Proceedings of the Standing Senate Committee on
Issue 12 - Evidence - Meeting of October 25, 2005 (afternoon meeting)
VANCOUVER, Tuesday, October 25, 2005
The Standing Senate Committee on Aboriginal Peoples met this day at 1:05 p.m. to examine and report on the involvement of Aboriginal communities and businesses in economic development activities in Canada.
Senator Nick G. Sibbeston (Chairman) in the chair.
The Chairman: Good afternoon, and welcome. Our first witness is Chief Darryl Peters. Please proceed.
Chief Darryl Peters, Chief Douglas First Nation: Good afternoon. Many opportunities have been presented to Douglas First Nation and I will review a list of them for senators, who have a copy. I prepared this for the committee so that senators would have an idea where I am coming from on behalf of the people that I represent.
Douglas First Nation is a small, remote community at the north end of Harrison Lake, where the main activities are in forestry. Recently, we have seen a decline in forestry activities because of the softwood lumber tariff as well as the new changes in the Forest Act. We are trying to develop a process to continue the stand for our forest, whether we do this through our Indian Band or through our First Nation with all of our communities. The Douglas First Nation has many other opportunities thanks to the abundant natural resources, such as water and mineral extraction, should we consider those. That has taken place in the past but right now we do not have the capacity for that so we have set that aside for now.
Without looking at the Indian registration file, I know that we have approximately 217 members in the Douglas First Nation, about 30 percent of whom live on the reserve. We have three Indian reserves that are fairly close to the most southern point of the Lillooet River. The biggest, Douglas Indian Reserve 8, is at the north end of Harrison Lake. It is split by a river and a little mountain. We have two communities on this reserve. The map before you shows two villages: Tipella, where I live, and Port Douglas.
That gives you an idea of our physical location so you can understand some of the economic development activities that we are currently looking at. Our approach is to develop a diverse local and regional economy. With all of these new words that are coming out these days regarding renewable energy, we have been looking at independent power production. We have two different opportunities. One is run of river, which is a “green” or “clean” energy. We are in negotiations with a proponent to look at eight creeks or small rivers for this kind of project. From that we will obtain some equity and employment. We will look at endowment and anything else that we can think of to work with this proponent. The second opportunity we are looking at is geothermal energy, which is a higher-risk power source. We have a hot springs located very close to our community, just within one watershed. We hope that we can access the resources in an appropriate manner. It is my understanding that the footprint for this kind of project is minimal.
I mentioned forestry. I had an opportunity to negotiate a sawmill for Douglas First Nation through one of the new companies that came into our territory. With that, we have an opportunity to invest in some time and effort, but we need to learn how to operate the unit first. In discussions with the licensee, we have established a time frame but our problem is that we do not have the resources for start-up. I have never had the opportunity to review or understand these start-up costs. With this new forest and range agreement in place, we are looking at opportunities for logging. We have applied for a woodlot licence in the Squamish Forest District and in the Chilliwack Forest District. One consideration for this woodlot licence is that we do not have an area that has been defined by the Ministry of Forests and Range. We are waiting patiently for some feedback from the department in Victoria because we do not want to rush into this just yet.
We also have silviculture activities, which we have been involved in for many years. Silviculture is important for the life of the forest. It involves tree planting and looking after the vegetation. That is one activity where we have an ongoing opportunity with our training from past programs. We have skills for that activity but we do not have the resources.
There is a new opportunity that I learned about recently — botanical products. I heard from our Elders in the past that we have utilized botanical products in our territory since time immemorial. However, I was introduced recently to the idea of utilizing those resources in today's economy. We are considering developing a business venture with a company for cedar leaf oil. I am looking at more information on this but we do know that it helps to reduce mould and can be used for perfumes and the like. It is very new and this company realizes that in order for them to start business in our area, we need to develop the proper consultation and accommodation.
From looking at the map, from flying over the area, or from visiting the area, one can see that we have a wonderful opportunity for tourism, which has not required too much development. It is a great opportunity for people from Vancouver to take a trip into the wilderness and for us to work with outside companies to develop our economy. I have had the opportunity to negotiate with both Squamish and Chilliwack forest districts a management agreement for 20 Mile Bay, which is about halfway down the west side of Harrison Lake, where there are about 70 campsites. We are in our third year and encountering stumbling blocks but most of those are because of Mother Nature, forest fires, prevention of forest fires or the weather. Other than that, it is a beautiful site right on the lake. We have another two years to manage 20 Mile Bay Campground so we are also looking at how we can better develop the campground. To that end, I have talked to people with the Squamish Forest District who have a campground that is very close to the Slocet Hot Springs. It is approximately 12 kilometres away from my community, just up the little creek, and has about 15 campsites that we can utilize. We are working with the Squamish Forest District to develop and enhance it while still maintaining the rustic profile of the campground. I have also talked to them about developing other campgrounds on Harrison Lake between 20 Mile Bay and the north end of Harrison Lake. There are probably four sites that would be well worthwhile for campgrounds. We could build small cabins or even lodges, for that matter. It is such a nice site. Some areas are accessible only by boat or, for the adventurous types, by challenging hikes through the hills.
We have many hiking trails that we have used in our past and continue to use, as well as those that outsiders use. We could include our circle route tours with one of those trails. Port Douglas was the original mile zero during the Gold Rush in 1858. The whole of Harrison Lake was our home setting. The settlers came in and realized how nice it was to come from water onto land there and take the tour up to the Gold Rush. They talked to my ancestors to learn about the best routes. They Gold Rush trail developers were shown the best locations. Today, we have a heritage trail that goes from Port Douglas up the Lillooet River into D'Arcy and to Anderson Lake. I continue to look at those many opportunities and the many more out there. We have many glacier lakes. I mentioned earlier that I spend much time in Vancouver but, when I do have a chance to go to my community, I take the time to go into the mountains, where we have Fire Lake and Glacier Lake. There are many beautiful areas. I could speak to these tourism factors for a long time.
