there will be further opportunity to refine the templates and reduce the amount of work and time required during drafting and negotiations.

5.3.2 Project Specific

Muskowekwan First Nation - Saskatchewan – Potash Mine

• Implementing this large scale project has been successful to date due to the strong and stable leadership in the First Nation community. The close relationship built with other stakeholders must be maintained.
• While FNCIDA is a key component of the project, there are a multitude of other dimensions associated with these types of complex projects that the First Nation must be in a position to manage.
• The First Nation community must be well informed about the strengths and the potential risks associated with the project. A clear line of communication, though difficult, must be maintained particularly in light of the high stakes related to a project of this magnitude.
• Engaging the provincial authority as early as possible in the process is critical, as they are party to the tripartite agreement and would often be looked upon to play a significant role in the success of such projects.

Fort William First Nation – Ontario - Wood Fibre Optimization Plant

• The parties had already established effective relationships, which proved beneficial during the negotiation phase.
• The Province of Ontario was committed to supporting this economic initiative.
• AANDC regional office had a strong knowledge of FNCIDA and of the project, which facilitated the development of the regulations and tripartite agreement.

6.1 Ongoing Need for CEOP

CEOP projects address many barriers faced by First Nation and Inuit communities when pursuing economic development

CEOP projects support economic infrastructure, skills and human development, governance, community and economic development plans and accessing capital. CEOP provides funding support to First Nations and Inuit communities who are positioned to undertake greater utilization of their lands and resources, enhance community economic infrastructure, and enhance capacity to address future economic opportunities for economic development purposes.

Findings from the evaluation point to the ongoing need in First Nation and Inuit communities for access to capital, technical support, business and management expertise that contributes to increased capacity and infrastructure in support of economic development projects.

Economic development support is tied to expansion of reserve land 

The Additions to Reserve processes and land designation are opening up new economic opportunities. Since 2006, nearly 350,000 hectares of land were added to reserves under the federal Additions to Reserves / New Reserves Policy, a 12 percent increase to the First Nations land base.

There is a demonstrated need for economic development in Aboriginal communities as identified through key indicators of economic development

Along many dimensions of economic development, such as employment rate, labour force participation and income, First Nation and Inuit communities lag behind the rest of Canadians. Access to wealth for First Nation and Inuit communities is viewed as an essential condition for effectively dealing with social challenges that are triggered by poverty and unemployment. See Appendix B for detailed analysis or economic development indicators for Aboriginal people.

6.2 Alignment with Federal Government Priorities

Various Government of Canada commitments have supported Aboriginal economic development as a government priority. The 2012 Crown-First Nations Gathering committed to unlocking the economic potential of First Nations as a priority. Federal budgets 2012, 2013, and 2014 have noted a commitment to Aboriginal economic development. CEOP also plays a role, another key priority of the federal government.

CEOP is aligned with the Federal Framework for Aboriginal Economic Development by providing opportunities for First Nation and Inuit communities for skills development and leveraging investment and promoting partnership with the private sector. CEOP supports opportunity-ready First Nation and Inuit communities to attract business and investors.

6.3 Alignment with Federal Roles and Responsibilities

CEOP supports economic policy objectives. The Indian Act does not explicitly obligate the federal government to invest federal money towards Aboriginal economic development. Economic development is therefore not a legal obligation under the Indian Act, but rather a policy approach to help address major socio-economic discrepancies between First Nations and Inuit as compared to non-Aboriginal people.

7.1.1 CEOP Projects Undertaken

Between 2009 and 2013, 882 CEOP projects were undertaken supporting over 292 First Nations and Inuit Communities, with a funding total of over $83 million. During this period, CEOP funded a wide range of initiatives.

Text alternative for CEOP Projects Undertaken

The image is in the form of a pie chart and demonstrates the amount of money allocated to the four different types of CEOP projects between 2009 and 2013.

