Chapter 2: Building institutional and workforce capacity for economic development
Building institutional and workforce capacity for economic development
Building capacity is part of forming a foundation for economic development. Building capacity means ensuring your community has the economic development institutions, tools and staff it needs to achieve its community economic development goals. Specific capacity-building initiatives for your community to undertake may have already been identified in your community planning processes. This chapter will highlight key considerations and resources to assist your community in developing institutional and workforce capacity for economic development.
Economic development departments
Many First Nations have community economic development departments. Common responsibilities of an economic development department include overseeing and implementing the community’s economic development plan or strategic direction for economic development, supporting businesses and seeking new economic opportunities for the community. Economic development departments may be standalone departments, or linked with a lands, resources, business development or other related department.
There is often a need for different departments to work together to advance community economic development. Your First Nation may have a lands and resources department that is developing a land use plan, and your economic development department could work with them to ensure the community’s economic development and land use planning are complementary. Your economic development department could work with an education department to take an inventory of the skills and education in the community, so economic development staff know what kind of opportunities best suit the community and the education department can identify what skill-building needs to occur. When an economic development project moves forward, the departments could work together to ensure that members can access the necessary training and education to participate in the project.
It’s important for the team to be always learning. It’s a learning process; you are learning every day no matter how skilled you are. Also, communication and information sharing among the team is key, because you can’t work in silos.Thomas Lambert, Economic Development Officer, Nipissing First Nation
Economic development entities
A First Nation undertaking economic development may own community businesses or may enter into business agreements with other partners. Many First Nations have set up separate economic development entities through which to invest in, own or manage community businesses and economic development projects. There are many different ways to structure economic development entities, and legal advice is recommended when selecting or establishing an entity for your community. This guide profiles the most common type of First Nations economic development entity, the economic development corporation.
There is a need to have an entity that is autonomous from the political structures because while our custom election code is three years, the business project lines of development to implementation can be three to five years. Therefore there is a need to have economic development as their own entity.Matt Jamieson, President and CEO, Six Nations of the Grand River Development Corporation
Economic development corporations
Economic development corporations are legal bodies separate and apart from a First Nation that serve as the community’s economic and business development arm. A First Nation owns the community economic development corporation as the “sole shareholder,” but the economic development corporation is controlled by an appointed or elected board of directors.
Engaging in economic development through a corporation reduces a First Nation’s financial risk. As a shareholder of the corporation, the First Nation would generally not be held personally responsible for any of the corporation’s debts or liabilities – for example, if a community business or a joint venture with industry suffers losses. The debt remains with the corporation. Engaging professional counsel when establishing the corporation will help ensure financial risk is minimized.
The corporation structure also has the effect of separating the First Nation’s business operations from its political operations. Although Chief and Council establish overall strategic direction for the corporation to follow, and the corporation is ultimately accountable to the First Nation, the corporation’s board of directors oversees day-to-day decision-making. As a result, the political administration’s involvement in business activities is limited.
Separating business and politics prevents business objectives from being overly influenced by political priorities. The Harvard Project on American Indian Development found that keeping “governments focused on strategic issues and out of the day-to-day affairs of reservation businesses is one of the keys to sustainable development,” a best practice that also applies to non-Indigenous governments and businesses. In its survey of 73 Indigenous community-owned businesses in the United States, the Harvard Project found that businesses that were separated from community politics were significantly more likely to be profitable than those that were not.
The Canadian Council for Aboriginal Business’s report Community and Commerce: A Survey of Aboriginal Economic Development Corporations provides insights on economic development corporations’ successes, challenges and strategies. The Industry Council for Aboriginal Business’s Economic Development Toolkit has First Nations-specific information on corporations, such as a list of duties and responsibilities for a corporation’s board of directors (pages 9-10).
You can also find information on benefits and implications of incorporation and the legal requirements for creating and maintaining a corporation on the Government of Ontario’s webpage on incorporation and on the Government of Canada’s Government of Canada’s Corporations Canada webpage.
A lot of communities don't like economic development corporations, but to be successful you must keep politics separate from economic development. It is important that you build trust with the community by reporting often to the community and Council; this way economic development is not micromanaged. We have our Wikwemikong Development Commission to do this work. You need a separate body to do economic development.Mary Lynn Odjig, General Manager/Economic Development Officer, Enaadmaagehjik Wikwemikong Development Commission, Wiikwemkoong Unceded Territory
It should be noted that the Economic Development Board is totally separate from the Band operations and political function of the First Nation. Every member of the Board is first nominated and then elected. They represent a broad range of people with traditional knowledge and business acumen.Shawn Williams, Economic Development Coordinator, Curve Lake First Nation
Building an economic development workforce
Whether they work in the economic development department or the community economic development entity, knowledgeable economic development staff are the engine that makes the community’s economic development efforts run.
Hiring or contracting community members to work in economic development positions may be your community’s first choice. To work in these economic development positions, members may require additional training, certification or mentorship.
