B.C.'s First Nations and Business: Chief Executives
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.
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