In the area of construction, for us to continue with our economic development, we have taken on the task of hydro slashing for the B.C. Hydro right-of-way. We sent some of our members to Victoria and other urban centres to gain a better understanding of the limits of approach for B.C. Hydro's right-of-way. We have had many experiences working with B.C. Hydro to do this slashing. We also learned how to do some burning of large piles of woody debris and old logging blocks. We have taken the opportunity to learn those skills. When development occurs, landscaping is required to make the places look nice again. With those opportunities, some community members are willing to be involved with either developing a company to do landscaping or to work with construction outfits that come into the area for such things as the Running River Project. Some community members have been involved in heavy-duty equipment operation, having learned that skill, and more will seize that opportunity. We have purchased a Cat 966 front-end loader but without sufficient resources, we cannot operate it on a daily basis.
There are also opportunities in general carpentry so that we can build houses for community members and for outsiders that come in to help. One thing that will be big in our community is the development of a concrete plant. I learned over the past couple of weeks that concrete prices have gone up 20 percent, I believe. If we were to develop a concrete plant close to our territory, it would make it much easier for us to develop independent power projects and other construction projects.
Over the last couple of years I have been involved in negotiating agreements with Fisheries and Oceans Canada. To be honest, we have never truly welcomed DFO in our territory because of the communal fishing licence and all that it entails. However, I stuck my neck out on behalf of the community members to work with the federal government and look at what we are missing. I found out that we are missing out on much of the stock assessment. We know that we have chinook, sockeye and coho salmon, but we do not know about their overall life span and locations. I asked the Department of Fisheries and Oceans how we can better provide the information for them and for us. We know certain areas where we fish but I thought it would be best to develop a rapport with DFO so that all members of our communities could know the stock assessment of the species within our tributaries. We are in our third year of working with DFO. We are doing what we can and experiencing a great deal. We know that biology is important and having someone knowledgeable on staff is well worthwhile.
We are looking at what the government can do better to support First Nations economic development. In-SHUCK- ch, which is composed of three First Nations — Douglas, Skatin and Samahquam, is involved in treaty negotiations with the federal and provincial governments because we do not have proper communications or access to any of the funding for the Olympics. When you look at the map, you can see that as the crow flies we are only 15-20 minutes away from Whistler or Vancouver. We hope that we can help with development for the Olympics for Canada and B.C., recognizing the need to improve our training and our economy. On a personal level, we need to develop better training and apprenticeship programs. In order to do that, we need to have some experience. We are looking at the kinds of band-owned companies that we had in the past. A few of them did not last long because the economies of scale were not in our favour. We have health, housing and social needs, which all tie into economic development. We have not been receiving housing money so with no housing and no jobs, people are leaving the communities.
Our traditions and way of life stem from a circular society — everything is based on the circle. Community members have looked at how we can best identify our needs for today while recognizing our traditions and societal values. We have included everything that we could in the diagram, recognizing that we need to create employment for the health of our community. I wanted to mention that economic development is not discretionary but is essential to our way of life and economic infrastructure is a prerequisite to that. Roads and power generation all need support from government to initiate such an investment. If we work together and remain open and honest, it will make a big difference for our community. We found that our leaders in the past tended to be more like the squeaky wheel but I prefer to sit down and do what I can to make a difference.
One of the future goals is renewable energy, such as micro-hydro, geothermal, possibly solar, and wind, which will be increasingly important to B.C. First Nation communities. Those energy sources would also meet federal and provincial guidelines and obligations in respect of the Kyoto Protocol by reducing the greenhouse gas emissions. We need to support developing partnerships, which I continue to look for, because it is important for all of us. Searching for partnerships and business ventures is well worthwhile.
Government economic development money through the Resource Partnership Program, the Resource Access Negotiations, the Provincial Economic Measures Agreements and the Partnership Initiatives helped us to develop our partnership with Cloudworks for independent power production. However, that money no longer exists and, although we have access on a regular basis to Indian and Northern Affairs Canada, there is no money left; so it is difficult for us. Without economic seed money, we lack the required financing to move forward. The fact that we live on Indian reserves makes it difficult for us to acquire monies from banks or other financial institutions.
We hope to move forward on all of our projects. With that, I thank senators for this opportunity.
The Chairman: Thank you, Chief Peters.
Senator St. Germain: I am quite familiar with your area because I had a ranch in Pemberton and flew over your place on a regular basis, although I never landed at Tipella. Do you own that airstrip?
Mr. Peters: No, the airstrip is part of Canadian Forest Products' leased land. Since they are one of the companies or tenures that have “walked away,” we are talking to the ministry about the land and the airstrip to determine how we could make that acquisition.
Senator St. Germain: How far north does the land claim go that you are negotiating? Does it go to Skookumchuck?
Mr. Peters: Under In-SHUCK-ch, the land claim goes halfway up Lillooet Lake.
Senator St. Germain: Are you part of the band at Skookumchuck?
Mr. Peters: They are our neighbours from the north. There is Douglas First Nation; the Skatin, formerly known as Skookumchuck; and the Samahquam, which is at the south end of Lillooet Lake.
Senator St. Germain: Have you ever thought of building a toll road through there?
