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As major Canadian resource projects across the country expand in the wake of rising commodity prices, a less noticed business boom in Canada’s Aboriginal communities is also taking shape.
Economic development corporations, which can loosely be described as businesses started and backed by regional First Nations, Métis or Inuit groups, are helping to grow Aboriginal incomes in communities throughout Canada.
Their benefit is reflected in a recent report by TD Economics. TD estimated that economic development corporations will help the combined income of Aboriginal households, businesses and governments reach $24-billion in 2011, and ballooning to $32-billion in 2016.
“We’re seeing more Aboriginal communities looking to business as a shining light to create opportunity for their young people,” Clint Davis, chief executive of the Canadian Council for Aboriginal Business, said. “So we’ve seen some rapid creation of economic development corporations in the last, probably five to 10 years.”
Many of these EDCs, as they are referred to, started off as small companies that provided services to local resource projects and eventually branched out into more diverse ventures. Mr. Davis said although his organization hasn’t conducted concrete research into when EDCs really began to take shape, anecdotally, the first batch appear to have sprouted up in the early 1980s. Many were founded with the influx of capital that followed in the wake of land claim settlements negotiated with the government.
The Primco Dene Group of Companies is one example of an economic development corporation that has changed its community. The business was founded in 1999 as a catering company to create employment for the Cold Lake First Nations, at a time when the community was experiencing devastating unemployment levels of 70% to 80%.
“There was a lot of economic development in the area in the oil and gas sector, and we saw servicing that industry as the best way to get some meaningful employment at the time,” James Blackman, Primco Dene’s chief executive, said.
The business has since branched out well beyond catering, and includes emergency medical services, commercial real estate and security. And while the Cold Lake First Nations, which owns Primco Dene, received a $25-million land claim settlement in 2002, Primco Dene has grown without using that money.
“Our community was in a deficit before that settlement, so the business was started without any of that money and then grown organically,” Tammy Charland-McGlaughlin, vicepresident of operations, said. She adds the lack of settlement money was a benefit in some way, since it has allowed the company to remain as an entity that functions at arm’s length from the Cold Lake First Nations council.
ACFN Business Group, the business arm of the Athabasca Chipewyan First Nations, is another example of an EDC that has lifted local Aboriginal communities. It started with a handful of employees in 1994 and a pick-up truck, which was used to haul garbage as part of a labour contract with Syncrude Canada Ltd. ACFN has since grown into a diversified business with a dozen subsidiaries and joint ventures, totalling about 1,400 employees.
Like Primco Dene, ACFN has become the main employer for Aboriginals in its region. And it also highlights how EDCs are helping bridge the skills gap that contributes to high unemployment levels in some Aboriginal communities
For the rest of this article, please go to the National Post/Financial Post website: http://www.financialpost.com/entrepreneur/Aboriginals+into+sands/5086631/story.html