We decided that in order to accomplish our new goals – that is, to get out of the dependence on government, [and] the Department of Indian Affairs in particular – we needed to utilize the people that we had in the community.Chief Terence Paul, Membertou First Nation
There are a number of organizations that provide training and support that can assist new and experienced First Nations economic development professionals.
The Ontario First Nations Economic Developers Association (OFNEDA) provides networking and training opportunities for its membership, which includes economic development officers and other First Nations economic development professionals. OFNEDA also conducts and shares research on First Nations economic development.
The Council for the Advancement of Native Development Officers (CANDO) is a national Indigenous organization that provides programs and services, such as courses and custom training options, to Indigenous economic development officers. CANDO also offers an economic development officer guidebook entitled Orientation to the Occupation of Aboriginal Economic Development Officer, as well as certifications for Indigenous economic development professionals.
AFOA Canada, formerly the Aboriginal Financial Officers Association of Canada, offers two professional designations for Indigenous financial professionals: the Certified Aboriginal Professional Administrator designation and the Certified Aboriginal Financial Manager designation. AFOA Canada also offers professional development workshops and courses.
Aboriginal Financial Institutions (AFIs) across the province provide financing and support services to Indigenous businesses and entrepreneurs, promote regional economic development and provide support for communities and their economic development staff. Visit the National Aboriginal Capital Corporations Association website for more information on AFIs.
The Economic Development Council of Ontario provides networking and training opportunities for economic development professionals across Ontario.
Training, employment supports and skills development are available through provincial and federal government initiatives including Employment Ontario, the Aboriginal Skills Employment and Training Strategy and the Youth Employment Strategy.
While the ultimate goal may be to train and employ community members, at times you may need to bring in outside expertise. This may be because you need very specific, technical knowledge, the work is only required for a short time or perhaps you decide to bring in someone to mentor or train a community member to take on that job over time.
Because there was no existing business development capacity within the community, a very experienced and highly recommended consultant was brought on to develop and manage the project. This person helped navigate all the legal and financial needs required and also interpreted the highly technical language so it was accessible to all members. Because of the magnitude of the project and potential for grave liabilities, the investment in this consultant was essential for the preliminary and current success of the project.Randy Restoule, Community and Economic Development Officer, Dokis First Nation
The capacity building never stops for projects like renewable energy; you always have to be learning about the legislation and practices [and] the technologies of this industry. You need to get the expertise to do the due diligence for the health and safety of the community. Even when the wind farm is running, there are a number of contracts to keep up, regulations to keep going and the partnership to upkeep for the operation and maintenance.Grant Taibossigai, Project Manager, Mother Earth Renewable Energy
Additional opportunities to build economic development capacity
Tools and institutions under the First Nations Fiscal Management Act
The federal First Nations Fiscal Management Act (FNFMA) is optional federal legislation that provides First Nations with increased authority over financial management, property taxation, local revenues and financing for infrastructure and economic development. The FNFMA is designed to provide tools and institutions that support First Nations governments with economic and community development and fiscal management, and contribute to greater self-determination of First Nations.
If a First Nation wishes to participate in the FNFMA, they can submit a Band Council Resolution to the federal government requesting they be added to the schedule of the FNFMA. Once added, a First Nation may work with any or all of the First Nations institutions established under the FNFMA:
- The First Nations Tax Commission helps First Nation governments build and maintain fair and efficient property tax regimes to ensure First Nations communities and their taxpayers receive the maximum benefit from these systems.
- The First Nations Financial Management Board provides financial management tools and services for First Nations governments to strengthen their financial management and reporting systems to support economic and community development.
- The First Nations Finance Authority provides investment options, capital planning advice and access to long-term loans with preferable interest rates to First Nations governments.
Obtaining certain certifications from independent bodies can help First Nations build internal economic development capacity and demonstrates financial health, credibility and readiness for economic development to members, investors and capital providers.
The First Nations Financial Management Board offers two financial certification services: the Financial Performance Certification and the Financial Management System Certification. To receive the Financial Performance Certification, a First Nation must develop a Financial Administration Law that sets out good governance and finance practices for Council and staff. With this certification, First Nations are eligible to access loans from the First Nations Finance Authority. If a First Nation has received the Financial Performance Certification and is successfully following its Financial Administration Law, the First Nation can request Financial Management System Certification. Before awarding this certification, the First Nations Financial Management Board will test your community’s use of the practices in its Financial Administration Law.
First Nations should get certification through the First Nations Financial Management Board and get over that hurdle. To get certified, communities have to create financial laws, policies and procedures as well as an annual financial plan. Once Chief and Council approve the financial plan, the financial officer implements that plan. Once you have the certification, you can borrow money from the First Nations Finance Authority. This is critical if you want to get into large-scale projects.Allen Kanerva, Senior Economic Advisor, Wahgoshig First Nation
- Building capacity means ensuring your community has the economic development institutions, tools and staff it needs to achieve its community economic development goals.
- Community economic development departments and economic development entities, such as economic development corporations, can be established to oversee and manage economic development and business management activities.
- Community economic development institutions need knowledgeable economic development staff to succeed. There a number of organizations that can help you find training and support for economic development staff.