From tree lots and wineries to salmon farms and cultural tours, B.C.'s First Nations groups across the province are working toward self-determination and freedom from INAC’s transfer payments, bringing new meaning to the term 'Chief Executive'.
Gone are the days of government handouts and drastic unemployment – at least for some B.C. First Nations. Today many local bands are as likely to be running profitable vineyards and partnering with real-estate developers as they are to be taking part in smudging ceremonies. As the wisdom of the old world collides with modern-day economies, band executives offer business lessons we should all pay attention to.
Profitable since year one: it’s the dream of any start-up, but for the Hupacasath First Nation in Port Alberni, it means more than money in the bank. For this band, it’s the first step toward self-sufficiency and self-determination. “Developing our own source of revenue is a great way of getting off the federal teat,” says Trevor Jones, CEO of the Hupacasath Economic Development Corp. “It spurs an entrepreneurial approach that the whole community notices.”
The key is Hupacasath Woodlot, the band’s forestry company, which opened a 400-hectare woodlot in 2003. Catering to high-end log-home and timber-frame builders, who come directly to the managed forest to select their own trees, the woodlot has generated a profit every year since it started and according to Jones, “It’s created enough money to help us start up some of our other businesses.” A joint-venture micro-hydro project, a granite quarry partnership and a cultural tour company have all been started or supported with the woodlot’s $250,000 to $500,000 annual profit. Thanks to the woodlot, the band is moving toward the day when the Hupacasath won’t need to answer to Indian and Northern Affairs Canada (INAC) about how it spends its money.
The Hupacasath are not alone in this goal. From tree lots and wineries to salmon farms and cultural tours, First Nations groups across the province are working toward self-determination and freedom from INAC’s transfer payments. Their new economic focus is on band- and individual-generated revenues, increasing cultural awareness and freeing First Nations members from Ottawa’s influence. Non-aboriginal partners are enticed and prejudices are disappearing as First Nations people overcome stereotypes. Unemployment is falling and some B.C. First Nations are now teaching the business world some lessons of their own.
This is a new mindset for First Nations in this province, one that has yet to catch on in some places. Fifty years ago, most aboriginal people were living off the land as their ancestors had, logging, fishing and trapping. “They were fairly self-reliant,” says Vancouver-based lawyer and author Calvin Helin, president of the Native Investment and Trade Association, an aboriginal non-profit society.
A combination of the downturn in the resource sector and increased reliance on financial support from the government gradually created a depressing scenario in which band offices became the only employer on many reserves and all the money came from Ottawa. Since First Nations bands don’t have the authority to collect taxes, they rely on transfer payments from the federal government to pay for infrastructure, schools, roads and band offices on reserves. (It’s similar to the money every municipality receives from government.) For the Hupacasath that’s about $900,000 for 250 people. It’s never enough. There’s no money left to help band members find jobs. Aboriginal people, totaling 3.5 per cent of the Canadian population, account for 30 per cent of the welfare roll, according to Helin. “The only solution for most chiefs is to beg for more money,” he says. “That’s just prolonging the problem.”
In the book he’s currently completing, Demographic Tsunami: Crisis or Opportunity, Helin looks at the upcoming collision of a growing First Nations community dependent on government money, and a declining tax base. Currently, transfer payments to First Nations communities add up to $18 billion annually for 650,000 Inuit and Indian Canadians. Meanwhile, First Nations are the fastest-growing segment of the population and a recent ruling by the Supreme Court means 300,000-plus Métis could be granted transfer payments equal to those currently given to Indians and Inuit. Helin explains that with baby boomers set to retire – reducing their contribution to the tax base and increasing their dependency on government-funded services such as health care – the system is unsustainable.
“Everyone knows it, but no one is willing to say anything,” he says. “If everything in your community was determined by the chief and council, would you say anything? It’s a serious retribution system. Everyone’s attention is focused on government sources of money rather than on what the rest of the world relies on to survive – business opportunities.”
Bands are slowly beginning to realize that handouts are not the solution to high incarceration, suicide and poverty rates. “Indian groups are going to have to do what they need to do to break the cycle of dependence and create an economy,” Helin says. “And the first step is to take ownership of the problem. Groups like the Osoyoos Indian Band see there’s no future in the system.”
The 400-member Osoyoos Indian Band is probably the most publicized example of a band taking its destiny into its own hands. In the last 20 years, its fortunes have turned 180 degrees, largely through the vision of Chief Clarence Louie, who believes self-determination comes through financial independence. (See “Ruffling feathers,” p. 94.) “We took a business approach to doing business,” he says. “We kept score and proper records and we put the numbers out there for the people to see.” The band now owns eight companies including the concrete business Oliver Ready Mix, a construction company, a campground and two wine operations, Nk’Mip Cellars and Inkameep Vineyards, which have garnered most of the media exposure. The band anticipates its businesses will generate $18 million in revenue this year.
Separating politics and business was an important move toward legitimacy. Instead of the band council running everything, an independent board of directors took control of each band business. “Banks are lending to us at prime now,” Louie says. But the biggest sign that the Osoyoos Indian Band has bucked the cycle of dependence came in 1995, when band-generated revenue matched federal transfer dollars and the band got to decide where all its money would be spent, no strings attached. “Our band office is not our biggest employer,” Louie says. “Our number-one issue and priority was to create jobs. That’s what we did. I take great pride in the fact that we created 1,200 jobs and half of them went to non-native people.”
