Download
1 / 69
690 likes | 912 Views
Cost/Benefit Analysis of Future Investment in the Framework Agreement on First Nations Land Management Final Report—January 27, 2010. Final. Contents. Purpose of the study Study objectives Background on work plan and methods Cost Analysis Benefits Analysis. Purpose of the study.
E N D
Cost/Benefit Analysis of Future Investment in the Framework Agreement on First Nations Land ManagementFinal Report—January 27, 2010 Final
Contents • Purpose of the study • Study objectives • Background on work plan and methods • Cost Analysis • Benefits Analysis
Purpose of the study • Capture the current costs and benefits of implementing the Framework Agreement on First Nations Land Management (FA) to ascertain the true cost to First Nations and Canada. • To estimate the cost and benefits of expanding the number of signatories to the FA. • Contributing to the “business case” for increased investment by GOC.
Study objectives Four areas of concentration: • Future estimate of land transaction activity on reserve land • Estimate future costs (build two models, FNs and GOC) • Identify and describe benefits for both FNs and GOC (quantitative & qualitative) • Comparative Review
Work plan overview ESC May ESC Oct WKSP AGM WKSP Prelim analysis costing Prelim analysis benefits Pilot findings Prelim analysis costing Progress Report Draft cost modelBenefits survey Deliverables Feb 2009 Jan 2010 May Aug Dec Mar June Sep Oct Nov Jul Apr Phase IIPilot Phase IIIRoll-Out Phase ICost Model frameworks Phase IVAnalysis Phase VReporting
Work plan overview – Five phases • Phase I – Cost Model frameworks • Develop GOC and FNs paper models • Create data collection templates (including benefits issues) for both FNs and GOCfor use in Pilot phase. • Phase II – Pilots • Pilot data collection with one INAC region • Pilot data collection with 3 FNs • Input to cost models • Phase III – Roll out • GOC data collection, site visits, follow-up/verification • Data collection FNs: site visits to FNs • Address non-financial benefits with FNs and GOC • Input to cost model • Document investment options • Phase IV – Analysis • Review investment options • Detailed cost analysis • Analysis of non-financial benefits data • Phase V – Reporting • Prepare draft report • Prepare final report
Methods – Participants First Nations Sliammon First Nation Squaila First Nation Tsawout First Nation Tsawwassen First Nation Ts'kw'aylaxw First Nation Tsleil-Waututh Nation T'Sou-ke Nation Tzeachten First Nation Westbank First Nation Whitecap Dakota First Nation Beecher Bay First Nation Chippewas of Georgina Island Kinistin Saulteaux Nation L'Heidli T'enneh First Nation McLeod Lake Indian Band Mississauga's of Scugog Island First Nation Muskoday First Nation Nipissing First Nation Opaskwayak Cree Nation Government of Canada • INAC HQ • Land registry & operations • First Nations Land Management Initiative • Environment • ATR & Titles • Legislative Initiatives • INAC Regions • Atlantic • Quebec • Ontario • Manitoba • Saskatchewan • Alberta • Other Gov’t Dept’s • NRCan • DOJ • Env Can
“Type” of activities Four main “types” of activities: • Complex –business or planning activities that will vary depending of the complexity of the organization • Volume – resources allocated to these activities will vary by the number of transactions/registrations • FNLM – activities performed to support the FNLM Initiative • FNLM-V – activity performed to support the FNLM Initiative but will vary by the number of transactions/registrations
“Type” of activities (cont’d) Four main “types” of activities: • Complex –business or planning activities that will vary depending of the complexity of the organization • Volume – resources allocated to these activities will vary by the number of transactions/registrations • FNLM – activities performed to support the FNLM Initiative • FNLM-V – activity performed to support the FNLM Initiative but will vary by the number of transactions/registrations
Findings on cost and transactions • FA First Nations are increasing the annual number of land transactions at a higher rate than what is generated under the Indian Act. • FA First Nations are able to complete land transactions at less cost than GOC. • Existing operational funding formula is not aligned with actual costs FA FNs are incurring: • In total, half of the current costs are not funded. • FNs allocate more resources to complexity type activities than volume based activities . • Functions identified with largest resource gaps are Environmental Management and Operational Design (transition). • To fulfill obligations under both Indian Act and FA with existing policies in place, an increase in GOC HQ and regional resources is required.
