MILTON K. WONG: ECONOMIC IMPERATIVES TO SETTLE A NISGA'A TREATY

Milton K. Wong, CEO of M.K Wong Associates, urges the B. C. government to settle the Nisga'a Land Question:

In the spring of 1997, I submitted this letter to aid the Select Standing Committee on Aboriginal Affairs with its analysis of the social and economic impacts of the Nisga'a Agreement in Principle and future land claim settlements in British Columbia.

"It had come to my attention that one key issue which the Committee has thus far had trouble addressing effectively is that of economic certainty.

Economic certainty is crucial to the success of any business endeavor. In the global marketplace, international companies who may wish to invest in B.C. are well aware of, and seriously concerned about, the economic uncertainty that surrounds the province as a result of unresolved land claims. The assumption is that once resolved, following any initial disruption, land claims will pave the way for future investment based on a solid foundation of common understanding.

The bottom line is that political instability is always a strike against any area that is hoping to attract investment or generate and support a lively and successful business community.

As the CEO of an investment management firm, I can point to examples such as emerging markets mutual funds, which invest primarily in developing countries. Of the 12 Hongkong Bank mutual funds on offer, the Emerging Markets Fund is the smallest: our clients have invested $9.7 million in that fund as of the end of 1996, compared to $493 million in the domestic money market fund. Part of the difference is attributable to the safety of money market funds compared to equities, but the reality is that people do not invest their money if there is a good chance that, due to political instability, they may lose it. Keeping a close eye on political and social conditions is one of the most important jobs for fund managers responsible for such funds.

Treaties do bring change, and as a result even the most dynamic members of some societies may be understandably wary of them, fearing substantial shifts in political, social or economic conditions. It is also a commonly expressed worry among British Columbians that any gains achieved by the First Nations through treaties could result in some quantifiable loss to the rest of the population. These and similar natural fears increase the level of uncertainty and to some extent, hostility, surrounding land claims. International corporations do not want to invest in geographic regions that are prone to this kind of instability.

A Vancouver accounting firm, KPMG, has completed a Benefits & Costs analysis on the impact of treaty settlements on B.C. Consider their findings:

• When all of the financial impacts on B.C. are considered, the province can expect about three dollars worth of total financial benefit for every dollar of provincial cost. The net financial benefit to British Columbia would be between $3.9 billion and $5.3 billion over 40 years.
• The benefit arises mainly from cash awarded to First Nations. The inflow of money will spawn economic development in First Nations communities. Also, British Columbians as a whole will benefit; take-home paycheques will be up to $400 million higher, at the end of the day.
• Treaties will allow native people access to the economic and employment mainstream. As income disparity diminishes, savings in social expenditures, and less reliance on government support, will bring additional economic benefits.
• At the same time, the certainty that treaties will bring to the province's land and resources will encourage increased investment as people with renewed financial confidence spend money. First Nations will invest settlement money in the province, which will result in a modest economic boom for business people in communities nearby.
• British Columbia should see a significant employment increase as a result of the treaties. KPMG estimates settlements will produce between 7,000 and 17,000 new jobs. There will be increased investment and employment in the province because of the economic certainty that treaties will bring to its land and primary resources.

Others produced similar findings:

• According to the Nisga'a Tribal Council, currently about $13 million is pumped into the regional economy annually (the Smithers-Terrace-Prince Rupert corridor) by the Nisga'a and other tribal groups.
• At least one other early economic study estimated that B.C. has lost about $1 billion in foregone investment because of uncertainty over unresolved land claims.
• There is the human cost to be considered. Social conditions in aboriginal communities have long been below that of other British Columbia communities, with higher infant mortality, suicide and birth rates, below average life expectancy, welfare dependency and higher rates of unemployment. Settlements will go a long way towards resolving some of these difficulties.

Above all else, treaties are about establishing a solid, certain framework for future relations between native and non-native Canadians; and I believe that in the context of such a framework, we can establish a social, political and economic certainty that will encourage investment in British Columbia and therefore be of enormous help to business communities across the province."