Mr. Peters: We have written a letter to the Ministry of Transportation and Highways about this. We asked and then pleaded for the road to be upgraded to ministry standards but apparently it is not in their interest right now.
Senator St. Germain: Perhaps the private sector would be interested in working with you on that. The private sector did the toll road in Toronto and this road could be a beautiful alternate route to Whistler. You probably know more about it than I do but I wanted to mention it.
You said your campsite was on the west side of Harrison Lake at 20 Mile Bay.
Mr. Peters: It is 20 Mile Bay on the west side, halfway up Harrison Lake beside Long Island.
Senator St. Germain: This is truly an isolated spot. There is access by road but it is in terrible condition, making the campground accessible by plane only. I wish you luck and thank you for the presentation. I can see where you are trying. Some of these things will come to fruition and work out for you.
Senator Zimmer: I have a point for clarification. When you talked about geothermal power, you said that the power would be provided to Port Douglas and Tipella; is that right? In addition to that, what additional revenue do you anticipate from that?
Mr. Peters: The total power that could be developed from this geothermal project would be approximately 200 megawatts. I do not have my notes with me but I believe that could equate about 400,000 houses per year. We would access some of the power but the main focus would be to sell the power to B.C. Hydro or other interests outside B.C. Hydro's realm.
Senator Zimmer: Would it be a profitable venture?
Mr. Peters: Yes.
Senator Zimmer: You talked about the Olympics, which could provide tremendous opportunities. I presume that your construction companies would like to become involved in the construction of facilities, houses and roads; is that right?
Mr. Peters: We are looking at many different opportunities with the coming Olympics. One is the expansion of the Pemberton highway corridor. Businesses in the Pemberton Valley area want to develop a company with us and contract to one or two companies for some of the upcoming work. We are considering doing some of that construction in Pemberton, Whistler and Squamish, or wherever else it is needed.
Senator Zimmer: One of the secrets to that kind of success is to have a joint venture. If you are a part of a group, you have a good chance of getting a share. If it is acceptable, chair, I would like to give Mr. Peters some names after the meeting that he might contact to help in his venture.
The Chairman: Certainly.
Senator Christensen: How many people are in your First Nation?
Mr. Peters: We have approximately 217. Within the community we have about 60 living on-reserve in Tipella Village and Port Douglas.
Senator Christensen: In respect of the capacity of your First Nation to meet with success in all of the opportunities that you have listed and to have people fully employed, are education and skill development problems for you or do you have the required skilled people and it is simply a matter of developing them?
Mr. Peters: Some community members have the necessary skills to do some of the work. However, for larger scale construction, we need people with the extra letters behind their names, which we do not have. Obviously, we have taken the time to look at those opportunities and to work in joint ventures with individuals who come in and train our people through apprenticeship programs, but without the resources, it is difficult.
Senator Christensen: You mentioned that your First Nation purchased a front-end loader but that it was not being used to its full capacity. Is that because you do not have operators or is there a lack of work for it?
Mr. Peters: We wanted to tie this front-end loader in with our sawmill because of the logging opportunities but we could not purchase the logs because we did not have the extra resource. If we were to use our start-up funds to develop this, then we would not have the ability to move forward. If we were to operate the front-end loader on a regular basis, we would not have the resources to move forward.
Senator Christensen: It seems a waste to have a large piece of equipment sitting idle. Every day that it is idle, it is losing money for you. Is there no way that you can have an operator and lease it out to companies in the area?
Mr. Peters: Well, it would be nice to do that but the logging company has all the necessary equipment, and they were moving out. That is why we decided to take the opportunity now so that we could get ready for the future.
Senator St. Germain: Have you ever thought about joining up with Mt. Currie and Skookumchuck and other bands to form a Native economic development corporation?
Mr. Peters: We have a Tribal Council that is looking at the construction factors for Whistler as well. This is called the Lower St'at'imc Tribal Council; and we have N'Quatqua Indian Band, formerly Anderson Lake Band, and the three southern communities. Mt. Currie is part of the Lillooet Tribal Council. We have spoken to individuals from Mt. Currie in the past. Basically, we are waiting for the right door to open so that we can move forward.
The Chairman: Mr. Peters, I thank you for your presentation and for giving us the information about your small band and First Nation.
Mr. Olsen, please proceed.
John Olsen, President, Cree Industries. I am a Treaty Indian from the Peguis Band. My great-great-great- grandfather signed Treaty No. 1 at Winnipeg. We have quite a large reserve in Manitoba where we are the largest Indian Band. There are many ongoing negotiations.
I was lucky, in a way, because I went to school in London, England, with my sister, who is now a school teacher in the United States. She teaches French, Latin and English Literature. My niece is a paediatrician and my son has just finished at UBC. We had some certain advantages by not being brought up on Peguis, although I go back frequently because I own a farm there.
After I graduated in London, I worked for the Department of National Defence in London, England, and in West Germany. I left the government because I had a burning marketing ambition to become a salesman. I became the top salesman for my company in Britain. They sent me back to Canada where I became a training manager and I trained salesmen right across Canada and the United States. I thought one day about the money I was making for many people and decided to make money for myself. I searched and searched for the right business. I wanted to get into a business similar to Gillette with its disposable razorblades — something that could be used, thrown away and replaced. I finally found the product, which will be available worldwide over the next couple of days. It has become a most interesting job.
