Evaluation of the Strategic Investments in Northern Economic Development Program 2012-2013 to 2016-2017

3.2.1 Input-Output Analysis

Malatest also reviewed total SINED funding invested by sector to conduct an input-output analysis. Input-output (IO) measures the impacts of spending within one sector throughout the economy. IO estimates the total impact of a given expenditure and how that expenditure "rippled" through other sectors. The IO model estimates three types of impacts: direct, indirect and induced. Direct impacts are the initial change in expenditures (e.g., constructing and opening a mine). Direct effects on GDP, jobs, and imports are also associated with direct impact. Indirect impacts measure the changes due to inter-industry purchases as they respond to the new demands of the directly affected industries. These are the impacts on other sectors that would not occur but for the initial change in expenditures (e.g., suppliers of the mine purchasing goods and services or hiring workers). Finally, induced impacts measure changes in the production of goods and services in response to consumer expenditures induced at the household level generated by the production of direct and indirect requirements.

To support the IO analysis, CanNor provided Malatest with the total dollars invested per sector. Malatest reviewed the CanNor identified sector and re-coded them using NAICS coding. The recoded sectors are shown in Table 3.1. The matched NAICS coding was used to identify and apply the appropriate Statistics Canada multipliers to estimate the direct, indirect, and induced impacts of SINED funding by sector. It should be noted that financial data was available for the period from 2009 to 2014. All expenditure data was converted to constant 2013 dollars to align with the 2013 input-output model used.

3.5.1 Survey Design and Recruitment

Malatest also conducted a survey with representatives of projects that received funding from SINED between 2012/2013 and 2016/2017 to gather information about how SINED funding impacted the project progress and outcomes.

In consultation with CanNor, Malatest developed an online survey instrument that included questions regarding aspects of SINED-funded project progress. This included questions about leveraged funding, timelines for project completion, project outputs, impacts, and challenges with SINED. A draft survey was developed by Malatest, and shared with CanNor for review and approval (Appendix D).

CanNor provided Malatest with contact information of project representatives, including email addresses and/or phone numbers. All representatives with emails addresses were sent a preliminary letter from CanNor regional offices informing them of the study and the upcoming survey. Respondents then received an email invitation from Malatest with a Frequently Asked Questions (FAQ) document attached (Appendix E). The FAQ included additional information about the study, details on how their privacy would be protected, and a link with login credentials to complete the survey online. Malatest sent two follow-up emails to respondents who had not yet responded to the email invitation. Regional offices were requested to send out a final reminder email to all respondents requesting they complete the survey if they had not done so already. Finally, Malatest conducted follow-up phone calls with respondents who had not yet completed the survey and where phone numbers were available.

The survey was active for a total of four weeks, and the close date was extended over one weekend. The timeline of the survey is shown in Table 3.2.

3.5.2 Survey Completions

CanNor provided Malatest with a list of 98 unique funding proponents from across the three territories to recruit for the online survey. However, emails were only available for 90 cases (92% of original cases). Email invitations to participate in the survey were sent to all 90 cases.

Of the 90 cases invited to participate in the survey, 43 did not respond. An additional twelve cases did not move past the web introduction or the first question, one case unsubscribed, and three cases did not move past question three. Therefore, the number of surveys completed was 39 (42% valid response rate). This is the valid number of survey completes analyzed in this report.

When looking at the respondents who completed the survey, one-half (51%) were from Yukon and approximately one-quarter were from Nunavut (28%) and NWT (21%). Over one-third of survey respondents were funded in 2012/2013 (36%) or 2013/2014 (41%). One-half (51%) of respondents had received SINED funding over two or more funding periods and over one-third (44%) had received funding over three or more funding periods. Most respondents reported that their most recent SINED-funded project was 'in progress' (e.g., data collection or analysis phase) or 'completed' (e.g., final reports submitted). More than one-third (39%) of respondents reported their relationship with CanNor as 'positive'.

4.2.1 Need for SINED

Territorial economies are largely driven by natural resource extraction and development projects.^{Footnote 2} Projects that extract and develop these resource deposits contribute considerably to Canada's overall economic growth, as well as locally to the communities and territories where they are situated in. While these large-scale resource-based projects have the potential to generate large amounts of wealth for the territories, the resource dependency of these economies in the North are prone to boom-and-bust cycles. Within this context, the SINED program operates with the goal of strengthening key drivers of Northern economies and promoting sustainable, diversified economies in the territories.^{Footnote 3}

There is a demonstrated need for economic development programs in the North. Changes in gross domestic product (GDP) since 2012 have shown great variability among the territories, and among sectors. Across all industries, Yukon showed a moderate contraction in 2015 in comparison to 2014 (-5.95%), and the Northwest Territories and Nunavut showed slowed growth (+1.30% and +1.22%, respectively).^{Footnote 3} However, overall since 2012 all three territories have shown modest to large GDP growth: Yukon, +3.07%; Northwest Territories +9.14%; and Nunavut, +14.24%.3 In some cases, total GDP growth between 2012 and 2016 was comparable (Yukon, NWT) to the provinces. When assessing GDP growth across provinces and territories with similar economic diversity index scores, Yukon's GDP growth was on par while NWT and Nunavut's GDP growth was greater.

