Chapter 3: Identifying and pursuing economic development projects
Identifying and pursuing economic development projects
Your community has built a strong foundation for economic development: you have plans that provide strategic direction, clear economic development goals and objectives, and the capacity to manage economic development initiatives. Now, you are ready to take on a new project. This chapter will look at the process of generating ideas for economic development projects, evaluating those ideas and then moving a project forward, while engaging community members along the way.
Generating an idea
Inspiration for a potential economic development project, such as a new community-owned business, can come from many sources:
- Council or community planning may provide direction on potential economic development projects to explore.
- Economic development staff may identify ideas for economic development projects through research or their economic development networks.
- Community members may share ideas for economic development projects.
- The community could be purchasing a good or service outside the community that it could make, provide or grow locally.
- Existing businesses may be looking for a supplier.
- Community members may be looking for a good or service they need, and cannot find it.
- Another community may have a good or service your community does not have yet.
- Someone in the community may be very good at making or doing something that people would buy, who could be encouraged to start a business or help manage a community-owned business.
Other communities or industry may also propose economic development projects to your community, such as entering into a joint venture agreement to pursue a project in collaboration. Chapter 4 of the guide discusses these kinds of projects in more detail.
Leakage studies are one tool economic development staff can use to find potential economic development opportunities. Leakage studies identify the level and type of spending occurring outside the community by community members – the money that is “leaking” out of the local economy by being spent elsewhere. These findings can point towards a good or service that may be able to be provided locally to recapture some of this economic leakage.
Leakage studies can also answer questions on the total level of economic activity generated by the community and the community’s overall spending patterns, as in the goods and services that the community is purchasing.
We did a leakage study that looked at the spending habits of our members, how much money was leaving the reserve, what people [were] buying off reserve, how much they were buying on the reserve and where the gaps were. As part of the leakage study, we also incorporated a community needs door-to-door survey. That study showed us that opening a dollar store was the number one business identified and that would work in Wikwemikong.Mary Lynn Odjig, General Manager/Economic Development Officer, Enaadmaagehjik Wikwemikong Development Commission, Wiikwemkoong Unceded Territory
Case study: Manitoulin Hotel and Conference Centre
Read about how six First Nations communities identified an opportunity within the local economy and ultimately launched the Manitoulin Hotel and Conference Centre in the “Case studies” section of this guide.
Evaluating an idea
Your community has generated some ideas for economic development projects and is considering its next steps. Before investing significant community resources to pursue an economic development opportunity, it is vital to evaluate the costs, benefits and risks of proposed projects to determine which projects represent a sound business decision for your community.
If a project would involve collaborating with an external partner, such as another community or industry, doing your due diligence on your potential partner can help to ensure they are a good fit for your community and the project under consideration. This may require getting to know the potential partner and understanding their values and principles, their contribution to the project, their track record on similar projects, and their reputation with previous partners or customers.
Another aspect of evaluating an idea is to consider how the idea fits with the community’s vision, objectives and values. One way to do this is compare a project with the community’s strategic plan, comprehensive community plan or economic development plan. You can also engage community members for their feedback on the idea. Later on in this chapter there is more information on methods for community engagement.
One way to evaluate a project under consideration is through a feasibility study. Feasibility studies assess whether an idea, project or business is likely to be successful in a particular community or market, and can help you make an evidence-based decision on whether or not to proceed with a project.
Feasibility studies often analyze:
- market issues, such as current or projected market demand, target markets, the supply of inputs in your area, potential competition
- organizational and technical issues, such as community capacity to manage the project, management and staffing requirements, legal and scheduling considerations, technological/equipment needs and associated costs
- financial issues, such as start-up costs, operating costs, revenue projections, sources of financing, profitability
Chapter 2 (“Is there a business opportunity?”) of the Government of Ontario’s Indigenous Business Development Toolkit provides additional guidance and exercises that can help you assess the potential of a business idea. This toolkit is intended for Indigenous individuals thinking about starting or expanding a private business, but can also be used to inform community economic development.