I am the president and owner of the company. I own another company called Ashley Fish Logs and I am involved in a few other companies. Most everything I do is designed around Native bands and tribes in the United States. My intention is to open factories across Canada and the USA on Native lands to produce products year-round, employing numerous First Nations people in my worldwide marketing efforts. As senators are aware, it is difficult for First Nations people to start and run a business on a reserve. I hope that the committee's deliberations will help us to address and alleviate some of these concerns.
There are a few points I want to make in this presentation and I will comment on those first. Without the proper training and ability to network for information, it would have been tough to start and run a business. This, I believe, is what makes starting a business on-reserve very tough — there is no opportunity to network. Earlier while walking through this building, I saw ten people that I see in the news on television regularly. It was like walking into the Terminal City Club, which is a huge networking organization in Vancouver, where I have been a few times with newspaper people. When I walked in there, I thought that I could probably sell my product to fifteen companies in the next room without having to knock on fifteen doors or travel in from Ottawa or Winnipeg or any other place.
The greatest problem that I faced, and the main problem with any business, is money and how to obtain the necessary financing. As a First Nations person, it has been difficult to obtain any financing because of the stigma and the situation of the Indian Act causing certain practices to be unworkable. It is difficult to use my land on the reserve to get a loan because there is a no-seizure policy on federal Indian land such that a lender cannot seize the product on- reserve should a default occur. I overcame my past problems through hard work and single-minded doggedness and persistence. I believe in the philosophy of Andrew Carnegie, the Scottish steel magnate from the United States. A book entitled Think & Grow Rich, written at the behest of Andrew Carnegie, should be required reading for all First Nations people, and for everyone, in fact, to learn how to make the plan and set the time limit in which to obtain the result.
What has helped me succeed? I believed in myself and that I would succeed despite all the obstacles before me, by using my brains. What has inhibited me? Fear of failure. As a salesman, the number one objective to overcome is the fear of the person saying “no” to you. As a salesman who has developed, you want people to say “no” so that you can overcome their objections. Listen to negatives. I listen to many people talking about negative things all the time every day. I do not want to listen to people saying negative things all the time. Rather, I want to listen to positive people. We are in a great, positive country. We simply need to ignore some of the rhetoric that we hear.
Dealing with the Department of Indian Affairs and Northern Development is frustrating. Perhaps I had abilities and friends that helped me more than other people have, but each time I went to Indian Affairs to apply for information, loans and Aboriginal development costs, they came back to me wanting three years of books, business plans, and so on. We just cannot do that. A businessman simply cannot do it. I have a business plan that is 178 pages long and they want one that is 32 pages long. One day I did a presentation at Indian and Northern Affairs in which I said that I would be paying my salesmen $70,000 per year. The guy shot me down in flames when he said that no one makes that kind of money in the department, so why would we think that natives could make that kind of money. I said that I made more than that and always had. How do you gain equity and prove an idea to a bureaucrat who sometimes has never left the academic world? Some of these people have never left the government or the academic world. They have never had to meet a payroll, which is the toughest job in the world.
What has worked best for me? Studying and meeting people, networking, and speaking before committees like this one. Motivational speakers are needed in society everywhere on and off reserve to tell the truth and to make people get on with life. My advice to other people is to study a successful business in your vicinity and ask questions on how it should be done. I believe there is a wealth of information available to study and learn from. The creative never said it would be easy. Expecting a hand-out and help is not what happens in real life. First Nations need to feel a part of the Canadian mosaic. We need to reach out and develop strategies and businesses that we can run successfully using all advantages such as land rights, location, government employment help and green cards in the United States. The world remembers only winners.
My business is Heatlogs. A heat log is a solid piece of extruded sawdust that was invented by the Japanese forty years ago. Senators can see a photo of heat logs in the presentation material. We use pure sawdust, biomass, sugarcane, rice husk or other. In Canada, sawdust is pushed into one end of the machine and a sausage-like packed form comes out the other end. We cut it to size and then sell it to anyone for burning in a stove or fireplace.
Someone mentioned the Kyoto Protocol earlier, which Canada signed. Other than the United States, Australia, Luxembourg and Lichtenstein, all nations signed. We need smokeless products and Heatlogs produces registered, smokeless logs. We sell these around the world, except in North and South America. In Europe, at every Esso and Texaco gas station, you will find heat logs. We cannot meet the great demand for logs that burn efficiently in fireplaces and stoves. These will sell in Canada and the United States for fifty cents per heat log. All our competitors sell theirs for $2 per log. The largest company in North America is called Duraflame. They make a log that is 51 per cent candle wax, which is a petroleum derivative, and 49 per cent sawdust. It burns with lovely colours and stinks but they sell 100 million logs per year at $2.67 each. That means if we sold our heat logs at fifty cents each, for the same ratio it would amount to $135 million per year. In British Columbia we have 1.2 billion cubic metres of dead pine trees, many of which are on Indian reserves. I have approached the Minister of Forests and Range to suggest that we take the trees, debark them, turn them into heat logs and sell them to our people and anyone who wants to burn an inexpensive fuel. This has been presented to the Campbell cabinet three times. Natural gas and hydro prices are on the rise and heat logs meet the Kyoto standards because they are carbon neutral. They also smell like pine. I think we will have the first breakthrough soon in B.C.
I speak to all the bands across B.C. and to all the American tribes that I possibly can reach . I have quoted a cost to the Department of Home Security for 990 million logs for the purpose of disaster relief. Everyone in the United States of America was asked by Tom Ridge, former Homeland Security Secretary, to have an emergency kit. The American Red Cross adopted the same system. During any emergency, there can be a need for a source of heat. Someone developed a list of items that one should have in an emergency kit but it did not include fuel. It included blankets, tin cans, chocolates, et cetera, but it never included fuel. We suggested that they carry sixteen heat logs in their emergency kits. I think this will work and we will see some positive results.