Despite promising GDP growth in the North, the territories still face challenges in diversifying their economies for a robust, sustainable future. In 2012, the economic diversity index for the North was 88.42 (compared to 93.03 for all of Canada); in 2015 this had shown very little change, at 89.05. In all three territories, the two largest sectors were public administration, and mining, quarrying, and oil and gas extraction. In 2015, information and cultural industries in the territories represented between two and three percent of the total GDP in each of the territories, and agriculture, forestry, fishing and hunting represented less than one percent of the total GDP in each territory.

When looking at unemployment rates, unemployment rates were comparable or lower than the national average in NWT (7.4%) and Yukon (5.6%). However, Nunavut had the highest unemployment rate in Canada (14.9% compared to the national average of 7.0%).^{Footnote 4 Footnote 5} Furthermore, the Canadian Chamber of Commerce reported that territorial businesses lack the tools they need to leverage economic potential. The shortage of local workers and the "cost creep" of business in the territories due to their geographical expanse and distance from major urban centres pose barriers to economic development. The territories have less infrastructure development than the south, large geographical areas, small populations, expensive energy, and high cost of consumer goods. A report of the Top Ten Barriers noted that territorial businesses need infrastructure funding and investments, and the ability to attract and retain talent.^{Footnote 6} There is a required commitment by the federal government to address these barriers to support economic development in the North by enhancing infrastructure and subsequently, making the territories more attractive to potential employees.^{Footnote 3 Footnote 7}

Key informants from CanNor and funding proponents reported similar challenges with economic diversification in the North. Harsher climates and the high energy costs were commonly referenced challenges. Additionally, key informants from Nunavut and NWT reported a lack of existing infrastructure which limited the readiness of the territories for economic diversification.

The demonstrated growth of the territories, and the identified barriers to economic development and diversification, support the continuation of economic development programs which promote the growth of Northern economies.

4.2.2 Alignment with Government Priorities

The SINED program is intended to align with the Government of Canada priorities. Under the previous Government, the Canadian Northern Economic Development Agency (CanNor) was created, followed shortly by the Northern Projects Management Office. These agencies were created to help promote, focus, and improve the efficiency of major project development and implementation in the North. CanNor programs were intended to align with the Agency's strategic objective to develop diversified, sustainable and dynamic territorial economies. In 2015, the election of a new government resulted in a shift in priorities. Initiatives and policies are no longer undertaking under Canada's Northern Strategy, which is no longer active. Northern priorities and policies under the new government have focused more on reconciliation, climate change, and community economic development. The Budget 2017^{Footnote 8} identified several issues as priorities for the federal government, including:

• Innovation and clean technology;
• A clean growth economy;
• Healthier and stronger Indigenous communities; and
• Strengthening relationships with First Nations and Inuit communities.

CanNor's SINED program appears to align with the Government of Canada's priorities and CanNor's strategic objectives. SINED documents, including the Program Guidelines, the Performance Measurement Strategy, the Strategic Investments in Northern Economic Development Investment Plans, and the program Terms and Conditions highlighted the SINED goals of economic diversification and sustainable economic development. Most CanNor key informants agreed and noted that SINED proposals were reviewed based on program terms and conditions, which were established to align with CanNor's strategic objectives to encourage diversified, sustainable, and dynamic economies in the North. However, many CanNor key informants felt that there were impacts of changing territorial and federal priorities. For example, one respondent noted that as economic conditions change (e.g., downturn in mining), the focus will change from one sector to another across regions.

The SINED program also aligned with the Government of Canada priorities areas of innovation and clean technology. SINED has encouraged innovation and clean technology by issuing an innovation and clean technology-targeted Expression of Interest in June 2016. Sixty-nine proposals were received and screened in response to the call. Of those proposals, 21 applicants were invited to submit full proposals in August 2016. However, this appears to be a newer direction for SINED projects as only 10% (n=34 of 328) of projects funded between 2012/2013-2016/2017 had a 'clean technology' component, as identified by CanNor. CanNor key informants agreed, and noted that the call for expression was issued by all three territories in response to the newly identified federal priorities. That resulted in many of the SINED funded projects in that year to have requisite components of clean technology included that may not have been otherwise.

The SINED program also aligned with the federal priority to support growth and partnerships with Indigenous communities. As stated in the Program Guidelines, SINED project assessment should pay particular attention to a projects' ability to address opportunities that benefit Indigenous peoples, as well as women, minority language communities, youth and persons with disabilities. The Program Guidelines also state that SINED should support eligible projects that increase community capacity by providing expert advice/training in the area of economic and business development. CanNor key informants agreed that the SINED program aligned with this priority area, noting that most of the communities in the North were comprised of Indigenous people. Therefore, economic development supported by funded projects did continue to support Indigenous communities. CanNor's other program, NAEOP, more fully targeted these priorities but SINED also funded some projects aimed at supporting Indigenous business ventures and strengthening Indigenous communities. This was evident in the review of approved projects. Between 2012/2013 and 2015/2016, a total of $8,819,542.00 was allocated to Indigenous organizations (10% of total SINED funding). Forty-nine Indigenous organizations were funded during this time frame. While more Indigenous groups were funded in Yukon, it is important to note that there are more self-governing and "sophisticated" First Nations groups in the territory which many influence the greater number of partnerships between First Nations groups and CanNor in this region.

