Speaking Notes
for the Honourable Robert D. Nault, PC, MP
Minister of Indian Affairs and Northern Development
Keynote Address to the Canadian Society of New York

New York, New York
January 30, 2003

Check against delivery

Thank you.

And thank you to the Canadian Society of New York for the generous invitation to join you today.

Now I know that today I bear a heavy responsibility: I am the only thing standing between you and dessert, so let me assure you that I intend to be brief.

Those of you in this room know better than most the close ties between our two great countries. President Kennedy put it well when he said that "geography has made us neighbours. History has made us friends. Economics has made us partners. And necessity has made us allies."

Those words are truer today than they have ever been. The events of September 11th have awakened us all to new dangers and served to reinforce old friendships. Since that time, we have both shown the depth of our friendship. Issues of border control, security and trade have shown that we have the will and the respect to make these things work.

I am proud of the strong economic ties between the United States and Canada—ties that create jobs, open doors, and improve the quality of life for citizens on both sides of the border. Indeed, our two nations enjoy one of the closest economic relationships in the world.

Every year, more than 200 million people cross our border. And there is over $1 billion U.S. in commerce between us every day.

The fact is, we know one another. We understand one another. And, despite the fact that our American friends insist on playing football with four downs and a short field, we still like one another.

So I know today that when I talk about enhancing investment in Canada, in many ways I am preaching to the converted. You know many of the opportunities Canada offers. You know that the business environments are similar—that it's easy to move back and forth between the two.

But what might not be so well known are the changes that have taken place—and the strides we have made—in Canada to create an economic environment second to none.

The fact is that over the past 15 years, Canada has undergone a fundamental re-thinking of its public policy in three key areas:

• First, Canada today has its fiscal house in order. The days of governments spending more than they had or promising more than they could deliver are over. In fact, Canadian Federal government spending, as a percentage of GDP, is at a 50-year low.
  
• Second, Canada today is a strong proponent of free trade. Canada is the number-one trading partner for 38 states—and is, by far, the United States' biggest trading partner. The U. S. trades more with Canada than with all of the European Union countries combined.
• Third, Canada today understands that in the knowledge economy—where people, goods and money flow freely—the role of government is to give people the tools they'll need to compete and the freedom to go as far as their talent will take them. That's why we've invested so significantly in our research capacity, in universities, and in new frontiers of knowledge such as genomics.

All of these trends have not only affected our business climate, they have also benefited our economy.

Canada has recorded five straight budget surpluses . And we are the only G-7 nation that is expected to balance its budget this year. In fact, the Organization for Economic Cooperation and Development (OECD) expects Canada to be the only G-7 country in surplus in 2003. Both the International Monetary Fund and the OECD predict that Canada will lead all G-7 countries in growth this year.

Moreover, we are one of the few countries to begin paying down our debt—more than $45 billion in just the last few years. As a result, our debt-to-GDP ratio has fallen faster than any other major industrialized nation, and is now below 50 per cent—and dropping.

Little wonder, then, that the Institute for Management Development has declared Canada to be the best fiscally managed country in the G-7.

All of this progress in restoring order to the finances of our nation has not gone unnoticed. Both Moody's Investors Service and Standard & Poor's have restored Canada's triple-A credit rating—the highest rating possible.

Perhaps most encouraging of all, these "big picture" improvements have lead to real-life benefits for our citizens. Taxes are lower and employment is rising. In fact, over the past two years, the Canadian economy created well over half a million new jobs.

This is a record on which Canadians are proud to stand, but it is not one on which we are prepared to rest. We need to push forward and extend the benefits of a strong economy right across the country.

In my own area of responsibility—Indian Affairs and Northern Development—we have recently launched a series of actions designed to give First Nations and Inuit the powers they need to build a better future for themselves and for their families.

We know that when First Nations and Inuit communities thrive, we all benefit. As the promotional material for today's luncheon says, First Nations in Canada are poised to become key partners in some of North America's major economic projects including Voisey's Bay Nickel Development, James Bay Hydro Development, the Alaska Pipeline project, the MacKenzie Valley Natural Gas Pipeline Project, as well as diamond projects in the Northwest Territories and Nunavut.

To ensure that the First Nations people and Inuit participate fully—not only in these projects, but in economic growth more generally—we have significantly increased support for economic development in their communities.

We have also introduced the First Nations Governance Act, which puts decision making power back into the hands of the community. From a business investment perspective, this means your First Nation community partners will be a position to make their own decisions, without excessive red tape from government.

In order to strengthen the fiscal capacity of First Nations, a number of new instruments have been proposed which will provide the stature, stability and credibility essential for strong fiscal management.

For example, First Nations communities will finally be able to finance their own development through instruments like bonds, have greater access to private capital, and be in a position to create attractive environments for investment.

This will be a good opportunity in particular for institutional investors. The model comes from a tried-and-true system used by British Columbia's municipalities. We have worked with institutions such as the Royal Bank and Moody's, and I am confident First Nations will bring a quality financial product to the financial market that can compete with any other bond instrument available.