These heat logs could be made by Natives and then sold door-to-door by Boy Scouts and Girl Guides as a fundraising project. I heard the word “Olympics” mentioned earlier. These logs have been chosen for burning at the Whistler Olympics. At the Salt Lake City Olympics, large barrels on the street corners were kept burning all night by using such logs. Whistler representatives came to see me about using logs during the Olympics.
The logs will be wrapped in a cellulose product. When it is burned, it becomes water and so it is totally non- polluting. The B.C. Government approached me and asked if we could make a log to use in rivers. I replied that I could make a log out of anything. They asked about making them from fish bones and I said that I could do that. They asked us to make the logs but we could not make one that would dissolve slowly in rivers. The salmon are no longer swimming back up the rivers to return to their spawning ground. How do salmon know to return? They smell their way up the river. The salmon spawned in the stream swim down the river to the ocean and back up the river to the spawning ground because they can smell the atoms from their dead ancestors along that route. If no salmon swim back up the river, then there is no smell and future salmon will stay in the ocean. When we make logs for this project, we will insert a special ingredient that was developed at UBC. The log will slowly dissolve in the river so that the salmon will be able to smell the special atom-like ingredient when they go down the river. In that way, they will follow the same route back up the river to the spawning ground.
We could not get the log to dissolve slowly over 30-40 days so the powers-that-be tried an addition of fertilizer through the use of a large tank that would drip the fertilizer into the river to introduce the specific smell that entices salmon to swim up the rivers. However, someone came along with a rifle and blew holes in the tank. All the liquid ran out into the river and killed all the fish. The next time, they used the same ingredients in a burlap sack placed in the river. The plan was for the fertilizer to dissolve and seep slowly through the holes in the burlap sack and the salmon would come up the river. Unfortunately, the sacks disintegrated and the saturation of fertilizer killed the fish. Then someone in Prince George suggested using gelatin, which is in 80 percent of the foods we eat. We mixed the log with gelatin and put it in the river; the log lasted 30 days. At last we had a log that would dissolve over 30 days in water. We drop the logs by the ton from a helicopter into the river and the salmon are being enticed to swim back to their spawning ground. I hired some Ph.D.s who said that we could introduce fertilizers to the rivers worldwide in the same way. Another toxicology expert talked about a product that eats oil and one that eats diesel. I hope that in the future when an oil or diesel spill occurs somewhere in Canada, we will have logs that we can drop into the water in front of the spill to eat the oil, the diesel, the potash and the caustic soda. If there is still a problem, we would drop our fertilizer logs and then our salmon logs into the river.
Studies are being done for every river in the world. We will have operations soon in Norway, France, England, the United States and Canada, where the logs will be used in the rivers. We are also developing a mosquito log containing chrysanthemum oil that when added to a lake or other body of water would dissolve and kill the larvae of the mosquito. We are also working on a log to fight avian flu such that when the logs are put into lakes viruses carried by landing birds would be destroyed.
One of France's largest companies is very interested in backing us, although I will insist that all factories be built on First Nations land. It is becoming very exciting. We have just been offered 6.5 million acres of trees in Oregon to turn into logs because they have seven major river systems with no returning salmon. I believe that I have hit the mother- load. We can introduce it to many Native bands as part of their economic development. This is not a pie-in-the-sky scheme. This is a workable, money-making project. The economic situation on reserves is such that there is no tax, no gas to run the cars, no electricity to run the factories, and unemployed Natives have only certain government help available to them.
I presented to former Minister of Human Resources Development Canada, Jane Stewart, a few years ago and discussed this in great depth. As a businessman, I want to sell my product and make money. As a Native, I want to help my people. I see despair. I see drugs. I see people on Peguis leaving school and thinking that the unemployment cheque is a wage. Some of them will never come out of what they are in. I tell them the truth. I know I had certain advantages by being educated off-reserve but at least if they have the ideas, they can succeed. Isaac Asimov, the great science fiction writer, said that it is a shunt and that you put the idea in their minds.
This log is unique because it has a hole through the middle. All other logs on the market are solid but the heat log is like a venturi because of the hole through the centre that makes the air pressure from one side to the other different. Wood burns at 400ºF, give or take a degree, and the middle of the heat log burns at 800ºF, causing a complete burn with no pollutants and very little residual ash. We can use the dead trees in B.C., in Alaska, in Yukon, in Washington, in California, and the 1200 maple trees that were cut down recently in Toronto. We can produce and sell an inexpensive smokeless fuel; and everybody loves a wood fire. In London, the Savoy, the Connaught, Claridges and other big hotels all insist on using heat logs.
Senator Lovelace Nicholas: After cutting down all the forest deadwood, would there be room for reforestation?
Mr. Olsen: Yes. Under the new Carbon Credit Scheme, which actually came into force yesterday, when you replant carbon forest shares can be exchanged on the stock market. We are involved with companies that will take all the trees away and replant. The big insurance companies will back companies that do this, wherever it occurs. Currently, when you fly over B.C. you can see enough dead trees to fill an area five times the size of Vancouver Island. If they are not milled for lumber within four years, they cannot be used. After four years, the heat log is the only application for these dead trees. We would hope that only the under-four-year trees would be milled for lumber. The Japanese will not buy any of these logs because they have a blue stain that is caused by a worm fungus. Such wood is called “denim wood.” If the Japanese do not buy it and you cannot sell one 2x4 from it, then B.C. will have a real problem. Sawdust in dead trees across Canada is simply sitting idle. Yes, we must plant new trees after the deadwood is removed.
