Evaluation of the Northern Aboriginal Economic Opportunities Program 2016-17 to 2020-2021

1.1 Overview

The Northern Aboriginal Economic Opportunities Program (NAEOP) is intended to maximize economic opportunities for Indigenous communities, entrepreneurs, and businesses in Canada's territories by enabling them to pursue employment, income, and wealth creation opportunities. NAEOP is delivered through two (2) streams: Community Readiness and Opportunities Planning (CROP) and Entrepreneurship and Business Development (EBD).

This report presents the findings of the evaluation of the Northern Aboriginal Economic Opportunities Program and covers the period from 2016-2017 to 2020-2021. Pursuant to the 2016 Treasury Board Policy on Results and the Financial Administration Act (FAA), this is the second time NAEOP has formally been evaluated. This evaluation examined the relevance, effectiveness, and efficiency of the implementation of NAEOP. 

The report is divided into five sections, including the introduction. Section 2 provides the profile of this program. Section 3 describes the approach and methodology for the evaluation. Section 4 presents the evaluation findings. Section 5 summarizes the recommendations arising from the evaluation.

2.1 Program Context

The Canadian Northern Economic Development Agency (CanNor) is dedicated to fostering a robust and sustainable economy throughout Canada's three territories that benefits all Northerners, including Indigenous Peoples and their communities. In 2009, CanNor was established and given the responsibility of administering Indigenous economic development programs that promote community economic and business development in the North.

In accordance with the December 2021 Mandate Letter to Minister Vandal, the Prime Minister has called upon CanNor to continue its efforts to generate both short- and long-term job opportunities and economic growth, particularly by offering tailored programs, services, knowledge, and expertise that make programming and support accessible to all regions.^{Footnote 1}

The Northern Aboriginal Economic Opportunities Program (NAEOP) is a program aimed at promoting economic growth and job creation. The program was initially developed with four streams as part of the Aboriginal Economic Development (AED) program at Indigenous and Northern Affairs Canada (INAC) before it was transferred to CanNor. In 2014, CanNor consolidated the program into the two funding streams that exist today, one for community-based projects and one for entrepreneur business-based projects. The program provides project funding and core funding^{Footnote 2} to support Indigenous employment, entrepreneurship, and economic development, thus contributing to territorial economic growth and building resilience in Indigenous communities. The transition from four streams to two streams was the subject of the previous evaluation of the program.

The program is supported by a $10.8M annual budget for contributions funding.

2.2 Program Description

The ultimate objective of NAEOP is to maximize economic opportunities for Indigenous communities, entrepreneurs, and businesses in Canada's territories. NAEOP is delivered through two streams, each with its own sub-objectives:

• Community Readiness and Opportunities Planning (CROP): to help Indigenous communities and organizations plan for, and participate in, economic opportunities; and
• Entrepreneurship and Business Development (EBD): to support entrepreneurs to establish or expand their businesses.

Funding applicants can go to a CanNor office or a Service Delivery Partner (SDP) to access the program.

CanNor's logic models for its community development and business development responsibilities are provided in Annex A: Evaluation Logic Model.

2.3 Program Governance

Reporting to the Minister of Innovation, Science and Economic Development, CanNor was established in 2009 to foster growth and development in the North by:

• Delivering economic development programs;
• Collaborating with and aligning the efforts of partners in northern and southern Canada to respond to economic challenges and opportunities in the North;
• Developing a diversified, sustainable, and dynamic economy across Canada's three territories by working with communities, community-based businesses and local entrepreneurs to develop and diversify local economies; and,
• Taking advantage of the strengths of Northern Canada.

With a staff of 109 full-time equivalent^{Footnote 3} (FTE) positions in the territories and Ottawa, CanNor's governance structure is supported by four committees:

• Senior Management Committee;
• Policy, Planning & Operations Committee;
• Extended Management Committee; and,
• Resource Management Committee

NAEOP is complementary to the support provided though programs of general application and Crown Indigenous and Northern Affairs (CIRNA)'s programs of national application.

The Program is supported by the following 2 committees:

• Senior Management Committee:  The Senior Management Committee is the Official-level decision-making committee for all CanNor matters and is chaired by the President;
• Executive Committee: The Executive Committee provides advice and guidance to the President and the Senior Management Committee, and makes recommendations with respect to matters of financial, human resources and overall corporate management, and decision-making, as appropriate.

2.4 Program Delivery

The NAEOP's design reflects the continuous commitment to Indigenous economic self-determination. Through core funding^{Footnote 4} and project funding, NAEOP continues to provide long-term support to Indigenous communities and businesses, thus advancing the Government of Canada's priority of Indigenous Economic Reconciliation.

The CROP fund and the EBD fund are delivered as follows:

2.5 Program Resources

CanNor funding for 2016-2017 to 2020-2021 was set at $10.8 million per year. The NAEOP is supported by an average of 9.0 FTE CanNor positions per year.

For the five-year period of 2016-2017 to 2020-2021, CanNor delivered 152 economic development projects spanning $51.07 million. The average agreement amount per project was $335,991.63.^{Footnote 6}

3.1 Evaluation Scope and Objectives

The objective of this evaluation was to determine the Program's relevance and performance in achieving its expected outcomes in accordance with the Treasury Board Policy on Results.