The largest portion of money was allocated to "Economic Infrastructure", totaling 81 projects that were valued at $38,690,821. This project category included specific activities, including planning, design and construction. This section of the pie chart is purple and the funding for this project category represents 46% of over $83 million that CEOP used to support these initiatives.

The second largest category is "Economic Development Plans", totaling 320 projects that were valued at $17,030,079. This project category included specific activities, including developing economic development strategies and plans, business plans, and land use plans. This portion of the pie chart is blue and represents 21% of the total funding.

The third largest category is "Technical Studies and Engagement", totaling 281 projects that were valued at $16,776,566. This project category included specific activities, including feasibility studies, environmental assessment, consultation, strategy development, legal review and engagement (negotiation, partnership and marketing). This portion of the pie chart is red and represents 20% of the total funding.

The fourth category is "Capacity Development", totaling 200 projects that were valued at $10,828,557. This project category included specific activities, including governance, professional and technical service, entrepreneurship, training, conferences, equipment upgrade and purchase, etc. This portion of the pie chart is green and represents 13% of the total funding.

7.1.2 CEOP Project Results

CEOP is a well-constructed and flexible proposal based program that responds to community imperatives and covers a variety of economic priorities and opportunities. CEOP provides the opportunity for First Nation and Inuit communities to design and implement strategies designed to address a market gap.

Positive impacts also demonstrated through the case studies that were randomly selected

CEOP projects selected through a stratified random selection process demonstrated positive results, which included increase in employment of community members, community business development, and development of lands and resources. CEOP was considered by First Nation and Inuit communities to be a program that addressed an important need. CEOP projects were cited as encouraging confidence in the investment community and removing barriers to economic and business development. In many instances, especially in projects dealing with the planning stages of large and complex economic opportunities, longer-term results of CEOP investments' can take many years to materialize.

Leadership and management factors were cited as the main factors that influenced the success of communities. Other key factors of success included having land designations in place and the solid working relationship between AANDC and First Nation and Inuit communities.

Changes in market conditions and changes within the leadership within the First Nation and Inuit communities were cited as having negative effects on the success of CEOP projects.

7.2.1 Positive

The inclusion of funding for infrastructure projects was viewed positively by key informants. Moreover, as highlighted in the literature review, adequate infrastructure is critical to advancing economic development output. This has led to an increase in positive relationships with municipalities as some First Nations have been able to link their infrastructure with the neighboring communities. One such example is the Stz'uminus First Nation in British Columbia and their partnership with the town of Ladysmith. The improved relationship has been beneficial to both the municipality and the First Nations through the expansion of their commercial business ventures and to the formation of agreements to utilize existing nearby infrastructure for water and sewage.

The aggregation of projects at a Tribal Council level is an important positive impact. The planning and development of Flying Dust First Nation and Meadow Lake Tribal Council with the development of a commercial property is one such example. It creates the potential for First Nations within the region to work together under an umbrella organization for a common project and leverage the various advantages from each community. This can have a significant regional advantage of First Nations with higher capacity working with other First Nations in the region to boost economic development.

7.2.2 Negative

There has been a decline in the level of funding as allocated in the Main Estimates from $55.725 million in 2008-2009 to $45.191 million in 2013-2014.  There is also a difference between what is allocated to CEOP through the Main Estimates and what is being spent as listed as the actuals. There is a difference of approximately 57 percent. See Section 1.2.4 – Program Resources for details of CEOP funding. Program officials within Lands and Economic Development sector state that demand for CEOP projects currently exceeds available funding.

9.1 Conclusions

9.2 Recommendations

It is recommended that AANDC:

1. As part of the Performance Measurement Strategy, design and implement performance measures and indicators which provide metrics to objectively evaluate and demonstrate both the short term and longer-term impact of Investment in Economic Opportunities.
2. Ensure that efficiency and economy are being realized as the work to adopt regulations under FNCIDA facilitates the preparation and drafting of regulations for other First Nations projects.
3. Ensure that CORP continues to works as part of a continuum of economic development programs within AANDC to support economic opportunities for First Nation and Inuit communities.