Good evening to all committee members, and thank you for the invitation to speak with you today. I would like to start by acknowledging that we are gathered on the traditional unceded territory of the Algonquin and Anishinabe peoples.
My name is Hilda Broomfield Letemplier. I am from Happy Valley-Goose Bay in Labrador, and I am here on behalf of the National Indigenous Economic Development Board. Our board is made up of first nations, Inuit and Métis business and community leaders from across Canada, whose mandate is to advise the whole of the federal government on indigenous economic development issues. I am aware that you have begun a study of northern infrastructure projects and strategies. The board would like to offer its perspectives on this topic by presenting the work we have undertaken with regard to northern infrastructure.
In working on the critically important issue of indigenous economic development in the north, we identified infrastructure as a key ingredient for economic and social development. Therefore, the board has released reports and studies on northern infrastructure leading to the addition of an infrastructure index in our most recent 2018 indigenous progress report, due to be released in February 2019.
The first study we commissioned was entitled, “Study on Addressing the Infrastructure Needs of Northern Aboriginal Communities”, and focused on Yukon, the Northwest Territories and Nunavut, as well as Nunavik and Eeyou Istchee in northern Quebec, taken as a whole, and the coastal region of Nunatsiavut in Newfoundland and Labrador. The study showed that although each northern region is unique, many northern indigenous communities face similar infrastructure challenges. In small northern communities, especially in remote areas with small populations, the critical infrastructure that supports economic development is often deficient or absent.
The study found that transportation, energy and telecommunications are key types of infrastructure most strongly linked to economic development. Allow me to elaborate on these key areas.
On transportation, due to the lack of efficient transportation systems, costly workarounds must be developed. Port infrastructure is highly limited. In most communities, ships must use barges to unload the cargo, a process known as lightering, which is extremely time-consuming and costly.
Energy is fundamental to the daily operations of every business. For organizations that weigh the costs and benefits of investing in remote communities, the availability and cost of energy is critically important. This means that the shortage of low-cost and environmentally sound energy options proves a significant obstacle for business investment.
Telecommunications infrastructure is critically important for northern economies and communities. About 50% of communities across the north are dependent on satellite backbone to support basic telecommunications. Consequently, they have limited access to the digital economy and electronic service sectors due to the low speed, low quality and high cost of their systems.
We know that investment in infrastructure, particularly transportation, energy and telecommunications infrastructure, can leverage economic development. However, long-term economic growth also relies on community infrastructure that supports a diversified economy and good quality of life for community members.
Businesses across the north struggle to attract and retain employees when there is a shortage of suitable housing.
Our second study was the business case for a northern economic infrastructure system. To find out the actual dollar impact of greater infrastructure investment in the north, we commissioned a second study. This one was a business case analysis of eight proposed major resource projects across the north, for which the costs of needed infrastructure were weighed against forecasted benefits of the projects. The study found that public investment in northern economic infrastructure that supports major resource development will yield significant economic and fiscal returns.
Specifically, every $1 spent on transportation and energy infrastructure will yield about $11 in economic benefits and $11 in fiscal benefits. The study also found that employment created by major resource projects in the north can generate $3 for every $1 that governments spend on providing services to people. In short, public investment in northern economic infrastructure that leads to major resource employment then contributes a significant fiscal premium to governments.
Reducing poverty reduces fiscal costs to all governments. This is important because raising the northern indigenous standard of living to that of other Canadians would take a great deal more tax dollars than would simply providing more employment opportunities for northern indigenous Canadians.
We then conducted a round table and report. In addition to the board's studies, we hosted a round table discussion in Whitehorse to consult local knowledge holders to generate ideas to leverage investment in northern infrastructure.
Our studies and consultation with northern leaders provided the groundwork for the board's report, “Recommendations on Northern Infrastructure to Support Economic Development”, published in 2016.
Northern Canada is facing many challenges in meeting the infrastructure needs of northern Canadians. To name only a few, building and maintaining infrastructure is more costly in the north—in fact, it is roughly 150% higher than in the rest of Canada—and accessing capital to support infrastructure projects can be challenging because of their inherent risk.
A significant infrastructure deficit puts the north in the position of having to play catch-up. Most funding mechanisms available in the north are overwhelmed by the magnitude of their infrastructure deficits, leaving little room for consideration of strategic infrastructure investments.
With regard to the board's recent work on infrastructure, following our 2016 recommendations report in which we called for bold investment in large, nation-building infrastructure, as well as greater investment in community-level infrastructure, the board has developed an infrastructure index for its upcoming 2018 indigenous progress report. Preliminary results show that major infrastructure challenges still persist for communities in the north.
Key findings include that the infrastructure gap is greatest for Inuit, followed by first nations and Métis, and the largest infrastructure gap is for housing, particularly for Inuit. Furthermore, remote non-indigenous communities enjoy a higher level of infrastructure than do remote indigenous communities.
The board would be glad to come back before this committee to discuss our 2018 indigenous progress report, specifically on the infrastructure index, in further detail, after it is published in February 2019.
Additionally, in February 2018, our board heard from the First Nations Tax Commission on an exciting new initiative. They are proposing to create a national first nations-led institution that would support a better first nations infrastructure system. The proposed first nations infrastructure institution would offer an improved infrastructure service-delivery model that would address the current infrastructure deficit on reserve while building first nations capacity. The tax commission has established a development board to explore the concept further. They are also engaging with existing regional organizations to determine how they could work together to offer an improved service-delivery experience for first nations.
We are happy to support this indigenous-led initiative. An improved first nations infrastructure system will reduce the cost of infrastructure development, improve health and social outcomes, and support the growth of first nation economies to build sustainable communities and nations.
We encourage the Government of Canada to continue working with the development board to explore this concept and other options advanced by indigenous communities and organizations that could improve the first nations infrastructure system.
Based on our previous and recent work, the board has identified numerous opportunities. Three of them include that the debt market is looking for long-term stable investment opportunities; the potential for significant payoff from investment in infrastructure in the north; and major resource projects in the north having a potential to generate $3 in government revenue per worker for every $1 that government invests in them.
To support northern infrastructure and economic development, the board recommends that the Government of Canada address three issues: coordinate investments in economic development infrastructure; increase infrastructure funding and financing; and support northern community capacity by funding research and comprehensive community planning.
It is the board's opinion that upgrading existing infrastructure and improving economic development infrastructure are prerequisites to affordable and sustainable housing in the north. Indeed, community-level infrastructure and large-scale infrastructure go hand in hand in supporting an investment-ready north.
The board would like to take this opportunity to reiterate that northern infrastructure is inadequate to meet the needs of all northen Canadians, indigenous and non-indigenous, and it is limiting our overall ability to realize the great potential of the north. Action is needed now.
With this, I would like to welcome your comments and questions.