The purpose of this evaluation was to review:

• NAEOP's relevance to federal government priorities and goals;
• Achievement of expected short-, medium-, and long-term outcomes;
• NAEOP cost-effectiveness and efficiency; and
• Recommendations for future programming.

The scope of the last evaluation was from 2011-2012 to 2015-2016 with the final report made publicly available in May 2018. The scope of this evaluation covered the five years since the last NAEOP evaluation, from 2016-2017 to 2020-2021.

An external consulting firm was engaged by CanNor for the conduct of this evaluation. This evaluation was co-led by the external consulting firm and CanNor, hereinafter referred to as the evaluation team.

3.2 Evaluation Questions

This section outlines the evaluation core issues and evaluation questions.

3.3 Evaluation Approach

This summative evaluation was directed to review all aspects of the NAEOP initiative, including the third-party delivery model.

During the period under evaluation, changes to the Program were implemented in Fall 2022, including the re-implementation of core funding. However, this aspect of the Program occurred outside of the evaluation period of examination and therefore is out of scope. The evaluation team acknowledges the changes, where appropriate, to explain the results.  

The involvement from the evaluation team included working with and seeking input from CanNor staff. CanNor sought external input from Indigenous organizations though the form of engagement sessions in June 2019 and June – July 2022 regarding the possible re-introduction of core funding to the NAEOP as well as opportunities where federal government support could have a greater impact on economic development opportunities in the North. The results of those engagement sessions were considered for this evaluation.

This evaluation was conducted between December 2022 and April 2023 with data collection occurring from January to March 2023.

Multiple lines of evidence were used to respond to the evaluation questions. This evaluation employed a document and file review and key informant interviews. In addition, a Gender Based Analysis Plus was conducted. The findings from each line of evidence were triangulated to minimize bias and validate their consistency.

The Gender-Based Analysis Plus assessed how people from under-represented groups experienced access to financial and capital support differently and identified potential barriers. The analysis considered different identity factors, such as gender, age, education, and geographic location. To support this analysis, individual interviews were sought from a range of key informants.

3.4 Data Collection Methods

This Sub-section describes each of the evaluation methods employed during this evaluation; the methodological challenges that were encountered, if any; and, the solutions that were adapted and used during the evaluation.

3.5 Constraints, Limitations, and Mitigation Strategies

The main limitation in the evaluation process was the lack of readily available program performance information. For the period under review, the majority of foundational documentation for the NAEOP^{Footnote 7} did not exist because there was no official Cabinet document (i.e., Treasury Board Submission and associated Annexes) to inform the implementation of the Program. Previously, the operation of the Program was approved under Ministerial Authority. It is worth noting that most of the documentation received reflected expected results, not actual results. As a result, the evaluation team was not able to definitively conclude on some of the evaluation findings since performance information was either missing or still being collected by the Program.

Following the 2018 evaluation, the Program made efforts to create performance indicators that are more relevant to program outcomes rather than administrative outputs. Nevertheless, the evaluation team observed that performance data might not have been uniformly gathered, tracked, monitored, or reported within the period under review. A few long-term indicators could not be achieved yet due to the frequency of reporting and the longer time horizons required to identify trends. Moreover, as noted earlier in this section, the evaluation team encountered difficulties in obtaining usable performance data. It is anticipated that these issues may be resolved in time for the next evaluation through the development of a Performance Measurement Strategy.

4.1 Relevance

Key finding #1: To enhance the well-being and quality of life of Indigenous Peoples in the territories, it remains crucial to maximize economic opportunities for Indigenous communities, entrepreneurs, and businesses. This is because economic development plays a vital role in achieving these goals.

There are 213 businesses listed in the Indigenous Business Directory in the territories combined, as of March 31, 2022. The Government of Canada recognizes that an effective way to improve the well-being and quality of life of Indigenous Peoples is to improve their economic conditions.^{Footnote 8}

The economic challenges faced by Indigenous Peoples in the territories are intricate and it is difficult to pinpoint a single issue as the most pressing. These issues are highly complex and intertwined with external factors beyond the scope of this evaluation. Moreover, these complex economic conditions include, but are not limited to, high unemployment, lower income levels, lower levels of education, poorer health, and inadequate housing. The legacy of colonization within the context of social exclusion, political, and economic marginalization continues to impact the economic conditions of Indigenous Peoples today.

Ultimately, the Government of Canada recognizes that Indigenous economic development helps strengthen the Canadian economy and advances reconciliation efforts between the Crown and Indigenous Peoples.

The NAEOP plays a crucial role in enhancing economic development support for Indigenous communities, entrepreneurs, and businesses in Canada's territories, thereby contributing to their growth and progress. The Program stands out as a unique source of funding and support for the Indigenous population in the territories, providing services not available through other programs. The evaluation found little evidence of silos between CROP and EBD funding.