Overall, CanNor key informants felt the SINED program aligned with most, if not all, federal priorities. Some noted that projects may align more with the priority areas of innovation and clean technology, and clean growth. These priorities were considered more heavily when developing proposals. Few CanNor key informants noted that SINED funded projects did not align with federal priority areas because the North relied on non-renewable energy resources for economic development.

4.2.3 Role for the Federal Government

All key informants, including funding proponents, CanNor staff, and government stakeholders, supported the federal government's role in Northern economic development. CanNor staff, government stakeholders, and funding proponents believed it was necessary to maintain funding earmarked for economic development. If funding was delivered through territorial transfer payments, key informants believed there would be competing priorities (e.g., healthcare) for funding and economic development would not be supported to the extent it is now. Further, CanNor staff noted that the SINED program was the only way the federal government could meet its commitments to economic development.

4.3.1 Publicly Accessible Information

The SINED program aims to promote the availability of publicly accessible information developed through SINED funded programs. Between 2009 and 2015, SINED-funded projects (n=567) produced 85 new maps, 21,375 new data set files, 203 new reports or papers, and 230 conference presentations or posters, and 24 graduate theses.^{Footnote 9} It is not clear whether these were produced across all projects or only a select number. While aggregate data was not available for the evaluation period (2012-2017), this data suggests that information was a common output of SINED funded projects. Further, there may be more publically accessible information pieces that are produced or presented after the SINED-funded project ends. Key informants and survey respondents agreed, and noted that the information produced by SINED-funded projects was publicly available. Stakeholders commonly referred to publicly accessible information as 'knowledge products'. This term will be used interchangeably throughout the remainder of the report.

More than one-third (36%) of survey respondents reported knowledge products as a project outcome. The most common knowledge products included reports (54%), presentations (33%), and academic articles/other publications (31%). The types of knowledge products reported by survey respondents are shown in Table 4.1. Most (71%) survey respondents who reported knowledge products as a project outcome also reported that these products were publicly available (e.g., on the internet) or were shared beyond their organization (e.g., at conferences), supporting SINED's goal of producing publicly accessible information products.

Key informants also reported the production of knowledge products (e.g., reports, training manuals/workshops, presentations, datasets, and maps). Many of these knowledge products were created as a result of tourism- or geoscience- related projects, as observed in the review of project files and reports, and key informant interviews. Key informants from the tourism sector were more likely to report training documents being created as a result of SINED-funded projects (e.g., manuals to support tourism operators). The tourism industry has also produced pan-territorial guidelines to support operators in establishing and maintaining their business as part of a SINED-funded project.

SINED-funded geoscience projects produced many research or data items, including new maps, data sets, or methodologies that are anticipated to advance the sector. Raw data has also been shared with the industry to support investment and research, with the goal of establishing new mines. Key informants noted that mapping led to the identification of potential mineral deposits that attracted national and international organizations that have subsequently made or could make substantial investments in the territories.

Very few CanNor key informants reported that some funding proponents did not want to produce publicly accessible information as a result of the SINED-funded project. Some private organizations did not want to share their findings with competitors. Due to the small number of key informants who reported this finding, it is not clear if this is consistent across sectors or territories.

4.3.2 Expansion of Multi-User Infrastructure

Between 2012/2013 and 2014/2015, SINED contributed $6,007,814 to infrastructure studies. It was not clear if any of the SINED investment led to infrastructure projects as 2016/2017 data is not yet available, but it is unlikely within this evaluation period. CanNor key informants noted that infrastructure funding was limited, and invested mostly into feasibility or mapping studies that are precursors to infrastructure projects. Additionally, less than one-quarter (21%, n=8) of survey respondents reported that their project outcomes included community/public-use infrastructure. Additionally, very few respondents (less than 5) reported telecommunication access as a project outcome.

Most CanNor, territorial government and funded key informants reported that SINED did not have the large budgets necessary to support Northern infrastructure projects, or the ability to fund projects for terms long enough to see such impacts. Instead, SINED-funded infrastructure projects supported opportunities for infrastructure development that may occur in the future. Examples include the anticipated development of mines as a result of geoscience projects, as well as the mapping of Frobisher Bay (Nunavut) which is anticipated to lead to the development of a port.

4.3.3 Ability of Northerners to Respond to Economic Development Opportunities

The SINED program aimed to increase the ability of Northerners to respond to economic development opportunities. Two-thirds (64%) of survey respondents reported community economic development (e.g., through business opportunities, tourism, entrepreneurship opportunities) as a project outcome. Approximately two-thirds (64%) reported that their projects created or will create jobs for Northerners, and one-third (31%) of those respondents reported that these jobs will be sustained after expiration of project funding. Additionally, almost one-half (44%) of respondents reported their project led to or will lead to training/skills development for Northerners.

While survey data supported the outcome of opportunities for Northerners, the Evaluation team noted the difficulty of evaluating the number of jobs created for Northerners due to the differences in project reporting. Most project applications reviewed by the Evaluation team did propose hiring Northerners, but most key informants from all stakeholder groups (CanNor, territorial government and funding proponents) noted that the majority of jobs would be created beyond the lifespan of SINED-funded projects. The geoscience case study found that many jobs were anticipated to be created as a result of geoscience research, for example, when mines open or when the port in Iqaluit is developed and operational (seabed mapping in Frobisher Bay project). Similarly, for pilot projects that have positive outcomes, it is expected that future investments will be made by businesses as a result and these would result in employment of Northerners. The tourism case study found that as the North is promoted as a tourist destination, jobs for tourism operators, craftspeople and those in the hospitality industry will continue to increase. Similarly, research to support commercialized inshore and offshore fisheries in Nunavut is intended to enhance the capacity of local communities to develop their fisheries by providing jobs and training.

