Estimating the Economic Impacts of Specific Claims Settlements in Canada: The Case of Little Red River Cree Nation

Abstract

Since 1973, 535 specific claims valued at more than $6 billion have been settled between the Government of Canada and First Nations governments for outstanding treaty obligations. Critics of specific land claims point to the absence of statistical evidence that shows a positive impact on First Nations economies and characterize specific claims as a multi-billion-dollar liability for Canadian taxpayers. This research shows that the economic benefits of specific claims are being lost to First Nations economies through high rates of economic leakage, especially in cases in which large proportions of the settlement funds are disbursed on a per capita basis. Collaborating with the Little Red River Cree Nation (LRRCN) in Alberta (a recent recipient of a $239 million settlement), we use household expenditure data, band-owned businesses’ financial statements, and band administration audit reports to estimate their rate of economic leakage and the economic impact of their specific claims settlement. Results indicate that the economic leakage rate for the LRRCN is 83.5 percent. Using household expenditure data and input–output models, we estimate the economic impact of the LRRCN settlement. Assuming a 100 percent per capita disbursal of the funds, the settlement would contribute $275–$339 million in provincial output, $172–$212 million in gross domestic product, and $110–$127 billion in labour income, and it would create 2,393–2,714 full-time jobs. The results of this research may be of value to First Nations leaders in making decisions concerning the distribution and investment of specific claims settlements in the future.