Slow Adoption of ATRs could waste $50 billion in economic opportunity for Canadian communities


Slow Adoption of ATRs could waste $50 billion in economic opportunity for Canadian communities
National Indigenous Economic Development Board shows that we need to get serious about our Addition to Reserve Policies

Ottawa, ON – March 9, 2015 – The National Indigenous Economic Development Board (NAEDB) today released its latest report Improving the Economic Success of Urban Additions to Reserves – Achieving Benefits for First Nations and Local Governments. This Report examines the growing trend of Additions to Reserves within the urban context — and concludes that despite the economic and fiscal benefits ATR’s generate for both First Nation and municipal populations — they are being adopted too slowly, wasting a potential $50 billion of economic opportunity for Canadian communities.

“Urban reserves create jobs and revenues that benefit First Nations as well as nearby municipalities, but there is a lack of awareness about these opportunities,” said Chief Clarence Louie, Chair of the Board. “Our report found that ATR’s can take up to 8 times longer than a municipal boundary extension leaving enormous potential benefits off the table.”

“There will be more ATRs in the future – due to claims being settled and population growth.  First Nations across Canada see ATRs as a critical step to improving their economies.” said Board member Chief Terrance Paul of Membertou First Nation. “There are currently 117 ATRs under active review by AANDC, representing billions of dollars of economic opportunity, so we need to get this right.”

NAEDB Studies of Urban Additions to Reserves

An Addition to Reserve is a parcel of land that is added to the existing land base of a First Nation or is used to create a new reserve. Land can be added, through the Additions to Reserve process, in rural or urban settings.

In November 2014, the NIEDBreleased Stage I of its study on ATR’s.  Identifying Success Factors in Urban First Nations showed the enormous economic and fiscal benefits that can flow to both the municipality and to reserve if a number of best practices are implemented.  The six communities included in the study  have collectively created over 7,000 jobs and over $77 million in annual economic activity benefiting both First Nations and neighbouring municipalities.

The ATR Stage II report released today Achieving Benefits for First Nations and Local Governments builds on these findings. It examines 8 urban ATR communities and found that these ATRs generated approximately $285,000 in spending benefit annually per acre of land converted to reserve (and designated for business purposes) and approximately 36 jobs per acre of land converted to reserve.

The Stage II Report also found that it takes on average 4.2 years to finalize an ATR. The opportunity costs of this delay are borne by First Nations and municipal governments as well as their members and residents.  By comparison, a municipal boundary extension takes about 6 months to 1 year to complete.

Based on a review of eight completed urban ATRs, the Study estimated opportunity costs from ATR-related delay on a per acre basis:

  • About 123 to 280 forgone person years of employment.
  • About $977,000 to $2.2 million in forgone spending related economic benefit.
  • About $39,000 to $88,000 in forgone property tax revenue.
  • About $100,000 to $227,000 in forgone employment related fiscal benefit.

Potential Opportunity Costs to Canada

There are currently 117 ATR applications for over 22,000 acres of urban land under active review by AANDC. If it is assumed that the economic and fiscal potential of these active applications is consistent with the cases examined in the NIEDB’s research, the total opportunity costs associated with ATR-related delay for these proposed urban reserves include:

  • About 2.7 to 6.2 million person years of employment;
  • About $21.7 to $49.2 billion in spending related economic benefit;
  • About $859 million to $2 billion in property tax revenue for First Nation governments;
  • Significant other own source revenues forgone by First Nation governments, like other tax revenues, leasing revenue and net revenue from First Nation operated businesses; and
  • About $2.2 to $5 billion in employment related fiscal benefit for municipal governments.

Improving timelines will improve economic benefits of ATRs

In its report, the Board recommends a variety of actions be taken to improve the efficiency and effectiveness of the ATR process.

First, it recommends that action be taken to complete ATRs more quickly –benefits can be realized sooner by First Nations, regional economies and local governments if ATRs are completed sooner. “Municipal government concerns can be a source of delay in the ATR process. This has resulted in lost economic benefits on both sides. The time is right to work together as good neighbours to achieve benefits for everyone.” said Chief Clarence Louie.

In addition, municipalities and First Nations need to have better mechanisms for achieving service agreements. Planning and processes related to fiscal revenues should be streamlined to reduce barriers for First Nations achieving this type of revenue.

The National Indigenous Economic Development Board

Established in 1990, the National Indigenous Economic Development Board was created by Order-in-Council to provide strategic policy and program advice to the federal government on Aboriginal economic development. Comprised of First Nations, Inuit and Métis community and business leaders from across Canada, the Board plays an important role in helping the federal government develop policies and programs that respond to the unique needs and circumstances of Aboriginal Canadians.

Stage I and Stage II of the Addition to Reserve studies were developed for the NIEDBby Fiscal Realities Economists.

For more information or to schedule an interview, please contact:

David Rodier
Hill+Knowlton Strategies