According to anecdotal evidence from key stakeholders:

• All interviewees stressed the importance of sustaining and optimizing economic opportunities with the help of the NAEOP. The Program is found to be critical in supporting businesses with the higher costs in the North, with 58% of program recipients stating that their projects or work would not be feasible without the Program's funding.
• 66% of service delivery partners noted that there is significant demand for the Program, and that without this program there would not be as many small businesses operating in the territories.
• Furthermore, each stakeholder group recognized that the Program provides more opportunities for skill development and employment, which is essential to creating economic opportunities for northern youth and contributing to local economies.

Key finding #2: There is a legitimate, appropriate, and necessary role for the federal government in this program due to its involvement in Canada's northern territorial economies.

The territories have a significant concentration of Indigenous Peoples, with 52.8% of the population being identified as Indigenous according to the 2016 Census, versus 4.7% in Canada overall. In the territories, the Indigenous population includes more than 34,000 Inuit, 20,000 First Nation and 4,500 Métis. Additionally, Indigenous enterprises play a crucial part in the northern economy and are part of an increasing number of northern businesses.

NAEOP is the sole funding program exclusively dedicated to Indigenous groups in the North and has been shown to stimulate economic development and community employment in the region. According to interviews with SDPs and CanNor program officials, there is a perceived growing demand for the Program, despite disproportionalities affecting First Nations, Inuit, and Métis populations. This type of programming is essential to the territories given the demographic weight of this population, its unique Indigenous governance structures as well as the socioeconomic realities of Indigenous Peoples.

Indigenous organizations at the regional levels felt a moderate sense of ownership over the Program. This sense of ownership has contributed to the perception of NAEOP being delivered in a culturally-consistent manner. This has been possible because communities are responsible for hiring and training staff and ensuring that they are aware of cultural practices. This approach has been well-received by the communities, and it has helped to build trust and engagement with the Program.

Program recipients noted that the federal government is a very large and impactful actor in the northern economy, thereby reinforcing that there is a necessary role for the federal government in the Program.

Furthermore, some CanNor employees expressed the need to build local capacity for economic development. They suggest that First Nations groups should provide support at the local level, rather than the federal government directly supporting the recipients. In addition, some SDPs noted that they could serve all intended program participants if they received the full pool of funding dedicated to SDPs directly for that region. SDPs noted a perception of CanNor's involvement as competition by serving clients within their regions. It was noted that many program recipients are only familiar with their respective SDPs and are not aware of CanNor's involvement in the Program. Additionally, program recipients noted that NAEOP's program administrators must understand the unique challenges and nuances that are present in the North.

66% of SDP interviewees noted that without this program there would likely not be as many businesses operating in the territories. Indigenous groups expressed a need for assistance and consistency in navigating federal funding including the completion of proposal-based applications. While CanNor is positively viewed as an active federal partner, groups suggested that there is a need for the Agency to increase community visits and provide program information and proposal writing support. Indigenous groups appreciated funding flexibility (e.g., the ability to carry over funding from one fiscal year to another).

In addition, government procurement was identified as an area which could be better leveraged if restructured in a way that encourages smaller companies to compete (e.g., smaller contracts).

Key finding #3: The economic development support provided under NAEOP generally aligns with the priorities of the government and Indigenous communities. However, there is a risk of creating or maintaining disparities between Indigenous and non-Indigenous Canadians due to existing policy and legislative gaps.

The NAEOP's strategic outcome for the Program is to assist Indigenous entrepreneurs, businesses, and communities in the North with economic development opportunities, leading to a strong, prosperous, and stable territorial economy.

The NAEOP's objectives to collaborate and support Indigenous communities, businesses, organizations, and government entities are supported by several federal documents, including the:

• Prime Minister's Mandate Letter to the Minister, which instructs CanNor's Minister to support and invest in economic development by committing to "promote short- and long-term job creation and economic development in the Northern and Prairie regions, particularly through the delivery of regionally tailored programs, services, knowledge and expertise".
• The November 2021 Speech from the Throne "Building a Resilient Economy: A Cleaner & Healthier Future for our Kids" which continues to support economic priorities in Canada to build a better healthier future.
• Northern Lights: A wake-up call for the future of Canada which recognizes that Arctic and northern regions have been neglected by Canada and ensued with enormous challenges that significantly impact communities and individuals. 
• The approval of the NAEOP (NIEOP) TB Submission to provide authority to adjust departmental funding requirements going forward and to approve amendments to the terms and conditions of the Program.
• Pan-Territorial Growth Strategy (PTGS), which details CanNor's plan to advance economic growth over the next five years.

Both the CROP and EBD priorities aim to enhance employment, revenue, and economic development in communities by maximizing the value of locally controlled resources, leveraging external resources, and fostering a supportive business environment.

According to the interview results:

• 81% of CanNor program officials agree that the NAEOP objectives are in line with the Government of Canada's priorities.
• 66% of SDPs and 9% of CanNor program officials perceived there is a lack of ongoing coordination among federal and provincial jurisdictions, which has led to a lack of clarity regarding what services are to be provided, at what service levels, and what legislation applies.
• Both SDPs and CanNor program officials have also acknowledged that gaps created by jurisdictional conflicts contribute to the economic disparities among Indigenous Peoples in Canada. 