A feasibility study was conducted in the pre-construction phase of the hydro project, which took into account factors such as water flows and the number of megawatts that the river may be able to produce.Randy Restoule, Community and Economic Development Officer, Dokis First Nation
Pursuing a project
Your community has completed its due diligence on an economic development project and concluded that it is viable to move forward. For many projects, developing a business plan is an important next step.
A business plan is the blueprint for how a business will be organized, how it will operate and how it will succeed. As a planning tool, a business plan will help you consider and confirm key elements of the business, such as the business structure, location and facility requirements, management and staffing needs, equipment and information technology, financing, marketing strategies, pricing and profitability. A business plan could also contain performance measures the community can use to track the business’s contribution to community economic development goals.
Business plans are an essential tool for presenting a potential business to economic development decision makers, such as the board of directors of an economic development corporation, and potential funders, such as outside investors, Aboriginal Financial Institutions, banks and government.
The Ontario Network of Entrepreneurs, Aboriginal Financial Institutions and other Canadian banks can provide you with online and in-person assistance on all aspects of business planning and start-up. Chapter 3 (“Planning your business”) of the Government of Ontario’s Indigenous Business Development Toolkit walks through different elements of a business plan. Other online resources that can help you in creating a business plan include AFOA Canada’s Developing Business Plans and Funding Proposals guide and the Business Development Bank of Canada’s webpage on business planning.
Activities such as leakage studies, feasibility studies and business plans may be eligible for funding support from provincial and federal government economic development programs. See the “Additional resources” section of this guide for more information on programs that may support your work.
One way that First Nations support economic development is by supporting member-owned businesses. For ideas about what other First Nations and Tribal Councils are doing in this area, see the examples in the document called Minding Our Own Businesses: how to create support in First Nations communities for Aboriginal Business, published by The Centre for Sustainable Community Development at Simon Fraser University.
Moving from a plan to reality
At this stage, you are ready to begin your economic development project. If your economic development project is a business, there are a number of steps that need to be taken to get the business running. This may include registering the business, opening business accounts, hiring staff, marketing, and developing an approach to managing the business’s operations, finances, human resources and legal requirements. Your community’s economic development staff may have experience from setting up and managing other community businesses that can be drawn on. Chapter 4 (“Getting from a plan to a business”) of the Indigenous Business Development Toolkit walks through the process of opening a business and discusses elements of managing a business.
Monitoring a project
As time goes on, you may wish to monitor the project to ensure it is successfully contributing to community economic development goals and still aligned with the community’s vision, plans and the current economic climate. New investments or approaches may be necessary to renew the project, or to expand the project if there is a viable opportunity for growth.
In a business context, Chapter 5 (“Transitions”) of the Indigenous Business Development Toolkit provides guidance on the business life cycle and transitions related to growth, expansion and winding down a business when required.
Engaging community members
Effective community engagement occurs at all stages of a project’s development, helping leadership make decisions that reflect the values and desires of the community, ensuring the community can understand how and why decisions have been made, and informing community members on how their input has been included in decision-making. Economic development projects that are supported by community members are better positioned to succeed.
There are a number of methods of engaging community members. Effective community engagement generally uses methods that are accessible to the entire community and are responsive to how the community wishes to be engaged.
The Government of Canada’s CCP Handbook contains a section on community engagement and support that may be informative to your engagement activities.
You have to look at whether the economic development opportunities are contextually culturally appropriate. This means it fits with the culture at Wahgoshig and our particular context. We looked into investing into a pharmaceutical/therapeutic company, alternative energy and heavy equipment, for example. Looking at heavy equipment, we were already in this business, we have lots of operators in the community [and] it’s a natural market so it was appropriate to expand that business.Allen Kanerva, Senior Economic Advisor, Wahgoshig First Nation
You don't want to be something that you’re not. In economic development, you don’t want to compromise your core values; you need to hold strong to them, and be sure any decision sits well with you. Stay ethical for what makes sense to your community and be as inclusive as possible for people to see. Usually the benefits are there for all and not just a few; sometimes people just need some help to see the benefits.Kevin Eshkawkogan, CEO, Great Spirit Circle Trail
During our community consultations we heard clearly from the community they wanted to own the project 100% themselves. This meant that rather than going with a 10-megawatt project, which would have meant we needed an investor, we chose to go with a smaller system, a four-megawatt operation that we would own and be able to sustain ourselves without outside partners. To achieve ownership for ourselves, the loan came from the community as well. The interest from the loan that was generated was then reinvested into the community.Grant Taibossigai, Project Manager, Mother Earth Renewable Energy
Community surveys can be a useful tool for engaging community members in community economic development. Surveys are suitable for canvassing members for ideas for potential economic development projects, or for gauging their support for a proposed project.