Transactions or Registrations – Historical Trends • This chart illustrates the total number of registrations over the last ten years for FNs that have operated under the Indian Act versus those FNs that are currently (as of FY 08/09) operating under FA (or Self-Government). • FNs operating under the Indian Act (blue line) show some high and low years but an overall average decrease in the number of transactions of 1% per year. • FNs operating under FA (green line) show an overall average increase of 9% per year. • If we use an average number of transactions registered prior to land code coming into effect as an estimate of what FNs operating under FA would register if they were continue to operate under the Indian Act (red line) we see that they would initially registered moretransactions but after a periodof transition they would register less. The average increase would be about 3% per year.
Transactions or Registrations for FA FNs (cont’d) • Changes in the number of transactions for FA FNs vary depending on complexity, average changes over the last 10 years versus an estimate of what would have happened if they remained under the Indian Act are: • Complex A* - FA 13.5% vs Pre 15.1% (diff -1.6%) • Complex B** - FA 6.5% vs Pre 2.5% (diff 4.0%) • Complex C - FA 15.8% vs Pre 1.8% (diff 14.0%) • Most of the overall increase in transactions for FA FNs driven by those rated as a C *Driven by one of the more active FN which became operational recently. **Two of the more active FN became operational recently.
Transactions or Registrations by Type • Over the last ten years most of the transactions completed under the Indian Act have been residential, land interest, other permits or designations, over 40% each year. • There are very few transactions in the Oil & Gas and/or industrial sector for both FNs operating under the Indian Act or FA • For FNs currently operating under FA, we see a shift to more mortgages, terminations and other transactions (easements, amendments, modifications, infrastructural leases such as wells, access roads, hydro, communications) and away from residential, land interest, other permits and designations.
10 year transaction forecasts – Status quo • FA FNs are estimated to see the number of transactions increase to over 3,500 per year. A 32% increase over 10 years from the base year 08/09. • Indian Act First Nations see the number of transactions decrease by 5% (or 358 transactions).
First Nations – Current and Additional/New Resources • The sample of 12 First Nations currently (i.e., in FY 08/09) employ 50 FTEs but feel it is necessary to add on ~37 additional/new FTEs (or increase by 75%). This currently costs the FNs $6.3 million (in salary, O&M and capital), and will increase to $9.4 million with the additional resources.
First Nations – Current FTEs and Costs by Type of Activity • 69% of FTEs and 79% of costs are currently being allocated to activities that are driven by the complexity** of land management. • 27% of FTEs and 19% of costs are dedicated to volume or transaction based activities. Overall, 1,896 transactions were registered in 08/09. • The average costs of registering a transaction ranged from approximately $370 (for FNs rated as a C) to $1,500 (for FNs rated as a B). **This includes activities such as governance, environmental management, operational design, relationship building, monitoring, compliance and enforcement.
First Nations – Add/New FTEs and Costs by Type of Activity • First Nations feel it’s necessary to add resources mainly to activities that are driven by the complexity of land management, in fact 90%(or more) of both FTEs and costs are identified against activities such as governance, environmental management, relationship building, land use planning, monitoring, enforcement and support services.
INAC - Current and Additional/New Resources • 170 FTEs or $41 million in INAC resources currently support land management activities. This includes Headquarters and the 7 Regions expenditures for direct salary, direct O&M, support and some of the G&Cs. • Both Headquarters and the Regions indicate additional resources are required (increases of 26% in FTEs and 11% in costs).
INAC – Current FTEs and Costs by Type of Activity • Fairly equal FTEs are being allocated to complexity versus volume type activities. Most of the costs (about 40%) fund volume type activities. • Overall to process a transaction/registration under the Indian Act, it costs about $2,350 in the Regions and an additional $60 at Headquarters for a total of $2,410. • It also costs about $60 for Headquarters to register instruments under FNLRS or SGLRS, i.e. transactions negotiated/registered by FNs under FA or Self Government
INAC – Add/New FTEs and Costs by Type of Activity • INAC has identified the need to increase resources in all three types of activity areas.
First Nations – Operational Funding versus Current Costs • In total, of the sample12 FNs, operational funding is providing 54% of their current expenditures. This percentage varies depending upon complexity category. Those grouped in A are funded to 75% of their current costs whereas both B’s and C’s are funded at 54% and 51% of costs, respectively. • Note: This analyses looks at total costs and does not take into consideration whether an activity is funded or not.
First Nations – Funding versus Estimated Costs • Should these FNs increase their current resources to include the additional/new resources, in total we see the current funding (operational and environmental) covers 36% of the costs, FNs are covering 31% and 33% remains unfunded.
