From ChronicleJournal.com

Aboriginal communities on way to new era of prosperity

Saturday, August 3, 2013 - By Jason Cameron

The challenges that Canada's aboriginal communities face are well-known, and significant improvements have long proved elusive.

But progress is being made on a number of fronts, and we are seeing improvements throughout Ontario.

Of particular importance is the opportunity for aboriginal communities across Canada to assert more influence over their respective economies. As a result, aboriginal people who have not historically shared in the wealth evident in the Canadian landscape are set to experience a new era of prosperity.

One element of this opportunity lies in the financial implications for land claims and land compensation.

Land claim agreements, for instance, have led to economic benefit for aboriginal communities. Beyond that, arrangements are being made between governments or industry and aboriginal communities regarding activities on native territory like the extraction of natural resources. Not long ago, this notion of a "duty to consult" was completely absent - today, it is an obligation.

There are great examples across Canada where aboriginal communities have negotiated impact benefit agreements in mining, forestry and power generation. These agreements result in revenue sharing and jobs, both of which have a tremendous impact on the local community. Ongoing revenue streams may be used today, but in our experience, significant dollars are often set aside for future generations - a wise and generous practice.

Over the past 10 years, there has also been a shift in the way aboriginal people create revenue streams from businesses. aboriginal businesses are becoming much more diverse. A wide range of examples include wineries, construction companies, farming, fishing, forestry, power development, medical facilities and many others. Such businesses have become more common when driving own-sourced revenues.

As an example, the Alderville First Nation near Rice Lake - with financing help from BMO - is currently constructing a five-megawatt ground-mounted solar farm on-reserve that will begin operations this fall.

In recent years, First Nations governments gained the option of becoming members of the First Nations Finance Authority (FNFA). The FNFA's mission is to provide First Nation governments with financial instruments that can help them build their own futures on their own terms. In order to provide First Nations with the same access and terms to financing that other governments in Canada enjoy, the FNFA allows qualifying First Nations governments to participate in its debenture financing process.

As a result of these new realities, aboriginal people have access to unprecedented financial resources. This means communities are better positioned than ever before to improve their services and infrastructure.

The importance of this new capacity to develop infrastructure in aboriginal communities cannot be underestimated. BMO Economics has noted that spending on infrastructure can not only provide short-term support for economic activity, but can also help an economy perform more efficiently over the longer haul - by alleviating bottlenecks, and ensuring the smooth flow of people, goods and even information. This applies to aboriginal communities as much as it does to any other jurisdiction.

As well, the growth of these opportunities will provide more job opportunities for Aboriginal Peoples - particularly younger members of the community - who remain over-represented among Canada's unemployed.

In my experience, qualified aboriginal communities have received funding for various projects that have made a real difference to their members. These run the gamut from the construction of generating stations, gymnasiums, schools and police stations to the financing of infrastructure projects like sewers and water treatment facilities. Such projects have improved the lives of the people who live in these communities, both through the jobs they created and the services that were built.

For example, BMO recently partnered with the Kashechewan First Nation near James Bay to provide financing for the construction of a new on-reserve aboriginal youth centre and an on-reserve Aboriginal wellness centre. Chief Derek Stephen of the Kashechewan has told us that they hope these programs will provide the necessary support and services to support aboriginal youth, and in turn, create greater opportunities for economic growth.

Aboriginal business is a growing sector for the banking industry and has led to focus and special programs. With more partnerships being established every year, the future for aboriginal communities and their relationships with banks is bright.

Jason Cameron is director of aboriginal banking, Ontario, at BMO Bank of Montreal.