You can conduct surveys on paper or through online survey tools. If you wish to reach out to off-reserve members, consider conducting the survey online or by mail. Some communities offer incentives for the completion of surveys.
An initial idea was to perhaps run a commercial fishery out of the French River. In order to collect community data regarding this potential endeavour, a door-to-door survey was conducted in the community. The question – “Would you support a commercial fishery?” – was met with a resounding “NO!” (75%). The prevailing sentiment was that this sort of operation went against traditional values and therefore the project did not move forward. This process demonstrates the importance of gathering community-based knowledge throughout your whole economic development venture.Randy Restoule, Community and Economic Development Officer, Dokis First Nation
If you do a community survey, make sure that you have all the facts and you present them accurately. Don’t put out questions that will cause confusion or uncertainty. Make sure your message is clear and concise.Stan Kapashesit, Director of Economic Development, Moose Cree First Nation
Community meetings can provide a useful venue to share information on economic development initiatives with community members and to receive feedback.
Promoting your community meetings can help ensure you are being inclusive and transparent. You likely already have practices in place to advise members of events and meetings, such as a community website, social media, or posters and flyers. There may be legal requirements to provide advance notice of meetings if a ratification vote is required (for example, for the creation of an economic development corporation).
Other ways to engage
It may be useful to undertake interviews or targeted engagement sessions to reach specific community groups, including those that may not be reached through general engagement, such as Elders, youth or off-reserve members. For example, you could make in-school presentations to youth to inform them of economic development projects, obtain their feedback and make them aware of career paths that align with community economic development projects.
You could also engage your community by holding an event such as an economic development conference, a trade show or a showcase of economic development opportunities in the community. Members could attend to learn more about particular projects and provide their opinions and insight on different ventures.
We host annual economic awareness days. This is an important way to inform the community about what we’re doing. We discuss economic development, employment and training. It’s a two-day forum where we present and report on the projects that we are working on. Community members have the opportunity to ask questions and we answer their questions or follow up by preparing reports.Mary Lynn Odjig, General Manager/Economic Development Officer, Enaadmaagehjik Wikwemikong Development Commission, Wiikwemkoong Unceded Territory
Voting and ratification
In some cases, community members may need to vote to ratify economic development plans or the establishment of an economic development corporation. Your community may have its own way of conducting votes and may be established and codified in a manner consistent with community by-laws and/or individual community protocols.
It is important to set up the process so that it is impartial. Make sure there is an abundance of information so that people can make an informed decision. The information has to be simple so that it is easier to understand. However, it is important that people have all the information, regardless of its technical or legal language and nature.Shawn Williams, Economic Development Coordinator, Curve Lake First Nation
A number of First Nations are pursuing renewable energy projects because they feel renewable energy fits with traditional First Nations values of sustainable development. There are two case studies on Piikani Nation and Kluane First Nation’s experiences with renewable energy projects in Ontario First Nations and Renewable Energy, a report published by the Ontario Sustainable Energy Association, which may be informative if your community is considering a renewable energy project.
Find out about how Moose Cree First Nation is pursuing economic development opportunities while addressing a social need by developing a community heliport, in the “Case studies” section of this guide.
- Ideas for economic development projects can come from many sources. Leakage studies are one tool that can help identify potential opportunities for economic development projects.
- It is vital to carefully evaluate any project under consideration. This means evaluating and understanding a project’s potential costs, benefits and risks before deciding whether or not to move forward. Feasibility studies and community engagement are valuable tools in evaluating a proposed project.
- If a proposed project is found to be viable for the community, a sound business decision can be made to move the project forward to the business plan stage, if appropriate, and then into implementation.