For SINED projects funded years ago, mines and businesses have opened, but it was difficult for key informants to make direct attributions given the SINED project was one of several factors that may have impacted the subsequent economic development. However, some funding proponent key informants reported jobs being created as a direct result of SINED funding. The tourism case study and key informants from the sector found that SINED funding supported tourism such that careers in this sector were now a viable option for Northerners. Key informants from other industries, including mining, geoscience, and from territorial governments also reported jobs being created as a result of SINED, but high-level jobs were commonly filled by individuals from the South. While this does not meet the program goal to create jobs for Northerners, some funding proponent key informants reported that SINED funding created opportunities for specialized jobs in the North that would not exist otherwise (e.g., engineers). Other funding proponents also noted that bringing employees and students to work on SINED-funded projects promotes "life in the North" and may encourage them to remain living in the territory after the project ends. This was also identified during the roundtable sessions on the renewal of SINED with funding proponents conducted in June 2017 by CanNor executive in Yukon.

While is it difficult to directly attribute to SINED, the funding program has reportedly created some jobs for Northerners as a result of SINED-funded projects. However, SINED is anticipated to create significantly more jobs for Northerners, or promote relocation to the North by recruiting talent from the South to fill knowledge/skills gaps. These outputs are not likely to be seen in the immediate future and are more likely to be realized after a project ends.

4.3.4 Increased Partnerships Amongst Northern Organizations and Governments

SINED funding also appeared to impact relationships between funding proponents and CanNor. When asked whether SINED funding impacted their relationship with CanNor, 41% of respondents reported that their relationship had improved as a result of the program. Similarly, 43% of respondents reported that their relationship had remained the same.

CanNor key informants also reported increased partnerships, despite the age of the SINED program. Key informants noted that Project Officers and proponents were still establishing connections with governments and organizations, and that this was necessary to account for the large turnover in CanNor and territorial government staff in the North.

4.3.5 Access to Capital

SINED-funding is intended to increase access to capital for Northern economic development projects. Most project participants, including key informants and survey respondents agreed that SINED-funding increased access to capital. Between 2015/2016 and 2016/2017, years for which the data was available, $34,222,465 was leveraged from other organizations or sources including territorial governments, private sector and others. Given that the actual total SINED investments added up to $35,681,644 for that period, 96 cents was leveraged for every SINED dollar invested.

Aggregate data is not available for the evaluation period (2012-2017).^{Footnote 10}

Most CanNor staff, government stakeholders and funding proponents reported that SINED funding instilled confidence in other investors. This was the case across all sectors and territories. The majority (85%) of survey respondents reported that they leveraged funding or in-kind contributions from other sources for their SINED-funded projects and over one-half (58%) reported that obtaining SINED funding helped them secure additional capital. Key informants from the geoscience and mining sectors specifically noted the importance of federal support for their sector to leverage funding, with this finding also reflected in the sector case studies. They reported that the SINED-funded geoscience work has brought "big players on board", even during a downturn in the mining sector. Geoscience projects in the North have reportedly increased investor interest and confidence. Key informants from other sectors noted the importance of federal support through SINED funding because it provided "credibility" or "validation" for their projects, increasing the confidence of other investors. SINED funding acted as a trigger for other investors and in some cases, allowed funding proponents to ask for matching funds.

Approximately one-half (46%) of survey respondents reported that their project would not have proceeded without SINED funding, and more than one-third (36%) reported that their project would have proceeded but in a reduced capacity. Overall, SINED funding supported leveraging of other funding sources as investors had more confidence investing in the North when the federal government was also investing.

4.3.6 Input-Output Analysis

SINED invested dollars into many sectors to support Northern economic development. While the total dollars invested by sector is not available for this evaluation period (2012-2017), data is available for the 2009/2010-2013/2014 period. When looking at the total SINED dollars invested between 2009 and 2014, the mining industry received the greatest amount in funding ($23,153,550), followed by tourism ($15,354,341) and small- and medium-sized enterprise support ($10,474,275). The amount of funding invested in each sector between 2009 and 2014 (i.e. over 5 fiscal years) is shown in Table 4.2. Please note that the dollar amounts reported have been adjusted to 2013 values, for consistency of comparison over time and to maintain consistency with the input-output national multipliers used for calculations (Statistics Canada, 2013).

The impacts of direct investments by SINED into the above sectors are likely to be seen across sectors. To better understand the economic impacts of SINED funding, Malatest conducted an input-output (IO) analysis. Sectors identified in Table 4.2 (above) were re-coded to align with NAICS coding to facilitate IO analysis (See Section 3.2.1 for more details).

The use of input-output analysis (IO) allows for the estimation of the total impact of SINED funding, as it estimates not only the direct impacts, but also the indirect and induced impacts as such funding will stimulate further spending in the regional economy. These impacts are commonly referred to as the economic multipliers and examine impacts in terms of sales (output), GDP, and person-years of employment.

