29/09/2014 Economic Development Investment Strategies September 2014 CANDO National Conference Travis Seymour, Chris Hild, and Robert Campbell Page 1 We acknowledge the traditional Coast Salish Territory Page 2 1
29/09/2014 Discussion Topics • Introductions and Expectations • Opportunities for Investment • Corporate Investment Planning • Discussion on First Nations ‘Equity’ and ‘Financing’. • Next Steps Page 3 Introductions • Travis Seymour • Chris Hild • Rob Campbell Page 4 2
29/09/2014 Founded in1945, In BC, MNP has MNP is now the more than 450 6 th largest staff located in 16 chartered offices across the accountancy and province business advisory firm in Canada We serve more MNP has over 75 Aboriginal clients in offices and 3,000 Canada than any team members other CA and across Canada advisory firm Page 5 Expectations • As planners or economic development officers, learn about what is a ‘Corporate Investment Plan’, and how it can be used to help formulate economic development strategies. • Learn about different methods of financing economic development ventures. Page 6 3
29/09/2014 OPPORTUNITIES FOR INVESTMENT Page 7 New Landscape of Opportunity • Investment Interest • First Nations Title Victory: Tsilhqot’in • Major resource projects ruling • Aboriginal tourism Page 8 4
29/09/2014 Increase in Economic Activity – Examples include: • Oil & Gas: Alberta and BC • Mining Activity: Northern Ontario • Forestry • Fishing • Tourism • Shipbuilding: East Coast Page 9 Economic Self-Sufficiency • Balancing growing community needs with transfer funding from Fed/Prov . sources • Increased need for Own Source Revenues Page 10 5
29/09/2014 Community Needs • Unemployment Levels • Education Levels • Income Levels • Housing and Infrastructure • Business Development Page 11 Group Participation (Part 1) • On a piece of paper, write down some of the business opportunities that your community is considering (large or small). • Pass the paper on to the group facilitator. Page 12 6
29/09/2014 CORPORATE INVESTMENT PLAN Page 13 Corporate Investment Plan • Overview: What is it? – Nations have a number of projects/investments to consider: • E.g. Energy, Forestry, Infrastructure, Tourism – Usually can’t fund all projects, requiring projects to be prioritized – Therefore, review priority projects based on quantitative (economic) and qualitative (community fit) metrics Page 14 7
29/09/2014 Corporate Investment Plan • Why Do It? – Maximizes return on investment within community priorities – Helps build consensus and support for projects – Develops a framework to measure future opportunities – Better prepared for funding applications Page 15 Corporate Investment Plan 1. Review • Approach to Opportunities create a Corporate 2. Assess for Investment Plan: Project Economics 3. Assess for Community Fit 4. Rank Projects & Consider Synergies Page 16 8
29/09/2014 Corporate Investment Plan • Sector of interest 1. Review • Opportunity timeframe Opportunities – Current – Future 2. Assess for Project Economics – Long-term • Influenced by community 3. Assess for plans Community Fit – Economic development strategies 4. Rank Projects & – CCP’s Consider Synergies – Community engagement Page 17 – Secondary industry research Review Opportunities Example Sector Opportunities Sector Energy Fisheries Forestry Mining Tourism Construction Other Opportunities 1) IPP Projects 1) Community Store and 1) Company investment 2 1) Campground 1) Transmission Line Gas Bar Management Services Project Current Operations 2) Energy Related 2) Stock Assessment 1) Forestry Limited Co. 2) Natural Resource Contracting 2) Current Lodge 2) x Construction & Management - Manage Opportunities 3) Ice Production Operations Consulting Ltd. Forest Tenure 1 1) Future Forestry 1) Aquaculture/Salmon Limited Co. Operations Enhancement 1) Transmission Line 1) Health Centre 2) Log Turning 1) Additional lodge Construction (Proposed 2) Added Value Fish investment JV) 2) Natural Resources Future Opportunities 3) Further Engineering, 1) x project investment Products Management / Road Building, and Other 2) Renovate lodge 2) x Nations Construction Contracting Contracting 3) Logistics Services with & Consulting Ltd. Opportunities Opportunities Project Partners 1) Eco-Centre 1) Scientific showcasing fish program Investigations 2) Partnership 1) Future IPP Projects in 1) Partnership with other 1) Aggregate mining 1) Green Landfill / Long-Term Opportunities 2) Habitat Stewardship Opportunities the Territory companies opportunity composting idea Page 18 3) Elementary-Level 3) Observatory Conservation School 4) Sport Fishing 9