All of these initiatives are being reflected in a new spirit of confidence—a can-do attitude that is changing lives and transforming communities.

One of the most interesting examples is Membertou First Nation, located on the East Coast in Sydney, Nova Scotia. Last year, they became the first indigenous government—I would wager probably the first government on the planet—to become ISO 9001-certified.

They wanted to send a message to business that they were ready for investment, that the rules of engagement were clear, that they were transparent and accountable. This is a community that does strategic partnerships with multinational companies. In other words, they are serious about return on investment.

There are many stories like this. In fact, the growth rate of Aboriginal entrepreneurship is twice the Canadian average, and there are now over 22,000 Aboriginal businesses across the country.

Today, we see Aboriginal entrepreneurs developing new products, new services, new ideas and bringing them to market. For example, last year the Northwest Territories—whose population is 50% Aboriginal—had the highest rate of economic growth in Canada.

Today, after real progress at the claims tables, after new ways of taking decisions together have been put in place, Aboriginal people in the NWT are at the forefront of development activities. And this sort of success story is being repeated in Aboriginal communities all across Canada.

Non-Aboriginal business leaders are sitting up and taking notice, discovering the enormous potential of Aboriginal people—not only as consumers and as markets, but also as partners and associates in joint ventures.

You might be interested to know that as investors, you may have some competition from First Nations. For example, we recently set up a venture capital fund in Quebec, and another in the west, targeted specifically to the oil & gas sector.

These funds have two goals: First, to invest with First Nations businesses; second, to turn a profit for investors, and re-invest that profit. First Nations can—and will—be players in the North American economy.

But to fully develop the resources of the north, we need investment from south of the border. And that's where you come in.

Just as important, shareholders demand sound investments and solid returns. And that's where First Nations and Canada come in.

Let me just give you a flavour of the kind of opportunities that are emerging.

I mentioned diamonds a moment ago. Four years ago, Canada had virtually no diamond industry. By 2006, we will be responsible for 12 percent of the world's total production.

And it's not just extraction. We are also attracting some of the world's premier jewellery companies which are setting up cutting and polishing facilities in the north. Tiffany's, for example, has announced that it will open an operation in Yellowknife as part of their desire to market "conflict-free" diamonds.

Within a few years, Canada's two major diamond mines, Ekati and Diavik—together with new ones expected at Jericho and Snap Lake—will produce more than 15 million carats annually, worth $1.6 billion, making Canada the third largest diamond producer in the world.

On the energy side, the opportunities are just as exciting. I hardly need to remind any of you of the importance of a secure supply of oil and gas, and the importance of diversifying our sources of energy.

Oil sands and natural gas fields in Alberta are already fuelling generating stations in Chicago and providing 20 per cent of New York's oil and gas requirement. Meanwhile British Columbia's hydro helps to supply the grid that heats and cools homes in California. Canada is the third largest producer of natural gas in the world and the 14th largest producer of petroleum. But if we are going to meet the increasing demand for oil, gas and hydro in North America, it's in everyone's interests to develop Canada's resources.

And with the settlement of land claims and a new generation of business-savvy Aboriginal leaders, the opportunities have never been better.

With the recent jump in natural gas prices and increasing demand in North American gas markets, the Mackenzie Delta/Beaufort Sea and the Alaskan North Slope are poised to become major contributors to continental energy supply.

For example, the Mackenzie Valley and Delta have an estimated 75 trillion cubic feet of natural gas potential This region can make a significant contribution to supplying North America's energy needs. What's more, because natural gas is the cleanest-burning of all fossil fuels, its increased use can help to reduce greenhouse gas emissions.

Industry is considering several pipeline routes through the N.W.T. and Yukon. There is no question in my mind that we can develop this region in a way that both protects the land and delivers major benefits to northerners, to investors, and to the people of Canada and of the United States.

Tremendous opportunities exist in other areas as well. On the hydro-electric front, the Cree of Northern Quebec have signed a multibillion-dollar agreement to share in the development of the James Bay project.

And in Voisey's Bay in Newfoundland and Labrador, the First Nations and Inuit have secured $250 million in contract guarantees. Once fully developed, the nickel resources at Voisey's Bay will generate more than $11 billion in economic activity.

Across Canada, First Nations and Inuit are building capacity and signing agreements. Just a few weeks ago, I had the privilege of signing an accord with the Athabasca Tribal Council, providing additional support in its role as partner in the development of the Athabaska oil sands project. The Council partnered with 15 major natural resource companies that understand that investing with First Nations makes business sense, and shareholders happy.

And so my message today is simple: Canada is brimming with opportunities—for First Nations and Inuit, for Canadians and for Americans. Our economic fundamentals are sound. Our business climate is inviting. And our potential is as vast as our geography.

Now is the time to develop partnerships with Aboriginal governments and Aboriginal businesses right across Canada. Now is the time to do business in the North. And now is the time to work together in common effort and common cause.

Where's the next big opportunity? It's closer than you think—right next door. In Canada.

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