For the purposes of this analysis, the SINED funding identified in Table 4.2 above was re-coded to better align with industry (NAICS) classifications that are used in the IO model. As noted previously, such expenditures were also adjusted to be reported in constant (2013) dollars (see Section 3.2.1 for additional details). Further, pan-territorial funds were rolled into territorial totals (i.e., pan-territorial totals were divided by three and added to territorial totals).

The direct impacts, or the direct investments by CanNor through SINED funding, are likely to encourage secondary effects (indirect and induced impacts) on the territorial economies. As highlighted in Table 4.3, each $1 in investments attributed to SINED funding generated an additional $1.71 in total impact across all sectors, and across all territories, on average. The estimated impacts of SINED investments, in terms of additional sales (output), in each territory are shown in Table 4.3.

In addition to the impact on indirect and induced spendings, the IO analysis provides an estimate of the impact of the Gross Domestic Product (GDP) in each territory. As detailed in Table 4.4, the SINED investment of approximately $78.8 million between 2009 and 2014 (2013 dollars) generated a direct GDP impact of $36.4 million. Including indirect and induced impacts, SINED investments are estimated to have generated a further $136.8 million in GDP across the three territories, for a total GDP impact of $173.3 million (2013 dollars).

SINED investments also contributed to significant job creation and employment. While it is estimated that the direct investment of approximately $78.8 million between 2009 and 2014 (2013 dollars) directly supported approximately 293 person-years of employment, inclusion of the indirect and induced impacts suggest that there was a total of 1,426 person-years of employment generated through SINED investments.

Over the five years of investment examined in this input-output analysis (2009 — 2014), a total of 1,426 person-years of full-time employment were created (464 in the Northwest Territories, 509 in Nunavut, 453 in Yukon). In the Northwest Territories, each $1M of SINED funding resulted in a total of 17 jobs created (direct, indirect, and induced). In Nunavut, this ratio was 19 jobs per $1M in SINED funding, and in Yukon it was 18 jobs.

4.4.1 Unintended Outcomes

Key informants from all stakeholder groups (CanNor, territorial government, and funding proponents) were asked to report any positive or negative unintended outcomes of the SINED program. The majority of key informants were not able to comment on unintended outcomes. The few respondents who did provide comments noted:

• Limited ability for long-term planning due to short funding terms (Also see Section 4.4);
• Next steps after feasibility studies were completed were not supported by SINED, meaning successful outcomes did not lead to substantive economic development; and
• Benefits of SINED funding were largely accrued by the South with the North only providing the resources with minimal benefit.

While these unintended outcomes should be interpreted with caution due to the small number of key informants, they provide insight into potential areas for consideration by CanNor.

1.1 Economic Investment and Regional Development in the North

In Canada's North, territorial economies are largely driven by natural resource extraction and development projects (Indigenous and Northern Affairs Canada, 2014). Large mineral deposits, as well as oil and gas resources, can be found in the territories (CanNor, 2016). Projects that extract and develop these resource deposits contribute considerably to Canada's overall economic growth, as well as locally to the communities and territories that they are situated in (CanNor, 2016). Currently, there are 14 mining projects active or in progress in the territories, and one oil or gas project active (Northern Projects Management Office, 2017).

While these large-scale resource-based projects have the potential to generate large amounts of wealth for the territories, the resource dependency of these economies in the North are prone to the boom-and-bust cycle of commodities pricing and resource exhaustion (Southcott and Irlbacher-Fox, 2009). The social and financial costs to communities and governments during resource busts can be great, ranging from increased reliance on income assistance to large rates of out-migration resulting in drastically decreased community sizes as residents leave to find employment elsewhere (Jacobsen and Parker, 2016). In addition to the economic impacts, there is little research that has been done to date on the social impacts of boom-and-bust cycles on local communities although concerns have been raised over issues such as substance abuse, social cohesion, and impacts on traditional Indigenous culture and activities such as subsistence hunting and languages (Southcott et al., 2016).

Within this context, the Strategic Investments in Northern Economic Development (SINED) operates with the goal of strengthening key drivers of Northern economies and promoting sustainable, diversified economies in the territories. SINED is a grant program that offers funds to projects in the North that contribute to four broad objectives of the program: building the knowledge base regarding environmental and social context, and resource development in the North; improving economic infrastructure; developing capacity among governments and private sector organizations to improve skills, support, and systems; and diversifying the Northern economy.

1.2 Investment, Regional Development, and Jurisdictional Issues

The historical precedent of federal investment in regional development and major economic projects was thoroughly researched in the literature review conducted for the previous evaluation of SINED in 2013. In summary, federal investment and support for regional development through economic projects has been undertaken in various forms since the mid-20th century in Canada. Efforts to achieve relative economic parity among regions have been pursued through a number of ways, such as transfer payments and regional development agencies, and are a key aspect of Canadian federalism.

While economic investment and incentive programs are not specifically identified as a service or jurisdictional issue in the Constitution Act of 1982, which lays out the division of provincial, territorial, and federal powers, the Constitution does give the federal government authority for the regulation of trade and commerce in Canada, among a few other issues. This could be interpreted to include investment in economic development programs; to date no significant constitutional challenges have been made to Regional Development Agencies (RDAs) and their work in various regions throughout Canada continues.

2.1 Changes in Governments

2.1.1 Changes in Federal Government Priorities and Strategies
The Canadian Northern Economic Development Agency (CanNor) was created in 2009, followed shortly by the Northern Projects Management Office. Created under a different government, these agencies were formed to help promote, focus, and improve the efficiency of major project development and implementation in the North.