29/09/2014 Corporate Investment Plan • Approach - take expected: 1. Review Opportunities – Capital investment, capital sources, and forecasted future net income 2. Assess for Project Economics • Provide analysis for: – Total profits 3. Assess for – 10-year Internal Rate of Community Fit Return – Return on assets 4. Rank Projects & – Return on equity Consider Synergies – Leverage (debt/total capital) Page 19 Project Economics Example 3 4 Strength of Future Cash Flows Evaluation Criteria 10-Year Return Return on Assets Debt/Capital Risk (Highest Profits (5 years) Return on Equity Total Score Rank (Year 5) Ratio to Lowest) Opportunity $1,720,000 0% 0% 0% 0% 2 1.245084093 2 Future Forestry Ltd. Forestry $525,000 0% 0% 0% 0% 3 -2.431177307 3 Engineering/Road Building $489,250 9% 19% 25% 25% 15 -17.3165565 11 Log Turning Energy $2,160,000 2% 14% 14% 0% 1 5.864561303 1 IPP Additional Equity $2,174,344 6% 17% 19% 11% 17 -14.20754673 10 EcoLodge and RV Park Tourism Future $109,000 7% 15% 15% 0% 12 -10.88011215 8 Renovation of lodge Opportun Aquaculture/Salmon Enhancement $120,000 0% 5% 0% 100% 13 -34.50328156 13 Fisheries $444,600 0% 44% 0% 100% 14 -30.54054054 12 ities Added Value Fish Products $200,000 80% 40% 80% 50% 11 -8.024375888 6 Logistics Services Transmission Line Construction $625,250 0% 0% 0% 0% 10 -10.45676094 7 Construction $0 0% 0% 0% 0% 4 -4.705882353 4 x Nations Construction $2,390,200 -12% 5% 5% 0% 16 -13.71249726 9 Health Centre Other Natural Resource Management $147,500 0% 0% 0% 0% 5 -5.573801356 5 1 2 Page 20 10
29/09/2014 Corporate Investment Plan • Does the opportunity 1. Review meet community fit? Opportunities 1. Culture 2. Environment 2. Assess for Project Economics 3. Partnerships and relationships 3. Assess for 4. Profile of Community Fit organization 5. Employment 4. Rank Projects & 6. Community support Consider Synergies 7. Increase asset base Page 21 Group Participation (Part 2) • As a group help us to 1. Culture select 4 items from 2. Environment the list of community 3. Partnerships and relationships fit criteria. 4. Profile of • We will use these organization criteria to assess 3 5. Employment business 6. Community support opportunities. 7. Increase asset base Page 22 11
29/09/2014 Community Fit Example Builds Important Partnership / Relationship 3 Qualitative Criteria Council / Commmunity Support Increases Capacity / Profile Within Current Capacity Increases Asset Base Environmentaly Safe 4 1 2 Employment Sustainable Cultural Fit Score Rank Opportunities Future Forestry Ltd. 3 3 1 2 3 2 3 3 3 23 2 Forestry Engineering/Road Building 1 3 1 3 2 1 3 2 2 18 8 Log Turning 2 1 2 2 2 1 2 2 1 15 12 Energy IPP Additional Equity 3 3 3 3 3 3 1 2 3 24 1 EcoLodge and RV Park 2 1 3 1 2 2 2 1 1 15 12 Tourism Renovation of lodge 2 3 3 2 2 2 2 3 2 21 4 Future Aquaculture/Salmon Enhancement 2 2 2 2 2 2 2 2 2 18 8 Opportunities Fisheries Added Value Fish Products 3 1 1 2 2 3 2 3 2 19 6 Logistics Services 2 1 1 3 2 2 2 3 2 18 8 Transmission Line Construction 3 1 1 3 2 2 3 2 2 19 6 Construction x Nations Construction 2 3 1 3 2 2 3 2 2 20 5 Health Centre 2 1 3 2 3 2 1 2 1 17 11 Other Natural Resource Management 3 2 1 3 3 3 3 3 2 23 2 Legend Page 23 Colour Score 3 2 1 Group Participation (Part 3) • Similar to the previous slide, we will apply community fit criteria to 3 business opportunity ideas. Green = A Good Fit Yellow = Neutral Red = No Fit Page 24 12
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