Unfortunately, there is no known specific statutory authority for the provision of economic development programs to Indigenous groups by the Government of Canada. The Constitution Act, 1867 to 1982 (Section 36) states that, "Without altering the legislative authority of Parliament or of the provincial legislatures, or the rights of any of them with respect to the exercise of their legislative authority, Parliament and the legislatures, together with the Government of Canada and the provincial governments, are committed to:

1. promoting equal opportunities for the well-being of Canadians;
2. furthering economic development to reduce disparity in opportunities; and
3. providing essential public services of reasonable quality to all Canadians."

Within the legislation there is no explicit power that the Government of Canada ‘must' make a commitment to economic development actions and/or opportunities, let alone Indigenous economic development opportunities, but rather as a whole there is a mention of a commitment to foster equal opportunities for Canadians.

As such, the Government of Canada has agreed to implement the Truth and Reconciliation Commission (TRC) Report recommendations, as well as the United Nations Declaration on the Rights of Indigenous Peoples Act (UNDRIPA). Both instruments provide a roadmap for the Government of Canada and Indigenous Peoples to work together to advance reconciliation.

4.2 Effectiveness

Key finding #4: To a moderate degree, the NAEOP has accomplished its anticipated immediate results and outcomes. However, there is room for improvement in consistent reporting, enhancing capacity for local economic development, and facilitating greater access to commercial financing.

Within NAEOP, CanNor and the five approved SDPs serve as essential program administrators for funding and capital support.

Between fiscal years (FY) 2014-2015 and 2021-2022, CanNor funded an average of 30 projects per year. An average of 138 jobs were expected to have been created during this timeline.

Unfortunately, the evaluation team was unable to get a clear idea of whether there had been a measurable increase in the effectiveness of the program delivery. Quantitative information regarding the actual results of the Program was not made available to the evaluation team.

Through program documentation, the evaluation team concluded that the program's targets are based on current knowledge and knowledge of the context in which the Program is delivered. The following points describe some of the potential key risk areas that may impede or delay the achievement of targets and outcomes:

• Data collection and assessment of NAEOP results – Since projects' results of funds that are received are held with the organization that disperses funding, this presents challenges with obtaining quantitative outcome data. CanNor cites it does not have direct contact with the ultimate recipients of project funding.  
• Data interpretation – Targets that have been established are based on the current context of the Program. Data pertaining specifically to NAEOP is relatively scarce and inconsistent and contains trends specific to each territory making it difficult to interpret in a holistic manner for the Program.
• Individual factors of choices are relatively unknown, such as recruitment, retention, turnover, and the availability of jobs in the labour market. As well, this may influence an individual's decision to enroll or continue training.
• Cultural differences, knowledge gaps, and lack of experience with facilitating culturally competent data collection and reporting may place an undue burden on Indigenous communities and businesses in the North, potentially diverting resources and time away from progressing on project activities.

Despite these challenges, when considering how the Program is currently designed and delivered, the majority of key informants emphasized the positive impact the NAEOP has had on launching new businesses and projects in northern Indigenous communities. However, this is not to say that there is no room to improve. Key informants have identified that consistent reporting, enhancing capacity for local economic development, and facilitating greater access to commercial financing can be improved.

These perceptions are detailed by key stakeholder groups below:

Program Recipients: 50% of program recipients revealed they used funding received through NAEOP to enhance capacity and develop economic development engagements. In particular, 50% noted using NAEOP funding to engage in planning, preliminary studies, or other economic development project preparation/readiness work. About 33% of program recipients noted the ability to enter into economic development partnerships as a result of receiving program funding, particularly with Indigenous associations.

However, only 25% of program recipients noted explicitly that they are content with the level of support received from CanNor through NAEOP. This may indicate that a lack of support for program recipients from CanNor has hindered the achievement of the program's immediate results and outcomes. 58% of program recipients noted NAEOP funding allowed them to launch multiple economic development projects within their communities.

Program recipients also noted varying results regarding their ability to access commercial financing, with about 25% noting they were able to access more funding opportunities as a result of participation in NAEOP.  17% noted that they continue to face challenges with access to commercial funding outside of what was provided through NAEOP.

CanNor Employees: 45% of CanNor employees noted that NAEOP funds were used to enhance capacity by expanding businesses in northern communities. However, some challenges were noted for Indigenous governments and northern communities in planning for the economic development of their community, including a lack of training and education on economic development planning, lack of key infrastructure, and the fact that economic development has historically been a function performed by external actors to these communities.

Regardless, 82% of CanNor employees noted that they were able to provide support to northern Indigenous entrepreneurs and businesses for the development of economic development projects in the North through NAEOP. Some CanNor employees attributed their support to the flexibility of the Program, particularly in their ability to provide multi-year agreements to northern Indigenous entrepreneurs and businesses. Additionally, 73% of CanNor employees noted that support received through NAEOP's funding allowed northern Indigenous entrepreneurs and businesses to launch multiple economic development projects which have resulted in the strengthening of existing northern Indigenous businesses, as well as the creation of new ones. However, 27% of CanNor employees mentioned that the removal of core funding^{Footnote 9} from the Program reduced their ability to support northern Indigenous entrepreneurs and businesses, particularly in Nunavut.