Methods • Web survey was distributed to 26 First Nations who were operational as of July 2009. Responses were received from 17 First Nations. • Economic/social impact questions were addressed with First Nations participating in the costing exercise. This sample includes those First Nations who have been operational for more than 2 years using 2008/09 as the base year. Responses were obtained from 13 First Nations. • Modified follow-up questions on economic/social impacts were conducted with all First Nations who submitted a response to the web-survey or who participated in the costing exercise. Response were obtained from 17 First Nations.
Overview of Findings – Benefits Review • The FA provides better circumstances for First Nations to improve their land management systems and processes (i.e., governance and decision making, community support, relationship building , more favourable terms and conditions, etc. ). • The FA is impacting economic development efforts on reserve land: • The FA has contributed to First Nations increasing the number of businesses on reserve, with most new businesses being First Nation member-owned business. • FA First Nations are expanding their business development to new and/or different industry areas.
Overview of findings – Benefits Review (cont’d) • FA First Nations have experienced increasing internal and external investment in their communities– in more areas than before (i.e., hard/soft infrastructure, business regeneration/growth, new business). • Increased technical requirements, costs and limited resources are making it difficult for some to move towards fully functional land governance operations. • No operational FA First Nation would consider returning to operations under the Indian Act.
Why did your First Nation become signatory to the Framework Agreement (FA)? • First Nations respondents were asked to provide all reasons why they became signatory to the FA. “Control own lands”, “control decision-making” and “economic development” were the top three reasons selected by respondents: • Elaboration by FN respondents in support of the above selections included: • First Nations feel they are better equipped to make decisions at the local level • Managing their own land is a significant step towards accessing a state of self government and governance • First Nation respondents were then asked to identify the main reason why they became signatory to the FA. 59% of respondents selected “Control own lands” as their main reason. * Other reasons cited: Treaty, direct control over lease revenue; control leasing permits.
Mean 3.8 To what extent did your First Nation develop its land management processes and decision making systems prior to becoming signatory to the Framework Agreement? • There is a fairly even split between FN respondents who developed land management processes from a great extent to some extent prior to becoming signatory to the FA and those FN respondents who developed land management processes to a small extent or not at all. • With a mean rating of 3.8, FN respondents, as a minimum, did develop land management processes to a small extent before becoming an operational FA band. However, there is still a large number of respondents reporting land management processes were not developed at all prior to becoming operational.
Mean 2.8 To what extent has your First Nation been able to develop its land management processes and decision making systems since becoming operational under the FA? • With a mean rating of 2.8, First Nation respondents, as a minimum, have been able to develop land management processes and decision making systems to some extent since becoming an operational FA band. • There is 29% of respondents indicating they have made progress to a small extent or notat all.
Mean 2.8 To what extent do you feel your First Nation is still in transition? • With a mean of 2.8, most First Nations still place themselves in transition, to some extent. • 29% of respondents indicated that they have moved out of transition or are experiencing transition to a small extentor not at all. • Some First Nations have had operational capacity in place for a number of years in advance of the FA. • Further elaboration in support of First Nations’ ratings include: • Some First Nations are still dealing with issues related to funding, training and dedicated resources. This has made transition to becoming operational very slow. • Legacy issues are still being dealt with for some. • Some First Nations that have been operational for several years still consider themselves in transition due to difficulties implementing a fully functional land management office. • Land law development (i.e. environmental management) has taken longer than anticipated.
The majority of respondents indicate land management processes are faster now compared to operating under the Indian Act. No First Nation identified land management activities to be slower. A quarter of respondents mention there has been no change: Three First Nations have processed a very limited number of transactions over the past 10 years (two First Nations registering a maximum of one transaction since becoming operational). One of the First Nations had their land systems developed to a great extent prior to becoming operational. Two First Nations noted they were still in transition to a great extent or a considerable extent. On average, does your First Nation find the processes surrounding land management activities to be faster or slower than those when you were operating under the Indian Act?
On average, does your First Nation find the processes surrounding land management activities to be faster or slower than those when you were operating under the Indian Act?(cont’d) • Some of the changes in processing time are quite significant. Examples of the changes in process timing were provided by First Nation respondents as follows:
How has FA impacted the following characteristics of governance/decision making for your FN? • The FA has had a positive impact on First Nations’ governance/decision making. • The two areas noted to be better by the largest majority of First Nation respondents were the extentofband member involvement and the support from community. • Not far behind are all other attributes listed with a minimum of 71% of FN respondents identifying the characteristics of governance and decision making as being better. • The areas where some First Nations indicated a rating of worse, further elaboration on these circumstances indicate that increased requirements, need for technical knowledge and expertise, lack of training and resources are proving difficult for some to support expectations and undertake essential activities. “It’s good that we are able to function more independently from the department in our land matters, but we should still be afforded the same resources as the department would have if they were still administering our land programs.”
