Membertou First Nation Chief Terrance Paul vividly recalls the challenges his community faced in the mid 1990s. A small budget, a big deficit and high unemployment hit hard.
“We decided to do something about it,” he says.
What the Nova Scotia community did is what many would describe as an economic miracle. While much of the province has struggled to attract and retain businesses, Membertou First Nation pursued an aggressive commercial development agenda, resulting in a flood of enterprises setting up shop within the community.
It’s an example of a growing trend in Canada. Mines, office towers, big-box retail stores, shopping malls and hotels built by non-Native partners are emerging in aboriginal communities. As First Nations commercial development grows, statistics show aboriginal business income in Canada will rise to $13 billion by 2016 from $9 billion in 2012.
“It’s definitely a trend that is increasing,” says JP Gladu, president and CEO of the Toronto-based Canadian Council for Aboriginal Business, which compiles such figures.
Commercial development on First Nations is fuelling new economic development tools, the pursuit of a better standard of living, a desire for self-government, and the realization the communities have assets to leverage, such as locations near major urban centres or busy highways, Mr. Gladu points out. “Communities are looking for revenue and employment for their people.”
Twenty years on, Membertou First Nation boasts numerous businesses from a diverse range of sectors, modern infrastructure, a downtown Halifax economic development office, and an annual community budget that has grown in those years to $113 million from $4 million. Businesses include a data centre, engineering firms, retail operations and a seafood company. The community is pursuing joint ventures with a Spanish company for a renewable energy business and an 80,000-square-foot Hampton Inn.
“It’s paid off for us tremendously,” Chief Paul says, adding that the Membertou First Nation benefits from community support, talented staff, a stable council and the unique designation of being one of the few First Nations in Canada with ISO 9001 certification that proves it has the mechanisms in place to be a trusted business partner.
“We’re a good partner,” Chief Paul explains. “People are looking to work with people they don’t need to worry about.”
The commercial developments are commonly a mixture of aboriginal businesses with mainstream enterprises, with one key criteria that respect for the land is met. Leasing agreements between First Nations governments and businesses range in length from five to 100 years, and they usually align with community economic development plans, Mr. Gladu says.
For example, Membertou First Nation offers leases that can run up to 30 years in length.
Mr. Gladu says aboriginal community governments use a variety of tools to attract business to their communities, such as competitive leasing arrangements, property-tax holidays and a work force that is young and expanding quickly. “It becomes an attractive marriage,” he explains.
Spin-offs for First Nations include employment and the ability to self-govern. The development also attracts skilled people back to their home communities, he adds.
Vicki Wallace-Godbout is one of those people. Originally from Madawaska Maliseet First Nation in New Brunswick, Ms. Wallace-Godbout recently returned home to open the Edmundston Truck Stop in her community’s new $13 million Grey Rock Power Centre development project, located next to the Trans-Canada Highway near Edmundston. The development, which partnered with a commercial real-estate company and a construction firm, is holding its grand opening on May 16.
“It was great to come back and be close to my family,” says the aboriginal real-estate developer and lawyer.
Ms. Wallace-Godbout says operating a business on First Nation land offered other benefits, such as no income tax. But she says the opportunity to take part in her community’s new development became another a huge reason to return home. “Just to be close to our roots was really important for us.”
Ottawa must do more to enable First Nation governments to pursue commercial development, Mr. Gladu says. One step is to build on the success of the First Nations Land Management Act, which allows aboriginal communities to develop their own land management code instead of relying on the often restrictive rules of the Indian Act.
“That would give them the power to dictate the terms (of the leasing arrangements),” Mr. Gladu says.
Several attempts to reach a representative of Aboriginal Affairs and Northern Development Canada were unsuccesful.
Phillip Langridge, chairman and CEO of Churchill International Property Corp., has been operating his development and investment business for more than 40 years in many parts of Canada. The company has added two First Nations communities in B.C. to that list.
Mr. Langridge says it all started with a meeting with Westbank First Nation Chief Robert Louie. “(He) impressed me tremendously,” he adds.
About three years later, his company has opened the 150,000-square-foot Okanagan Lake Shopping Centre in Westbank First Nation. Tenants include Subway, Tim Hortons, Shoppers Drug Mart, RBC and a state-of-the-art cinema. A 50,000-square-foot addition is planned.
The development is employing a lot of people and it has provided work to local businesses.
“It’s a pleasure to do business with them,” Mr. Langridge says.