CanNor employees also noted varying results for program recipients regarding their ability to access commercial financing, with about 18% noting that program recipients were able to access more funding opportunities as a result of participation in NAEOP. Others noted that program recipients continue to face challenges with access to commercial funding outside of what was provided through NAEOP.

Service Delivery Partners: All SDPs noted that they are able to effectively support northern Indigenous entrepreneurs and businesses in both start-up and expansion phases. Additionally, all SDPs noted that NAEOP's funding allows northern Indigenous entrepreneurs and businesses to expand and pursue economic development opportunities which would otherwise be inaccessible to them.

Key finding #5: To a moderate extent, the NAEOP has achieved its anticipated intermediate results and outcomes. The NAEOP has provided certain Indigenous Northerners with chances to address economic development and employment prospects.

Most of the NAEOP’s administrative guidelines and interpretations were inherited from CIRNA. Following the 2017 NAEOP evaluation, one of the major findings was to include performance indicators around the effectiveness of the Program. As a result, the Program has been updated to measure these intended outcomes.

Economic Development Effectiveness Statistics:

Between Fiscal Years (FY) 2016-2017 and 2020-2021, CanNor funded an average of 30 projects per year, which resulted in the creation/expansion of 21 northern Indigenous businesses across 15 communities. In addition, an average of 160 jobs were expected to have been created during this timeline.

Unfortunately, the evaluation team was unable to get a clear idea of if there had been a measurable increase in the effectiveness of the program delivery as actual results of the Program were difficult to obtain.

There is evidence of the Program implementing the recommendations from the previous evaluation, such as how the Agency could support community economic development capacity.^{Footnote 10} Outlined in Figure 1 is a summary list of the basic functions of a community economic development organization. Options to re-introduce core-funding were examined, however, the analysis of this aspect of the Program falls outside the scope of the evaluation.

The Program does appear to yield a positive impact on the community's overall economic and social well-being. 42% of program recipients who received the funding revealed that NAEOP funding allowed for the creation of learning and training opportunities for community members to enhance local economic capacity. Half of program recipients saw the Program as an opportunity to increase/maintain employment in the North as a result of this program. However, program recipients noted varying results regarding the enhancement of northern economic infrastructure through NAEOP, citing that depending on the project to improve and/or develop and/or acquire infrastructures is a timely pursuit that may take years to realize or see the gain. Generally, participants argued that funding should be linked to the specific needs of an Indigenous group. Program recipients also saw a need to better coordinate funding opportunities across federal departments and noted that it was sometimes difficult to distinguish among federal programs.  

27% of CanNor employees noted that Indigenous communities in the Yukon were able to develop unique businesses which were not previously present in the territory. Similar to program recipients, CanNor employees noted varying results regarding the enhancement of northern economic infrastructure through NAEOP, with 18% noting that northern infrastructure was improved/developed as a result of program funding. Others (18%) noted that there is a lack of infrastructure to support economic development in the North.

Furthermore, all SDPs noted that NAEOP funding allowed program recipients to expand marketing, capital assets for Indigenous businesses, and explore other smaller economic opportunities within the community.

Key finding #6: To a moderate degree, it appears that NAEOP is making strides towards accomplishing its intended ultimate goals and objectives. However, because these goals are long-term and require significant transformation in the North, it is challenging to accurately determine the extent to which NAEOP has effectively achieved its ultimate results and outcomes at this point in time.

Program targets are developed based on the Program's current knowledge and context, as outlined in the performance measurement strategy, which may be updated as needed to ensure their relevance and effectiveness. Although many of the targets appear to be aligned with the Program's goals, a rigourous examination of these targets in the future would be required.

The consensus of CanNor program officials, SDPs, and program recipients is that the NAEOP allowed for Indigenous entrepreneurs, businesses, and communities to benefit from northern economic growth and participate in the northern economy. Some of the key observations from stakeholders included:

• Program Recipients: 50% of program recipients noted that they benefited from northern economic growth and were able to fully participate in economic development opportunities.
• CanNor Employees: 45% of CanNor employees noted that a variety of northern communities and business types benefited from NAEOP, contributing to economic diversification in the North.
• Service Delivery Partners: All SDPs noted that projects of program recipients span over a variety of northern communities and business sectors, increasing economic diversification in the North.

One of the frequent concerns raised by stakeholders regarding the impact of the NAEOP on Indigenous economic development in Canada's territories is the difficulty in measuring the extent of its benefits to communities (i.e., benefit realization) as several factors can hinder economic development in the territories^{Footnote 11} , including:

• Geographic isolation: The territories are vast and sparsely populated with many remote and isolated communities. This makes it challenging to build and maintain infrastructure, transport goods, and attract investment.
• Harsh climate: The Arctic and subarctic regions in the territories have harsh climates, which can make it challenging to grow crops or conduct other economic activities. The high cost of living and limited access to fresh food and basic necessities are also challenges.
• Limited access to education and training: Many communities in the territories have limited access to education and training programs which can hinder the development of a skilled workforce.
• Inadequate infrastructure: Poor conditions and limited access make it challenging for Indigenous communities and businesses to access the resources they need to improve their lives and build sustainable, prosperous economies.
• Limited economic diversity (current): Many communities rely on a few key industries, such as resource extraction or tourism, which can be vulnerable to market fluctuations and other external factors.