In 2015, the election of a new government resulted in a shift in priorities. Northern priorities and policies now focused more on reconciliation, climate change, and community economic development (Indigenous and Northern Affairs Canada, 2016). The SINED program is compatible with these goals as some of the program's strategic priorities emphasize; program guidelines state that project assessment will pay particular attention to a project's ability to address opportunities that will benefit Indigenous peoples and women, as well as projects that increase community capacity in economic and business development.

2.1.2 Indigenous Land Claims and Self-Government
A positive development for northern and Indigenous economic development has been the finalization and implementation of many modern treaties and Comprehensive Land Claim Agreements across the North. While each agreement is unique, their provisions often include land ownership and management, land harvesting rights, participation in environmental management and measures to support economic development and protect Indigenous cultures. For instance, the Nunavut Land Claims Agreement, finalized in 1993, granted the Inuit of Nunavut title over 350,000 square kilometers, making them the largest Indigenous land owner in Canada.

Funds obtained through the land claim agreements have contributed to the establishment of Indigenous economic development corporations (IEDCs), which are the economic and business development arms of Inuit, First Nations and Métis governments. It is estimated that there are more than 50 IEDCs in the North.

2.2 Economic Changes

2.2.1 Global Demand and Prices for Mining Exports
Although considerable efforts have been made to diversify economies in the North, the territories still rely considerably on mining and other resource extraction activities as major economic drivers. As a result, changes in global prices and demand for minerals and energy can have a considerable impact on economic activity and investment in the North.

In 2015 and 2016, a significant slowdown in global demand for metals and minerals, largely fueled by an economic downturn in China, resulted in decreased economic output from mining activities in the territories (Conference Board of Canada, 2016). However, recent increases in prices for metals and minerals have put Nunavut and the Northwest Territories on track for strong growth in 2017, while Yukon is likely to see a mild contraction (Conference Board of Canada, 2017). Throughout this period of volatility, however, stakeholders in Northern mining operations have maintained that the fundamentals of resource extraction economies in the territories are strong, and long-term growth is expected (Mining Association of Canada, 2014; Conference Board of Canada, 2016). As a result, long-term planning and investment in new or planned projects in the North has not been greatly affected by this downturn. Expectations of economic growth in the mining sector in the territories remain high, and ongoing investment in the sector continues.

2.2.2 Economic Growth and Diversification
Changes in gross domestic product (GDP) since 2012 have shown great variability among the territories, and among sectors. Across all industries, Yukon showed a moderate contraction in 2015 in comparison to 2014 (-5.95%), and the Northwest Territories and Nunavut showed slowed growth (+1.30% and +1.22%, respectively) (Statistics Canada, 2017). However, overall since 2012 all three territories have shown modest to large GDP growth: Yukon, +3.07%; Northwest Territories +9.14%; and Nunavut, +14.24% (Statistics Canada, 2017).

Despite promising GDP growth in the North, the territories still face challenges in diversifying their economies for a robust, sustainable future. In 2012, the economic diversity index for the North was 88.42 (compared to 93.03 for all of Canada); in 2015 this had shown very little change, at 89.05 (CanNor, 2016). In all three territories, the two largest sectors are public administration, and mining, quarrying, and oil and gas extraction. In 2015, information and cultural industries in the territories represented between two and three percent of the total GDP in each of the territories, and agriculture, forestry, fishing and hunting represented less than one percent of the total GDP in each territory (CanNor, 2016).

2.2.3 Trade Agreements
When SINED was last evaluated in 2013, negotiation of the Trans-Pacific Partnership (TPP) trade agreement was still underway. The final agreement among 12 countries was drafted in October 2015, and Canada signed onto the agreement in February 2016. The TPP would have had a substantial positive impact on the mining industry in Canada, as it would have gradually eliminated import tariffs on many minerals and metals among countries that already import such commodities from Canada (Financial Post, 2015). However, following the United States' withdrawal from the agreement in January of 2017, the future of the agreement was unclear; several signatory countries had expressed interest in continuing with a trade agreement absent of the United States' participation (Reuters, 2017). In early 2018, Canada and ten other countries reached an agreement on a new TPP.

In addition to the TPP trade agreement, the North American Free Trade Agreement (NAFTA) is currently undergoing renegotiation discussions among the United States, Mexico, and Canada. Mining and quarrying sectors may not be directly impacted by any changes to a great extent, given that the United States is not a major importer of metals and minerals from Canada; however, oil and gas are among Canada's top exports to the United States. Currently there is one active oil and gas project underway in the North: the Beaufort Sea Exploration Joint Venture Drilling Program in the Northwest Territories (Northern Projects Management Office, 2017). Further, oil and gas extraction activities directly contribute to about 7% of total GDP for the Northwest Territories (Statistics Canada, 2017). While the ongoing negotiation of NAFTA creates uncertainty over trade with the United States, changes to the agreement are unlikely to result in a large impact in the territories.

