+ Sovereign Wealth Funds for Indigenous and Northern Communities - PowerPoint PPT Presentation

+ Sovereign Wealth Funds for Indigenous and Northern Communities Greg Poelzer & Melanie Plante

+ Objectives Gap analysis Current management practices KNOWN KNOWN KNOWNS UNKNOWNS Potential use of regional and local level SWFs Identifying obstacles UNKNOWN UNKNOWN Focus on the Canadian North KNOWNS UNKNOWNS Methods Literature review, document analysis, discussions with experts in the field

+ What is a Sovereign Wealth Fund (SWF)?  Separate pool of government funds that have holdings in foreign assets  “Buying mutual funds for governments”  Build wealth over time & stabilize resource-based economies  Gold star example: Norway’s Norwegian Government Fund Global

+ What is a Trust Fund?  Fiduciary legal relationship  Terms are set in a trust agreement  Trustee manages and protects trust property for the beneficiary  government-owned  required to invest

+ Regional Level Findings OUTCOMES Small sub-national resource based SWFs are successful INTEREST NWT the first territory to create resource based fund in 2012 Potential for other regions to adopt similar projects Obstacles include access to resource revenue and balancing current needs with future ones

+ Local-level findings DATA Indigenous trust funds are popular Used primarily to manage money from IBAs and Land Claim Agreements Heterogeneity Obstacles: taxation & control of assets Template of best practices

+ Current Good Practice  community participation in drafting the trust agreement  community ratification of the trust agreement  requiring trustees and/or Chief and council to obtain independent investment advice  drafting an investment policy statement  clearly indicating who is responsible for investing trust property  indicating what type of investments the trust property can be invested in  investment professionals need to meet four requirements: objectivity, independence, expertise and experience  set aside a portion of funds as ‘legacy funds’

+ Reduce obstacles to long-term investments Investment strategies Are there alternatives? From Trust Funds to SWFs

+ Policy recommendations  removing income tax for First Nations trusts  continue to work with First Nations to make funds held in government accounts more accessible  support the creation of inter-generational wealth

+ Future Research More empirical work and data collection on current trust funds Gathering First Nation experiences on trust funds Engage with First Nation communities to develop evidence-based guidelines that reflect their needs and goals