How has the FA impacted your FNs ability to develop more favourable terms and conditions for land related transactions? • Overall, the FA has had positive impacts on First Nation’s abilities to develop more favourable terms and conditions for land related transactions. • Protecting community values for development and flexibility are the two areas identified by the greatest number of FN respondents as being better. Not far behind are protecting community legal interests, lease terms and accountability for third parties also identified as better. • For attributes such as revenue generationand environmental protection , most respondents identified these as being better although some respondents indicate there has been no change or that this attribute is not applicable at this time. • In the area of consistency with land use plan, most respondents mentioned that this question does not apply at this time, that there was no change, or in one instance that the that the conditions for consistency with the land use plan were actually worse. In this instance, again it is a lack of appropriate training and resources cited to perform required research as the main reason why.
How has the FA facilitated relationships with third parties for your First Nation? • The majority of First Nations have identified relationship building components as being better since becoming operational under the Framework Agreement. • Direct involvement with the First Nation (88%), increased certainty/sense of security for third parties (88%), and a better negotiating environment (76%) were the top three factors noted to be better. • Even though a majority (59%) of FN respondents note the area of alternative dispute resolutionprocessmechanisms as being better, a significant share of respondents noted that this did not apply to their first nation and a small percentage indicated no change.
How has the FA strengthened other initiatives within your First Nation? • According to First Nation respondents, the FA has strengthened other initiatives within their First Nation for the most part. Respondents note areas such as the achievement ofoverall vision (82%), marketability (71%) and interactions with otherFNs (71%) are better since becoming operational. • The exception is access to support resources (such as legal, environmental, etc…) where approximately half have indicated that there has been no change and a small percentage indicated that access is worse. The increased need for technical expertise and an inability to fund these types of requirements were noted as reasons why this element is worse.
How has the FA facilitated potential market opportunities? • Better circumstances facilitating the development of market opportunities is being experienced by most operational First Nations. • Enhanced communication, as well as an improved facility to building relationships, with industry as well as other levels of government are notably better. • Fewer First Nation respondents identified an impact on approach to market, ability to select prime land for development, ability to compete and harmonization/collaboration of land use plan. In these areas, between 30% to 40% of respondents indicate there has been no change as a result of the FA. • In one instance a First Nation noted third-party awareness was worse, the response was more so related to the First Nation’s own awareness of third-party requirements (particularly provincial requirements and regulations) There is a lack of technical expertise to efficiently accomplish activities.
What are some of the factors influenced by operating under the Framework Agreement that contribute to attracting business to your reserve? • Overall, First Nations are experiencing improved circumstances under which they are able to attract business on reserve. • Some of the factors that have influenced the environment are: • Control being exercised locally provides direct access to First Nations representatives – decisions are absolute and not delayed by having an additional party involved • A First Nation’s controlled development of the reserve and businesses, including land laws and regulations provides increased sense of security to investors. • Land code (and supporting instruments) provide third parties with clear understanding of conditions • The most cited factor contributing to the attraction of business activity on reserve lands are the efficiencies gained in relation to land management processes, including simplification and improved processing conditions
How has FA impacted the following attributes within your First Nation community? • The FA has had a positive impact on social attributes within operational First Nations. Respondents mention areas such as land management control (100%), community pride (94%), level of interest, involvement of FN members in land management (94%) and, increased awareness of community issues and priorities (94%) are better since becoming operational. • Levels of social assistance appear to be the attribute least affected by FA, where almost 60% of First Nation respondents reported there has been no change. • Respondents mentioned an increased sense of pride resulting from community involvement in the consultation process and the economic development of the First Nation. • Similarly, increased levels of community interest in lands as members of the community felt included throughout the transition phase. • The two elements with a worse rating are related to inadequate (or lack of) training (e.g., to be fully aware of accountability within a Lands Office)
Based on your operational experience to date, would your First Nation consider returning to operations under the Indian Act? • 100% of First Nations responded “No” to this question; no First Nation would consider returning to operations under the Indian Act. • Further elaboration in support of First Nation’s response: • First Nations would not return to operations under the Indian Act because now with the FA, they find it easier to protect and manage lands. First Nations believe managing their own lands will have a positive impact on communities. • First Nations believe they now have a greater opportunity for economic development, something they didn’t have under the Indian Act. • First Nations feel a sense of pride to have moved away from the Indian Act.