Location is a big factor in the Osoyoos band’s success, as it is for the Campbell River, Squamish and many other bands. Their reserves are in desirable locations close to big populations. But even remote bands have figured out a way to make it work. The Gitga’at, based in Hartley Bay on the northwest coast, are as remote as any First Nations group in the province, but they are using their location to their advantage. In 2000 they signed a working protocol agreement with King Pacific Lodge (KPL), a floating luxury fishing resort anchored to Princess Royal Island and owned by Rosewood Hotels & Resorts, a Dallas-based hotel chain.[pagebreak]“We realized, to achieve certainty in our operation, we really needed certainty in our relationship with First Nations,” explains Michael Uehara, president of KPL. One-third of the lodge’s 35 staff are from Hartley Bay and eight Gitga’at youth are mentored at the lodge every summer. Those 12 to 14 well-paid summer jobs are vital to the community of 200 people, says Teri Robinson, who works with the Gitga’at Development Corp. With only three commercial fishing openings last summer, the community would be in tough shape if it weren’t for private partners providing other employment opportunities.
The working protocol with KPL was one of the first private business-Indian band agreements in the province. “Other First Nation communities started asking us about the agreement and its framework,” Robinson says. “It was a model for others and for us with other companies.” The Gitga’at have since signed similar agreements with Triumph Timber, a forestry company, and several other tourism operators. In return, the companies are given access to Gitga’at expertise: hundreds of years of living on a remote chunk of B.C. coast. “We would have no product if the relationship wasn’t there,” Uehara says. “Our business highlights the local area. If it’s going to be authentic we require the kind of knowledge only the Gitga’at have.” Lodge guests visit the community on cultural tours and King Pacific staff are viewed as part of the community (Uehara is an honorary member). For its part, KPL flexes its corporate muscle with politicians and tourism industry bigwigs to push for such initiatives as the protection recently granted to the Great Bear Rainforest. Similarly, the Gitga’at helps KPL get what it wants from the same stakeholders.
While the Gitga’at are using their experiences in business to bolster their culture, some bands complain that corporate realities and First Nations culture don’t mix. They say a focus on business steers communities away from the central aboriginal ethos that the community comes first. It’s a suggestion at which Calvin Helin scoffs. “No other culture that competes in business has lost their culture. The Chinese are still Chinese. The Japanese are still Japanese. Where’s the cultural pride in a welfare cheque?”
“Our overall goal is economic stability,” explains Campbell River Indian Band economic development officer Jodee Dick. “In doing that we create job opportunities for our community and revenue for the band that can be put back into community enhancement.”
Which is why, when members of the Campbell River Indian Band look at the section of rocks and windblown grass separating the federal marina parking lot from the scenic chop of the Discovery Passage, they see jobs and a more secure future. The site will soon be home to the world’s first First Nations-owned cruise-ship portal, which will welcome its first visitors in 2007, thanks to a partnership with the federal, provincial and municipal governments. A pathway will lead passengers from the site to the band-owned marina, which is a short walk away from Discovery Harbour Shopping Centre, a joint venture with Northwest Properties. The band anticipates the creation of more than 240 jobs and annual revenues of $13 million, based on an average of $100 per passenger.
“The terminal represents endless opportunities for the band,” says Dick. “Our future generations will be able to continue to explore opportunities surrounding the cruise-ship industry, while the project will give economic stability to our community that will only strengthen as time goes by.”
In Campbell River, the promise of jobs related to the cruise-ship portal and big-box stores is bringing band members back to their historic culture. People are returning to the reserve – 80 people, in a band of 600, are on the waiting list for a home on reserve land. Kids are discovering traditional dancing and carving. The Discovery Harbour Shopping Centre is decorated in First Nations motifs, which will also appear on future developments such as the planned Wal-Mart.
The cruise-ship terminal will resemble a traditional village, with longhouse-inspired architecture and welcome poles. And, Dick says, cruise ships will be welcomed by an escort of warriors in canoes on the water and drummers standing on the beach, just as Dick’s ancestors once met visitors.
Cruise-ship traffic also offers an opportunity for band members to start businesses of their own. And they won’t be alone. According to John Harper, director of social and economic initiatives with the provincial Ministry of Aboriginal Relations and Reconciliation, 25 per cent of aboriginal entrepreneurs in Canada live in B.C. No one is sure why, but Harper would like to believe the First Citizens Fund, a program he oversees, is at least partially responsible. The fund offers loans of up to $75,000 a year to First Nations people (who may have trouble getting loans otherwise) to pay for business start-up and expansion costs, or for education.
Ironically, the government loans are meant to make people less reliant on government support. “If they can develop their own skills, they will be less dependent on fitting into government boxes to receive funding,” explains Harper. But more than money is needed if aboriginal communities are to be successful. “We have to focus on education and recruiting our best people back to the community,” says Helin, despite the fact that he lives in Vancouver, and not in Fort Simpson where he was born. But the point holds water. First Nations youth, just like any other, need role models and mentors to help them in business. They need people like Peter Wealick.Wealick, from the Tzeachten First Nation in the Chilliwack area, regularly returns to his alma mater, BCIT, to talk to First Nations students about what it takes to succeed in business. “I show them it’s possible to be their own employer,” he says. After 10 years of running his own company, Aboriginal Computer Solutions, which he started with his own capital, Wealick is pulling in $2 million annually in revenue. His four-person operation, serving more than 250 clients, has doubled revenues almost every year and he is now looking at hiring a fifth employee.
“What makes me successful is that I sit back and think about what the customer really needs. I ask them what problems they have,” he says. “Your clients are looking for people to help them get where they want to go. If you can speak to their business pain, and keep listening and communicating, you’re going to have those clients for a long time.” Wealick still services his first client.
That’s advice to take to the bank.