I will reference my slides as in the report I presented.
Thank you for the invitation. I'm Evan Saugstad, board chair of the Northern Development Initiative Trust, headquartered in Prince George, B.C. Although I live in northern B.C., I'm joining you today from Vancouver.
Slide 2. Ten years ago the Government of B.C., led by Premier Campbell, sold BC Rail to CN Rail and returned some of those profits to the people of central and northern B.C. by creating the Northern Development Initiative Trust through an act of the legislature and endowed it with $185 million from that sale. We'll also refer to Northern Development in this presentation as the trust.
Slide 3. Although we are a creation of the provincial government, we are independent from government itself and make our own decisions, subject to meeting the requirements of the act. We are responsible for both the disbursement of our funds and the investments of our capital base. The act has allowed us to do what we wished with our endowment. Although we don't have the option of operating as a spend-down trust and dissolving the trust when the funds are depleted or choose to operate in a sustainable fashion, we have chosen to operate in perpetuity.
Today, after delivering 10 years' worth of grants and loans, we have committed and delivered over $125 million to our customers, and have seen our capital base grow to $250 million through prudent investing that's averaged close to 7% annually over the past decade.
Slide 4. Our board is a mix of five provincial government appointees and eight representatives in the trust area selected from local governments. Four advisory boards consisting of all local governments from our four trust regions are an integral part of the process in determining how and where we should spend our allocator funds. In addition to our own funds and programs, both the federal and provincial governments have selected the trust as a delivery mechanism for some of their programs.
Of interest, in 2009, the federal government entrusted Northern Development to adjudicate and deliver $30 million in community adjustment funds, loans, and grants. Of these funds, $20 million were loaned to a number of B.C. businesses to create jobs during the economic downturn and $10 million were granted to job-creating not-for-profit projects. The staff and board accepted and adjudicated over 500 applications for contracts with successful recipients within two months and all the $20 million in loans will be paid back by business to the federal government by the trust by the end of this year. This was completed at a 1% overhead in comparison to Western Economic Diversification, delivering about the same amount of funds in southern B.C. over 18 months, and at a much higher administrative overhead.
Slide 5. The purpose of the trust is to grow the economy of northern B.C. We can provide funds as either direct grants or as low-interest loans. Although we are responsible to the people of northern B.C. on how we disburse our funds, we have created programs that allow private business to access some of our programs to expand the supply chain in central and northern B.C.
Slide 6. The majority of our programs require the project proponents to leverage funds from other sources and for every dollar from the trust, over $8 is invested by other funders.
Slide 7. Leveraging has been a very successful part of ensuring the economy of northern B.C. grows and it has allowed many of our proponents to use our funds to kick-start their projects and bring other funders on side.
Slide 8. Much of this leverage comes from the federal government and their many programs, including partnering on improvements to many rural airports. The federal government, through their RInC program and the trust, have also invested in many recreational facilities. Another common investment was in projects that benefited from the federal community adjustment fund as referenced in 2009.
Slide 9. Part of our success has been the training and funding of grant writers throughout our trust region. Many of our small and rural communities used to struggle with how they could access the many federal, provincial, and private funding sources that currently exist.
Through training and the provision of funds, we have trained hundreds of individuals who have been successful in accessing close to $100 million in grants for their communities. This also includes many B.C. first nations peoples. The majority of our local governments and many bands access annual funds and hire a grant writer for their community.
Slide 10. These are some of our current programs which are all accessible and listed on the trust website. Based on community input, programs can be added or dropped depending upon uptake or the current economic conditions. Changes are based on the input and advice of our regional advisory committees and staff and require the approval of the board.
Slide 11 just lists some more of their current programs.
Slide 12. This is an example of a program that was funded through the federal government's community adjustment fund and delivered by the trust. Of note, this project could have been funded solely by the trust if the federal funds were not available. This business continues to operate today, and although it may seem very small and insignificant on the Canadian scale, it plays a big part in a very small community, New Hazelton, which is located in an economically depressed part of B.C., the Pacific northwest.
Slide 13. This is another example. In 2009 a private company which operated the local grain elevator in Fort St. John decided it was no longer viable and decided to close it. Local grain farmers, with the help of the trust, put a business plan together, borrowed funds from the trust, bought the elevator, refurbished it, and put it back into operation. The North Pine Farmers Institute, which is now the owner, has been paying back the loan of $874,000 on a grain elevator and rail head, and it continues to operate profitably today. Interestingly enough, private industry has since offered to buy it back, to which the local farmers have so far resisted. In the news today it was announced that the other remaining elevator was beyond repair and would be demolished, so this is now the sole grain elevator in Fort St. John.
Slide 14. Thank you for your time. I can take the questions you might have. If any of you want to hear more or see more, we can certainly entertain you if you would wish to visit us in our office in Prince George, and our CEO and staff would be more than happy to show you around.
Thank you.