Northern Ontario Needs Regional Control and Decision Making to Economically Prosper – by David Robinson

Established in 1980, Northern Ontario Business  provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.  Dave Robinson is an economist with the Institute for Northern Ontario Research and Development at Laurentian University. drobinson@laurentian.ca His column was published in the October, 2010 issue.

We all wonder why some resource-rich regions like Alberta and Saskatchewan do so much better than other resource-rich regions like Northern Ontario.  And why do some boreal regions, like Sweden, Norway and Finland become rich, creative powerhouses while young people flee others – like Northern Ontario? – David Robinson

Are you old enough to remember Van Morrison’s “Days Like This”? The song has a wonderful line about days when “all the parts of the puzzle start to look like they fit.” It was one of those days when I stumbled on a study from Harvard that answered some questions about Northern Ontario for me.

We all wonder why some resource-rich regions like Alberta and Saskatchewan do so much better than other resource-rich regions like Northern Ontario. And why some communities without resources – think of Singapore and Denmark, and Holland – do well and others basically go nowhere. And why do some boreal regions, like Sweden, Norway and Finland become rich, creative powerhouses while young people flee others – like Northern Ontario?

Now I know some people think Northern Ontario is doing pretty well – and we darned well should be. We are in the early stages of the biggest worldwide resource boom ever. Treading water in this economy is probably easier than sinking.

But it is a real puzzle that a region as rich in resources as Northern Ontario isn’t developing. In fact, population is declining over most of the region, and especially in the west of the province. There are lots of talented people: why can’t we run the region as well as the Finns or the Norwegians?

The Harvard Project on Indian Economic Development set out to identify the factors critical to the economic success for Indians in the USA. Obviously, some of the lessons should apply to our Canadian First Nations, and they do. Less obvious, but just as important, the lessons apply to all of Northern Ontario. In “Sovereignty and Nationbuilding: the Development Challenge in Indian Country Today,” Stephen Cornell and Joseph P. Kalt looked at some surprising successes.

The Mississippi Choctaws, for example, have become one of the largest employers in the state of Mississippi. Thousands of non- Indians migrate onto the reservation every day to work in the Choctaws’ manufacturing, service, and public sector enterprises.

The White Mountain Apaches have a timber operation that is one of the most productive in the western United States. It regularly outperforms private operators like Weyerhaeuser. Apache enterprises have become the economic anchor of the economy of east-central Arizona. Towns there look to the Apaches as the motor force that pulls them through the winter, and as a major player in the regional economy.

In Montana, the tribes of the Flathead Reservation have built a successful private sector economy based on tourism, agriculture, and retail services. Unemployment on the Flathead Reservation is often lower than in the rest of rural Montana. The tribal college gets non-Indian applicants who want the quality of education the Flatheads provide.

For almost 10 years, the Harvard crew have been trying to figure out why these communities succeeded and others failed. It turns out that economic success for reserves in the USA is not based on location or private property or resource wealth. Cornell and Kalt make a pretty convincing case that it’s real decision making authority that is the key to development. First Nations have to have the ability to make decisions, take responsibility for those decisions, and set a strategic direction.

Cornell and Kalt call this a “nation-building” approach. “Nation building” in this case doesn’t mean setting up a separate country. It does mean setting up organizations and institutions that answer to the local people. It means having the power to set your own rules and to enforce them. It means having control of your own resources and hiring your own bureaucracy.

The professors list five pieces of the “nation building” puzzle. The people need stable institutions and policies. They need fair and effective ways to resolve disputes. They need to separate politics from business management. They have to have a competent bureaucracy. And they have to have a “cultural match.” The organizations have to fit the people.

These are all things that First Nations in Northern Ontario have been asking for.

They are things that many Northerners have been asking for. Why not get together to do some Harvard- style nation-building for everyone who lives in the region, and not just a small and special minority?

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