The remote community of the Neskantaga, Ontario First Nations, on Aug. 19, 2019.Fred Lum/The Globe and Mail
A group of Indigenous organizations has crafted what it is calling a first-of-its-kind Indigenous economic strategy, billing it as a blueprint for reducing poverty among Indigenous peoples and bolstering the Canadian economy.
Put together by a core group of five agencies, including the Canadian Council for Aboriginal Business, the strategy builds on the recommendations of the 2015 Truth and Reconciliation Commission. It revolves around four key areas: people, lands, infrastructure and finance.
The strategy includes 107 recommendations, described as “calls to economic prosperity,” including the creation of an Indigenous environmental oversight body and the establishment of supports for Indigenous ownership and investment in resource projects.
Currently, lenders consider First Nations’ equity participation in resource projects to be high-risk capital, according to Shannin Metatawabin, chief executive officer of the National Aboriginal Capital Corporations Association (NACCA), one of the organizations that put the strategy together.
“We need to change the page on Indigenous people being the highest-risk capital and see that their participation in resource projects actually de-risks the project,” Mr. Metatawabin said.
The strategy, which will be released on Monday, is based on the premise that closing socioeconomic gaps between Indigenous and non-Indigenous Canadians would reduce poverty among Indigenous peoples and pump billions into the Canadian economy. Economic marginalization – the squeezing out of Indigenous peoples from land and resources – costs an estimated $27.7-billion each year, according to a 2016 report from the National Indigenous Economic Development Board that is cited in the strategy.
Dawn Madahbee Leach, who is chairperson of the NIEDB, helped draft the new strategy. She is also president of Waubetek Business Development,an Aboriginal Financial Institution that operates in northern Ontario. She said she sometimes finds herself stymied when would-be borrowers come knocking at her door. (Aboriginal Financial Institutions, or AFIs, are federally backed lending institutions that serve Indigenous communities. NACCA is an umbrella organization for AFIs.)
Waubetek has a limit of $400,000 per loan. That’s not enough for, say, a construction company that wants to buy a new excavator or an entrepreneur who wants to open a franchise restaurant on reserve.
Historically, banks have been reluctant to lend to businesses on reserves, largely because of difficulty in arranging collateral – a result of the Indian Act’s restrictions on land ownership. This has left a gap in lending alternatives.
“We feel like our hands are tied,” Ms. Madahbee Leach said. “I’d love to do the loans because these are clients of ours who have already proven themselves, but we don’t have the level of financing.”
AFIs have provided $2.4-billion in loans to Indigenous businesses over the past 25 years, the strategy document says, using $365-million in government funding.
The strategy recommends strengthening funding for AFIs to meet loan demand.
It also calls for an infrastructure overhaul, saying the current system makes it so that infrastructure in Indigenous communities “costs the most to build, takes the longest to develop, and has the shortest operational life” compared to other government projects.
That infrastructure includes drinking water systems. A 2021 report by the Auditor General of Canada found the federal government’s efforts to address long-term drinking water advisories on reserves were hampered by an outdated policy and funding formula.
The federal government could help fix the Indigenous infrastructure problem by shifting from annual transfer payments to longer-term agreements that would allow First Nations to borrow against those funds, said Frank Busch, chief executive officer of NationFund, which provides financial advisory services to Indigenous communities.
The federal government has struck some 10-year funding agreements with First Nations as part of a new fiscal relationship now being developed, but those agreements still fall short when it comes to financing for 20- or 30-year timeframes, Mr. Busch said.
Access to capital is a consistent challenge for many First Nations, said Christopher Brown, managing Director of Helios Corp., which works with First Nations to develop projects in energy and other sectors.
Helios is currently working with Big Island Lake Cree Nation, based in Saskatchewan, to bring a high-speed fibre-optic network to the community, at an estimated cost of $10-million. The network would be majority-owned by the First Nation.
Major banks declined to finance the project, as did private equity groups, Mr. Brown said.
But Helios and the First Nation are currently in talks with the Canada Infrastructure Bank for funding, he added.
“They have come to the table for a $10-million project, which is well below their previous $100-million requirement,” he said.
The Canada Infrastructure Bank, a $35-billion Crown corporation created by the Trudeau government in 2017, has come under criticism for moving too slowly to deliver on its mandate to invest in large projects and encourage institutional investors to do the same. The House of Commons transport committee recommended this month that it be abolished.
Last year, the CIB announced it would spend $1-billion on Indigenous infrastructure. To be eligible, a project is required to have a budget of between $5-million and $100-million, and there must be evidence that no other lender will provide financing on terms that make the project viable.
Mr. Metatawabin would like to see the CIB program expanded, possibly into a standalone bank or fund that would use federal funds to backstop Indigenous equity stakes in major resource projects.
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OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
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