3.1 Circumpolar Nations

Norway is among the least urbanized of the OECD countries, with only 24% of its population living in predominantly urban areas (OECD, 2016). This aligns with Norway's rural and regional development strategy, which identifies a scattered settlement pattern as a key aspect of Norway's unique cultural heritage to be preserved. In order to support such scattered populations, the national government supports programs to keep communities throughout the country attractive through capacity-building support to municipalities, and digitally connected through market-based development that is kept competitive by public authorities (Norwegian Ministry of Local Government and Regional Development, 2013). Like Canada, Norway faces challenges in what it calls the "action zone" – the northernmost region of the country, which faces issues such as a small population base, a small skilled labour pool, and geographic isolation. Many of the policy approaches that Norway has undertaken in this region target individual citizens for assistance to encourage skills development and settlement in the region. These include a write-down of student loans by up to 10% of the original amount, exemptions from electricity tax on consumption, reductions in personal taxation, and an increase in family allowance (Norwegian Ministry of Local Government and Modernisation, 2015). The Norwegian Government also exempts employers in the action zone from national insurance contributions.

Iceland also experiences low rates of urbanization, with 64% of its population living in intermediate areas. Despite having a population of roughly 330,000, the country has a Strategic Regional Plan (2014-17) that identifies numerous program priorities and initiatives to promote regional development (Parliament of Iceland, 2014). The main goals of the plan are to avoid depopulation of regions, and minimize regional disparities (OECD, 2016). Notably, there is no single agency or ministry responsible for enacting the Strategic Regional Plan; four priority areas, each with several initiatives or projects, are identified, and each initiative has an assigned responsible office. In this way, regional development is not addressed through a single specialized agency, but rather a whole-of-government approach is taken. One of the four priority areas in the Strategic Regional Plan is "Special Measures in Vulnerable Communities". This priority area emphasizes halting population decline in small communities and rural areas, increasing education levels in these communities, and providing support to business enterprises in such communities through subsidies for transportation and energy costs, reduced national insurance contributions to businesses in these areas, and reviewing the agricultural subsidy system in the country.

In 2013, Finland launched its Strategy for the Arctic Region (OECD, 2016). This broad strategy addresses a number of factors in sustainable development in the region, including support for local residents, education, research, infrastructure, environmental concerns, and international cooperation in the Arctic. Like Canada, Finland also constitutionally recognizes the rights of Indigenous peoples (i.e. the Saami), to develop and preserve their language, culture, and traditional livelihoods; as a result, consultation and seeking participation from the Saami is a key aspect of Finland's Strategy for the Arctic Region (Prime Minister's Office, Finland, 2013). Also similar to Canada, key policy areas such as education and health are the purview of sub-national governments (OECD, 2016). Objectives of the Arctic Strategy include enhancing social sustainability and working conditions, enhancing Indigenous peoples' participation in decision-making in matters that affect their status as Indigenous peoples, improving Finnish Arctic expertise (including inter-disciplinary research and investment in education), and supporting the business potential of the Arctic region (including major development projects), among others (Prime Minister's Office, Finland, 2013).

The United States' involvement in the circumpolar region is limited to only one state, Alaska. Due to the division of state and federal powers, as well as the lack of any national regional or rural development strategies in the United States, only the regional and economic development policies of Alaska were examined here (OECD, 2016). Alaska utilizes Alaska Regional Development Organizations – ARDORs – to identify regional development priorities and develop and implement comprehensive economic development strategies (CEDs) (Alaska Department of Commerce, Community, and Economic Development, 2017). Although these CEDs are required to include certain information, such as fact-gathering and identification of potential resources to guide economic development, these CEDs have broad flexibility in identifying regional development priorities and strategies. It is also important to note that, although CEDs can identify community development objectives such as infrastructure improvements, recreation opportunities, and other strategies to improve quality of life for residents in some ways, any larger population-based strategies such as public education or health care initiatives to meet local needs would require negotiation with state-wide bodies.

Introduction

1. Please explain your experience with CanNor's SINED funding program?

Program Relevance

The first section pertains to the relevance of the SINED program to stakeholders, CanNor goals, and the federal government's priorities.

2. Do you feel there is a need for the federal government to support economic development in the North?
3. Without SINED, would there be an impact on the economic development in the North? Please explain.
4. Has SINED funding encouraged collaboration between CanNor, territorial government and Aboriginal communities to support skill development?
5. To what extent does the SINED funding program align with CanNor's strategic objective to encourage diversified, sustainable and/or dynamic economies in the North?

Outcome of SINED

This section will ask questions regarding the outcomes of the SINED funding program.

6. SINED funded projects may result in partnerships between northern organizations and governments. Are partnerships continuing to be created?
7. What would you say are the biggest impacts of SINED in your territory?
8. Do you feel that SINED has been able to increase economic development in your territory?

Effectiveness

This section will ask about SINED's effectiveness and efficiency.

9. Based on your experience and interaction with SINED, how could program effectiveness be improved?
10. Based on your experience and interaction with SINED, how could program efficiency be improved?
11. Are there any alternative approaches to SINED to encouraging economic development in the North?
12. Has CanNor's SINED funding program resulted in any unexpected outcomes (positive or negative)?
    1. If yes, what kind of outcomes?
    2. Who has been impacted by these additional outcomes?

Conclusion and Wrap-up

That concludes all the questions that I have for you today. Do you have any further comments regarding CanNor's SINED program that we have not discussed?

Thank you, once again, for taking the time to speak with me. Your information will be valuable to the program's evaluation, and we appreciate your cooperation.

Introduction

Please explain your experience with CanNor's SINED funding program?

Program Relevance

The first section pertains to the relevance of the SINED program to stakeholders, CanNor goals, and the federal government's priorities.