Senator Christensen: Concerning building factories and other developments on First Nations lands, would these be franchised?
Mr. Olsen: We have two systems. They can buy the machine and the marketing company, although I want to market the heat logs. They can have the factory and we will do all the training and the employment. I have found that First Nations involved in manufacturing are not as interested in the marketing and sales side of the business. We are worldwide in sales, and I am taking over the manufacturing of the machines, which are made in England. We will manufacture the machine in Canada and/or the United States for worldwide sales.
Senator Christensen: On an average reserve, what kind of employment would develop with such log manufacturing?
Mr. Olsen: We think that for every eight-hour shift, three jobs will be created. It will depend on the tonnage of sawdust produced. The average machine produces about one thousand tons of sawdust per year, which is the smallest business size that we can have. If they have one thousand tons of sawdust, then we can put three men to work for eight hours per day as long as the sawdust continues.
Senator Christensen: Additional jobs would include bringing in the trees and replanting.
Mr. Olsen: Yes, but I do not get involved in the forestry side. Once the tree is cut down, I am involved with other companies that do the chipping, bark removal and turning into sawdust.
Senator Christensen: You talked about Yukon, where the spruce budworm is a major problem. Have you talked to anyone there?
Mr. Olsen: Yes, we have talked to representatives of numerous large companies in Yukon and Alaska.
Senator Christensen: Are any of them in the Haynes Junction area?
Mr. Olsen: Yes. Where there are trees, people likely know about me.
Senator St. Germain: What is the capital investment required?
Mr. Olsen: The investment for the machine is approximately Can. $100,000. In addition, a plant with a conveyor belt to load the sawdust and a conveyer belt to remove the logs would be required. We do not need heat in the building because when the machine produces the log, it is running at 260ºC. Sawdust is made of cellulose, lignin and extractives. The lignin is a natural bonding agent in sawdust and acts as the glue that holds the log together. When you feel a log, you will realize that it is solid wood with all the oxygen taken out. We melt the lignin through this machine that produces a sausage shape that is extruded black on the outside. When it is sold, none of the black rubs off but when first extruded and rubbed, the black comes off like a charcoal.
The Chairman: Thank you, Mr. Olsen.
Ms. Baptiste, please proceed.
Brenda Baptiste, Chair, Aboriginal Tourism Association of British Columbia: Good afternoon. I am from the Osoyoos Indian Band and I am the Chair of the Aboriginal Tourism Association of British Columbia. With me today is Ms. Dolly Watts, owner of Liliget Feast House in Vancouver.
I will begin by telling you about the Aboriginal Tourism Association of B.C. The material that we handed out today explains the organization. As well, I will talk about our history, about Aboriginal Tourism's direction and our objectives for the next few years. The Aboriginal Tourism Association of B.C. was established in 1996 to provide a voice for Aboriginal tourism businesses in the province. We recognize that Aboriginal tourism is a vital component to the tourism industry in B.C., and we created businesses for the tourism sector. The organization has evolved from a group of 16 founding members at the outset to a membership of more than 160, 40 of whom are export-ready, which is more than in any other province. We are proud of the Aboriginal people in this province and the work that they have done in the area of tourism. Our membership also includes businesses from all sectors of every industry as well as tourism.
In early 2003, ATBC's Board of Directors collectively recognized that the development of the Aboriginal cultural tourism sector was lagging behind the development of the mainstream tourism industry in B.C. To address this, we began a planning process to put the sector on a strong footing for future growth and sustainability. We assembled a team of stakeholders, including Tourism B.C.; the Provincial Government, including the Ministry of Small Business and Economic Development; the Government of Canada, including Indian and Northern Affairs Canada; Aboriginal Business Canada; and Western Economic Development Canada to guide the development of a comprehensive long- term strategy for the development of Aboriginal cultural tourism in B.C. Our partners have been vital in the development of this strategy. In February 2005, the Blueprint Strategy for Aboriginal Cultural Tourism Development was completed under the guidance of the team of stakeholders. This strategy addresses the short-, medium- and long- term development requirements of the industry. ATBC's goal through the Blueprint Strategy is to develop a culturally- rich, self-sustaining Aboriginal cultural tourism industry that can provide opportunities for Aboriginal communities and individuals to become economically self-sufficient. This is key to our strategy. We recognize that Aboriginal people need to play a part in B.C.'s economy and that with the natural resources, the richness of our culture and the diversity of this culture, we definitely have something to offer.
The major findings of the strategy include some of the following: community restrictions, especially in relation to community approval and protocols; and restrictions in terms of the process to have projects go through various government programs, including INAC, which is slow and can mean missed opportunities. We have human resource limitations for staffing and cultural knowledge. Capacity building is a huge issue in Aboriginal communities. Elder Chief Clarence Louie, who is well known for his stand on economic development, has said clearly that we are first generation business people, which means that we require partnership and capacity building. We are beginning in the areas of economic development and the development of tourism-related businesses. We have marketing constraints, not only in the area of capacity building but also in the area of opportunity creating a strong market for Aboriginal cultural tourism products. There are issues related to the development and maintenance of product quality, reliability and authenticity standards. Authenticity is a huge issue within our communities, especially when dealing with cultural products. First Nations culture in B.C. is incredibly diverse and rich. The need for authentic, high-quality products is key to creating Aboriginal tourism. We have limited investment and support programs for Aboriginal tourism product development. These support programs are often few and far between and difficult to access, especially in respect of capacity issues within our communities. The Aboriginal entrepreneur faces barriers when going through the system to have proposals written or developed.