In addition to this, respondents have identified several challenges that seemingly impede the achievement of long-term goals and outcomes.

One of the challenges identified is the plateauing of funding levels since the Program's inception in 2014. Consistently, funding has remained at $10.8 million for the Program, and as such, the Agency undertakes the responsibility to allocate adequate financial resources for the effective management of the contribution program.^{Footnote 12} Of note, in a recent announcement in the Budget 2021, the launch of a $150 million Indigenous Growth Fund was publicized. The fund is designed to provide capital to Aboriginal Financial Institutions, which in turn, will ultimately support Indigenous businesses and entrepreneurs to launch and grow.

Another challenge is the increasing demand for funding, which is attributed to demographic shifts resulting in increased project needs. Respondents also noted that there are very few financial institutions in the North, making it increasingly difficult to obtain capital due to perceived capacity and resource constraints. Additionally, communication and coordination with other financial actors are identified as a challenge, further complicating the process of obtaining funding.

All these factors, combined with a legacy of colonialism and ongoing systemic discrimination, contribute to the continued disadvantaged experience by Indigenous population in the North. However, Indigenous communities in the North seemingly appear to be working towards addressing these challenges and developing sustainable, self-determined economies and communities. 

4.3 Efficiency

Key finding #7: Of the available information, there is evidence that NAEOP is making progress towards achieving its intended outcomes at present.

For the evaluation period under review, the evaluation team examined financial information obtained from CanNor. The Program reported that all 73 communities in the territories (15 in Yukon, 33 in NWT, and 25 in Nunavut) received NAEOP funding (via a contribution agreement) between the FY 2016-17 and FY 2020-2021 period. An average of 138 jobs were expected to have been created during this timeline. A total of 152 NAEOP projects spanning $51.07 million were funded during this time-period.

• The fiscal year where the highest number of projects were implemented was during the 2017-2018 fiscal year - a total of 36 projects. A total of $9.25 million was used for funding projects during this fiscal year.
• The highest value of projects implemented in a fiscal year was during the fiscal year 2018-2019. A total of $19.7 million was awarded to 34 projects during this fiscal year.

Between the FY 2016-17 and FY 2020-2021 period, CanNor funded an average of 30 projects per year. The average agreement amount per project was approximately $336K.

Based on conversations during interviews with CanNor and SDPs and a review of program documentation, the evaluation team noticed several themes that could delay targets and outcomes being achieved, such as:

• The scarcity and inconsistency of data used to establish targets, particularly concerning the difficulty to interpret specific trends from the territories more broadly. This was also discussed with CanNor program officials and SDPs;
• Challenges in obtaining quantitative outcome data from individual learners. For example, there are varying views about what "success" looks like and what determinates should be included; and
• Factors impacting individual choices, for instance the expected availability of jobs which may influence an individual's decision to enroll in training or continue training.

Summarized evidence by stakeholder group:

• Program Recipients: 41% noted they experienced challenges in working with CanNor due to the lack of staff capacity and understanding of the business environment, culture and lifestyle of the Northern territories. 33% noted that some aspects of the application process, such as providing program budgets, are challenging and/or cumbersome. Other areas of concern noted by program recipients included limited support from CanNor after receiving initial funding, funding constraints due to misalignment between local community needs and program outcomes, and a lack of efforts to raise awareness of available funding.
• CanNor Employees: 45% of CanNor staff acknowledge the challenges faced by program recipients due to the lack of staff capacity and turnover, which can lead to delays and difficulties in communication with program recipients. CanNor employees note that staff shortages can impact the ability to follow-up on projects and retain knowledge.
• Service Delivery Partners: All SDPs acknowledged their limited resource capacity to meet the increasing demands for economic development. Nevertheless, SDPs discussed their capability to comprehend the needs of local communities and offer practical assistance to their clients. The SDPs also mentioned they encounter staffing and turnover issues as part of their challenges.

Key finding #8: The majority of key informants found various aspects of the Program including funding, application process, outreach, reporting, and understanding of local communities could be improved in program design and delivery. 

All interviewed stakeholders (internal and external) emphasized that the funding allocation, the distribution of funds, and the allocation of resources to different territories could be improved.

External Factors Impacting Program Success

In areas where inflation has a notable impact, limited funding is particularly exacerbated by the elevated living expenses and increased material and resource costs in the North. From 2016 to 2021, the average hourly wage inflation in Canada for Indigenous populations was 3.25%.^{Footnote 13}  A few key informants emphasized that the current levels of funding fail to consider inflation adequately. Some communities had to dedicate a percentage of their own-source revenue to project expenses because they were unable to afford them due to the escalating costs. Additionally, a few interviewees noted that the rising expenses also posed a challenge to managing regional budget allocations. A few interviewees noted that federal funders should also understand the challenges and costs of working in the North (e.g., per capita funding may be insufficient given the higher business cost environment, or the funding cycle may not match northern realities such as the shorter building season).