1. Do you feel there is a need for the federal government to support economic development in the North?
2. Has CanNor's SINED funding influenced whether you would invest in projects in the North?
3. Without SINED, would there be an impact on the economic development in the North? Please explain.
4. To what extent does your project(s) funded through SINED have innovative and 'clean technology'?
5. Has your project(s) funded through SINED created jobs for Northerners?

Outcomes of SINED

This section will ask questions regarding the outcomes of the SINED funding program.

6. Did your funded project create any knowledge products?
   1. What kind of knowledge products?
   2. Were these knowledge projects shared in any way? (E.g., available on the internet, presented at conferences, provided to government)
7. Has SINED funding made it easier to access funding for projects in the North? (E.g., secure additional capital or loans)
8. Has SINED funding encouraged you to participate in other projects in the North? (This may include investments in major projects, expansion opportunities, research or other)
9. What would you say are the biggest impacts of SINED in the North?
10. Do you feel that SINED has been able to increase economic development in the North?

Effectiveness

This section will ask about SINED's effectiveness and efficiency.

11. Based on your experience and interaction with SINED, how could program effectiveness be improved?
12. Based on your experience and interaction with SINED, how could program efficiency be improved?
13. Are there any alternative approaches to SINED to encouraging economic development in the North?
14. Has CanNor's SINED funding program resulted in any unexpected outcomes (positive or negative)?
    1. If yes, what kind of outcomes?
    2. Who has been impacted by these additional outcomes?

Conclusion and Wrap-up

That concludes all the questions that I have for you today. Do you have any further comments regarding CanNor's SINED program that we have not discussed?

Thank you, once again, for taking the time to speak with me. Your information will be valuable to the program's evaluation, and we appreciate your cooperation.

Introduction

1. Please explain your experience with CanNor's SINED funding program?

Program Relevance

The first section pertains to the relevance of the SINED program to stakeholders, CanNor goals, and the federal government's priorities.

2. Do you feel there is a need for the federal government to support economic development in the North?
3. The Government of Canada identified the following priority issues areas in the 2017 Budget:
   • innovation and clean technology;
   • a "clean growth economy";
   • healthier and stronger Indigenous communities; and
   • strengthening relationships with First Nations and Inuit communities.

• Are these priorities weighted when making funding decisions? (E.g., are points assigned when proposals meet a priority area?)
• What percentage of SINED funded projects would include components that align with these priorities?

4. Without SINED, would there be an impact on the economic development in the North? Please explain.
5. Do you feel that SINED funded projects strengthen relationships between SINED stakeholders and communities (e.g., CanNor, INAC, project proponents)?
6. To what extent does the SINED funding program align with CanNor's strategic objective to encourage diversified, sustainable and/or dynamic economies in the North? How are these objectives considered when making funding decisions?

Outcomes of SINED Program

This section will ask questions regarding the outcomes of the SINED funding program.

7. Which of these project types does SINED fund?
   • Geoscience research
   • Research
   • Topographic mapping
   • Resource stock assessment
   • Collection and/or digitization of socio-economic data
   • Sectoral data collection and overviews
   • Feasibility studies
   • Public infrastructure
   • Sectoral strategies
   • Technology clusters
   • Business cases
   • Patents and certifications
   • New product and services
     1. Do these projects result in knowledge products?
     2. If yes, are these products disseminated in any way? Please explain.
8. Have SINED funded projects resulted in or contributed to infrastructure for multi-user or public use? (e.g., transportation arteries, ports, airports, or telecommunication projects)
9. SINED funded projects may result in partnerships between northern organizations and governments. Are partnerships continuing to be created?
10. What would you say are the biggest impacts of the SINED program in your territory?
11. Do you feel that SINED has been able to increase economic development in your territory?
12. If so, has SINED helped contribute to sustainability of benefits of economic development through:
    1. Stimulating entrepreneurship?
    2. The emergence and sustainability of economic activities in sectors such as tourism, geosciences, renewable energy, fisheries, and cultural/traditional sectors?

Effectiveness

This section will ask about SINED's effectiveness and efficiency.

13. Based on your experience and interaction with SINED, how could program effectiveness be improved?
14. Should program parameters be modified in any way to maximize the use of funding for economic development and promoting innovation?
15. Based on your experience and interaction with SINED, how could program efficiency be improved?
16. Is SINED the most efficient and economic way of achieving program outputs (see question 6) and making progress towards the program's outcomes:
    • Expanded, publicly-accessible information;
    • Expanded multi-user economic infrastructure;
    • Increased access to capital;
    • Increased ability of Northerners to respond to economic development opportunities;
    • Increased partnerships with Northern government and organizations;
    • Increased private sector investment and expanding business employment opportunities;
    • Increased sustainability of principle economic drivers;
    • Increased economic development and diversification?
17. Are there any alternative approaches to SINED to encouraging economic development in the North?
18. Has CanNor's SINED funding program resulted in any unexpected outcomes (positive or negative)?
    1. If yes, what kind of outcomes?
    2. Who has been impacted by these additional outcomes?

Conclusion and Wrap-up

That concludes all the questions that I have for you today. Do you have any further comment regarding CanNor's SINED program that we have not discussed?

Thank you, once again, for taking the time to speak with me. Your information will be valuable to the program's evaluation, and we appreciate your cooperation.