Concerning the fragmented approach to the industry's development, Aboriginal tourism is vital, rich and diverse. We need to create a strategy that will allow it to prosper. Cultural development is the fastest growing tourism sector worldwide. However, with the infancy of the industry in Canada, there are no tangible marketing channels developed for this industry. That is a key message. We need to develop those marketing channels for cultural tourism in B.C. We are in a position to do that with the events coming over the next few years and the resulting opportunities. The major conclusions of the strategy are broken down into three manageable tiers of development necessary to build a successful and sustainable Aboriginal cultural tourism sector. This strategy looks at all three levels and all three tiers.
Tier one, which is the start-up product stage, has to do with capacity building, whereby Aboriginal cultural tourism businesses, potential start-ups and products, including within Aboriginal communities, are undeveloped. This tier deals with that in terms of exploring cultural tourism as an economic development activity; encouraging communities and entrepreneurs with an interest in cultural tourism to develop product; building capacity within our communities; and helping them understand the tourism working environment, including an understanding of marketing channels and their importance. Tier two is those existing businesses that are not export ready and whose products are not market ready. These Aboriginal businesses operate but are not quite market ready. There are clear gaps in terms of market ready, industry standards, hospitality, service levels and other shortfalls. Tier two deals with those in a mixture of capacity building, providing support to those businesses with both information and encouragement so that they become export-ready. Tier three comprises the forty market-ready businesses whereby tourism products are ready to satisfy market-ready standards. However, they need to be integrated into local, regional and provincial destination marketing programs. That is probably not only one of the most important but also the easiest to deal with because the channels are in place. We need only to incorporate more of a focus on Aboriginal cultural products into existing channels. For the sector overall and for each of the three tiers, the strategy recommends a multi-dimensional series of programs to spur growth and to facilitate strong coordination between federal and provincial agencies.
The Blueprint Strategy includes some key initiatives. The first is to develop a coordinated provincial approach to Aboriginal tourism education and capacity building by working with the B.C. Centre for Tourism Leadership and Innovation and Capilano College by developing a coordinated and provincial approach to Aboriginal tourism education, training and rollout programs in association with Aboriginal communities and community colleges throughout the province. This will bring more education opportunities closer to Aboriginal communities and will provide more learning and business training for all Aboriginal people, particularly youth and career changers. Youth are an important component of this strategy initiative. Of the young Aboriginal population in this province, including Osoyoos Indian Band, 50 per cent are under the age of 25. That is an important target group. The second initiative is to develop Aboriginal youth tourism career awareness. Over the next decade, tourism will need 84,000 more trained workers to avoid a skills shortage that would curtail our growth. The third initiative is to undertake Aboriginal community tourism development planning by providing tourism planning assistance to Aboriginal communities to help them to diversify or transition their economies around tourism and forge closer ties with the mainstream tourism industry. The fourth initiative is to deliver community tourism awareness workshops by developing and delivering a series of community workshops to build an understanding of the tourism industry opportunities and by developing a First Nations adaptation of the existing provincial government workshop “Transforming Communities through Tourism: A Workshop for Community Champions.” That is important and some key resources already exist. We do not have to redevelop everything or reinvent the wheel because existing initiatives and tools can be utilized within our communities, provided we create a coordinated approach.
The fifth initiative is to launch a new Aboriginal word-mark — kla-how-èya, which means “welcome” in the Chinook jargon trading language for use in all marketing materials. We would look at standards to ensure the creation of quality products that are easily recognized in B.C. as authentic, high-quality Aboriginal products. The sixth initiative is to promote product development and packaging. We would like to work with Aboriginal tourism operators and the travel trade to open up new markets and expand product offerings through existing markets. This is also very important because many of our communities and businesses are just beginning to learn about this aspect. They need to know about the packaging and opportunities. When communities are a diverse blend of urban and rural, packaging is key to ensuring that those smaller communities in rural areas can take full advantage of those opportunities. The seventh initiative is to launch a multi-year, integrated direct advertising campaign in key domestic, national and international markets to increase the awareness of the Aboriginal cultural tourism experiences that are available in B.C. and to stimulate increased visitation spending by taking full advantage of the diverse Aboriginal culture within this province. We have 196 bands in B.C. , many of which have a different culture that we could explore and celebrate. The eighth initiative is to leverage the 2010 opportunities for long-term success and undertake initiatives to develop Aboriginal tourism opportunities for the pre- and post-2010 Olympic and Para-Olympic Winter Games. That is not the only thing that is happening in B.C. over the next seven years, and so we want to take a look at existing opportunities for our communities and businesses.
The implementation of the Blueprint Strategy will be the next step. ATBC is currently meeting with key stakeholders, including the Aboriginal leadership, Tourism B.C., the provincial government and the federal government to strategize and determine the funding requirements for the project. This is a phased approach to implementation over the short and long terms.
One privilege that I have had over the years with Aboriginal Tourism B.C. is the opportunity to discover and work with such exceptional products throughout the province. I have met entrepreneurs who are highly committed to their work, whether it be running a golf course or a feast house or other. These entrepreneurs are set apart because they bring their pride of heritage to their products.
I would ask Ms. Liliget to tell you about what she does.
Dolly Watts, Owner, Liliget Feast House: I am a chief and where I come from, women and men are equals, which is quite different from outside my area. About five years ago I became Chief Lion. A great deal of responsibility goes along with that.