Coordination of Design and Delivery

Participants also saw a need for strong coordination of funding across federal departments and noted that it was sometimes difficult to distinguish among federal programs. This can make it difficult to know who to apply to.  

Key observations from stakeholders:

Program Recipients: Feedback included suggestions for continuing flexibility offered using multi-year agreements, funding more local community-focused projects, consistency in reporting, and better education around the application process as potential improvements to consider that could improve the Program's delivery.

CanNor Employees: Feedback included suggestions for more funds to cover the high costs of delivery in the North, core/flexible funding to align with CanNor's objectives, more data analysis to better understand program performance, and more outreach to promote the Program and build stronger relationships with communities. CanNor employees also suggested streamlining the application process to reduce the time it takes to process multiple applications.

Service Delivery Partners: Feedback included concerns about confusion and overlap when CanNor has taken over responsibilities from local organizations, suggestions for more funds to be distributed to program recipients, the need for a consistent application process, and the importance of promoting the Program and building strong relationships between CanNor and SDPs.

All groups of stakeholders who were interviewed shared the perception that the current funding allocation was inadequate to achieve the desired level of results, particularly in certain regions. They believed that there was room for improvement in how the funding was distributed in order to enhance the expected outcomes.

Annex A: Evaluation Logic Model

This Annex demonstrates the logic models developed by CanNor related to Community Development and Business Development.

Logic Model - Community Development (2019-20)

Text alternative for Community Development (2019-20)

A diagram of logic model for Business Development programs at CanNor, developed in 2019-2020.

The diagram is classified into six classes: inputs, activities, outputs, immediate outcomes, intermediate outcomes and ultimate outcomes.

The process begins with inputs which leads to an activity/ activities and then the outputs in the form of projects. Afterwards, performance outcomes are established with outcomes being set for the immediate term, short term and long term.

Under Inputs you have CanNor FTEs and G&C funding as well as interest, capacity, and financial contribution from proponents and partners.

Under Activities you have: Call for project proposals, partnership building, review project proposals, services. Under Outputs, you have three project categories:

• Projects with territorial education institutions (NABEP)
• Projects with Indigenous proponents/Communities (NABEP, NICI, QIA)
• Projects with Territorial Governments (NICI)

Under Immediate Outcomes you have:

• Increased availability of basic education, training and capacity development support for working-age Indigenous Northerners (NABEP, NAEOP CROP, Pilimmaksaivik, QIA) (Outcome of Projects with territorial education institutions)
• Northern Indigenous entrepreneurs and businesses are provided with capital and business services to facilitate business activity (NAEOP EBD) (Outcome of Projects with Indigenous proponents/Communities)
• Northern Indigenous governments and communities have the capacity and economic infrastructure to pursue and participate in economic development opportunities (NAEOP CROP) (Outcome of Projects with Indigenous proponents/Communities)
• Communities and individuals are supported to develop innovative solutions for a wide diversity of issues in the territorial food system (NICI) (Outcome of Projects with Territorial Governments)

Under Intermediate Outcomes you have:

• Indigenous Northerners have foundational knowledge and skills to pursue and respond to economic and employment development opportunities (Outcome builds on Increased availability of basic education, training and capacity development support for working-age Indigenous Northerners)
• Investments in community and business Indigenous economic development lead to improved employment opportunities for community members and a strengthened Indigenous economic and business sector (Outcome builds on Northern Indigenous governments and communities have the capacity and economic infrastructure to pursue and participate in economic development opportunities)
• Northern communities have better economic and physical access to nutritious food produced within the territorial food system (Outcome builds on Communities and individuals are supported to develop innovative solutions for a wide diversity of issues in the territorial food system) (NICI)

Under Ultimate Outcomes you have: Indigenous communities, businesses, entrepreneurs and individuals benefit from Northern economic growth and fully participate in it

Logic Model - Business Development (2019-20)

Text alternative for Community Development (2019-20)

A diagram of logic model for Business Development programs at CanNor, developed in 2019-2020.

The diagram is classified into six classes: inputs, activities, outputs, immediate outcomes, intermediate outcomes and ultimate outcomes.

The process begins with inputs which leads to an activity/activities and then the outputs in the form of projects. Afterwards, performance outcomes are established with outcomes being set for the immediate term, short term and long term.

Under Inputs you have CanNor FTEs and G&C funding as well as interest, capacity, and financial contribution from proponents and partners.

Under activities you have: Call for project proposals, partnership building, review project proposals, services.

Under Outputs, you have three categories which are:

• Projects with not for profit proponents (SINED, EDI, CMAPS, IDEANorth)
• Projects with businesses and entrepreneurs (SINED, NAEOP EBD, REGI, WES, IDEANorth, CEF)
• Projects with proponents dedicated to supporting entrepreneurs and businesses (e.g. scale up, innovation and women entrepreneur support) (NAEOP EBD, REGI, WES, IDEANorth)
• Projects with proponents dedicated to supporting regional ecosystems (REGI, IDEANorth)

These activities then feed into the outcomes which are as follows:

Immediate:

• Northern governments and not-for-profit organizations are provided with support and information to create and respond to economic development opportunities (outcome of Projects with not for profit proponents)
• Northern entrepreneurs and businesses are provided financial support to adopt innovative business and commercialization approaches (outcome of Projects with businesses and entrepreneurs)
• Northern entrepreneurs and businesses are provided non-financial support to adopt innovative business and commercialization approaches (outcome of Projects with proponents dedicated to supporting entrepreneurs and businesses (e.g. scale up, innovation and women entrepreneur support)
• Regional Innovation Ecosystems are supported to grow (outcome of Projects with proponents dedicated to supporting regional ecosystems)

Intermediate:

• Increased northern economic development and diversification and enhanced economic infrastructures (outcome builds on Northern governments and not-for-profit organizations are provided with support and information to create and respond to economic development opportunities)
• Northern businesses representing all segments of the Northern society are innovative, competitive and growing (outcome builds on Northern entrepreneurs and businesses are provided financial support to adopt innovative business and commercialization approaches and Northern entrepreneurs and businesses are provided non-financial support to adopt innovative business and commercialization approaches)
• Regional Innovation Ecosystems are strong, dynamic and inclusive (outcome builds on Regional Innovation Ecosystems are supported to grow)

Which leads to the ultimate outcome:

Strong, dynamic, diverse, innovative and inclusive territorial economies for the benefit of all Northerners and Canadians

Annex B: Bibliography

• Government of Canada; Canadian Northern Economic Development Agency. (2021, November 23). Canadian Northern Economic Development Agency (CanNor) - 2020-21 departmental results report. Government of Canada; Canadian Northern Economic Development Agency. Retrieved March 20, 2023
• Government of Canada; Canadian Northern Economic Development Agency. (2018, August 30). Formative Evaluation of the Northern Aboriginal Economic Opportunities Program 2011-2012 to 2015-2016
• Government of Canada; Canadian Northern Economic Development Agency. (unknown). Budget/Off-Cycle Proposal
• Government of Canada; Canadian Northern Economic Development Agency. (September 2020). Key Program Delivery components: NAEOP vs. IDEANorth
• Government of Canada; Canadian Northern Economic Development Agency. (April 2022). NAEOP Supporting community economic development capacity through NAEOP
• Government of Canada; Canadian Northern Economic Development Agency. (April 2022). NIEOP NABEP Treasury Board Submission
• Government of Canada; Canadian Northern Economic Development Agency. (Winter 2017). NAEOP Terms and Conditions
• Government of Canada; Canadian Northern Economic Development Agency. (Summer 2019). NAEOP – What we Heard– 2019 Engagement
• Government of Canada; Canadian Northern Economic Development Agency. (September 2022). NAEOP – What we Heard and Implementation Report – August 2022
• Government of Canada; Canadian Northern Economic Development Agency. (2019). Pan-Territorial Growth Strategy. ISBN: 978-0-660-31755-7
• Prime Minister of Canada - Premier ministre du Canada. (2021b, December 16). Prime Minister of Canada Mandate Letter - Canadian Northern Economic Development Agency
• Government of Canada; Canadian Northern Economic Development Agency. (2019). NAEOP Program Guidelines: Annex 2: GBA Plus Departmental Summary
• Government of Canada; Canadian Northern Economic Development Agency. (2020). NAEOP Program Guidelines
• Government of Canada; Canadian Northern Economic Development Agency. (2020). NAEOP – EBD Program Guidelines
• Government of Canada; Canadian Northern Economic Development Agency. (2018). NAEOP – CROP Program Guidelines
• Government of Canada; Canadian Northern Economic Development Agency. (2019). NAEOP Program Information Profile (January 2021)
• Government of Canada; Canadian Northern Economic Development Agency. (2019). NAEOP Program Information Profile – EBD  (2021)
• Government of Canada; Canadian Northern Economic Development Agency. (2019). NAEOP Program Information Profile – CROP (2021)
• Government of Canada; Canadian Northern Economic Development Agency. (2019, August 22). Pan-Territorial Growth Strategy: Working together for a better future
• Government of Canada, Department of Justice, Electronic Communications. (2023, March 21). Implementing the United Nations Declaration on the Rights of Indigenous People Act
• Government of Canada; Indigenous Services Canada. (2014, July 21). Procurement Strategy for Aboriginal Business
• Government of Canada, Senate of Canada. (n.d.). Northern Lights: A wake-up call for the future of Canada. SenCanada
• Legislative Services Branch. (2020, August 7). Consolidated federal laws of Canada, THE CONSTITUTION ACTS, 1867 to 1982
• Government of Canada, Statistics Canada. (2020, October 2). Aboriginal Peoples Highlight Tables, 2016 Census
• Government of Canada, Statistics Canada. (2023, January 6). Average hourly and weekly wages and average usual weekly hours by Indigenous group, inactive
• Office, P. C. (2021, December 1). 2021 Speech from the Throne. Canada.ca
• TRC. (2015). Truth and Reconciliation Commission of Canada: Calls to Action (PDF)