I will tell you a brief history. I was born in Kitwanga, British Columbia, where I went to a small day school. One day the government sent all of us to the residential school. I was there for ten years. I stayed until I finished high school, got married and raised a family. Then, when I was 49, I went to UBC. I have a degree in anthropology. When I had just finished, I stayed on to help with a research project. Some students wanted to raise $1500 for a field trip for the Native youth program. I offered to make bannock. On the Monday, I bought some dough and started to make bannock. I could not believe the line-ups for it. We had to get another frying pan. We served coffee and tea with the bannock. In five days, we raised $1300. Everyone at the campus knew about bannock. It wasn't long before people started to ask me to make salmon and bannock or soup and bannock and other dishes. Soon I was catering small dishes out of my apartment because it was more for my friends. Then, when the orders grew I had to rent kitchen space at UBC. I was very lucky because I could rent the kitchens for $10 per hour. Of course, I had to cook fast to save money.
The First Nations House of Learning was opening at UBC so they asked for quotes to cater the event. I put one in not really knowing how to do a quote. I proposed $10 per person for an entire meal plus 3700 pieces of bannock. I won the contract and 2,000 people came to the opening. When we sat down to count the money, I found that I had made $11,000. That profit went straight to the bank. Everyone was paid well.
In 1992, the director asked me to set a table with bannock outside because the people loved it. I hired two women to fry the bannock and I paid each of them $10 per hour. I would get up early and make the dough and set it up for them. They sold the bannock with coffee and tea. Our location was not good enough, so I planned to make a food cart with a deep fryer and a barbecue for the salmon. That first two months with only the table, I made $25,000 in sales. When I added the food cart, the sales for two months was $67,000. Of course, the profits were high because we were being charged only $500 per month outside the museum. I had truly enjoyed the whole experience. The time came when I grew tired of renting space out of UBC. I had to run between two kitchens and bring all my pans and utensils with me. At the end of each day, we had to wash and store everything. A restaurant space became available and I needed money to open. Luckily I had $25,000 in the bank from sales at UBC. We took a good look at the restaurant, which was built in 1967. By 1995 it was quite broken down so we had to renovate. We figured it might cost $50,000-$60,000 to renovate. However, when we were done, I found that I had spent $130,000. Anyway, we explored ways to come up with $60,000 for the renovations but grants would take months to come through. I think when you send in a proposal for a grant, they go to sleep and forget about you; they hibernate somewhere. I went to the bank and borrowed $30,000 and my son co-signed the loan. I borrowed another $30,000, which my ex-husband co-signed because we were still friends. Of course, I had the $25,000 already in the bank.
I had to renovate the whole place and buy all new equipment — dishwasher, stove, deep fryer and freezer. You name it, we had to buy it. I began to run out of money but I found a lending place where I borrowed $25,000. Within five years, I paid off all the loans, thank God. I have a list of the loans. I borrowed yet another $25,000 because there were times when I was completely stuck. There is nowhere to go for help. All you can do is work harder. Many times I went without pay just to make sure I did not empty the bank. I had to learn to be careful with the money.
Today, we are struggling because of SARS and 9/11. Each of those years we lost $150,000 for a total of $300,000. I am afraid to see how we have done over the past couple of years but I know we are slowly catching up. When 9/11 happened, some businesses along the same street as my restaurant closed. When I say “we,” I mean my daughter and my family, who really backed me up. We figured that we could hang in there.
My restaurant seats 48 people. It is very small. Since I opened the restaurant, I have paid to my people about $1.5 million in wages. I have paid about the same to my suppliers, including other overhead and expenses. Today, we are having a hard time meeting all our expenses. I planned to retire and so I have the restaurant up for sale. Two interesting people would like to buy the restaurant and if they do, I would be able to clear up my bills.
My advice to people that want to start a business is to start small. Do not go into business in a hurry unless you have a lot of money. Start small, let it grow and plan how you will pay back your loans. If you can get money from the government, that is fine but be prepared to wait. One man who owns a small coffee shop waited for one and one-half years to receive $18,000 on his application for $25,000. That is the way it is. If you can think of a better way to talk to the people that have the money, just give them an earful.
Senator Zimmer: This past weekend I was in Winnipeg. Before I flew out, I met a young Métis lady by the name of Elise Price, who is with the Aboriginal Chamber of Commerce in Winnipeg. I talked to her about this committee and told her I would attend these hearings. I asked her about some of the issues that deals with these days with the Aboriginal Chamber of Commerce. She commented on two things: urban reserves and Aboriginal tourism. She made me aware of Aboriginal Tourism Canada, although they lack funds. My question is: Are you sharing your thoughts, ideas and programs with other provinces and with Aboriginal Tourism Canada? Apparently that is a kind of portal into Aboriginal tourism operators. Have you been sharing ideas and interchanging programs and principles that could assist your process?
Ms. Baptiste: That is an excellent question. The Aboriginal Tourism Association of B.C. is a member of Aboriginal Tourism Canada. As well, I sit as a director on Aboriginal Tourism Canada. Aboriginal Tourism Canada's membership comprises the various Aboriginal regional tourism organizations. When we meet, we exchange ideas. Aboriginal Tourism Canada knows about ATBC's Blueprint Strategy and what we are doing in B.C.; and they celebrate that. We have looked at our actions with the Blueprint Strategy and the potential opportunities so that we can create some synergy amongst the other provinces. Absolutely, we share ideas. As well, we look at the broader issues of national Aboriginal tourism. The year 2010 is not only about B.C. but also about opportunities for Aboriginals on a national level.
Senator Christensen: Regarding the proposed Blueprint Strategy for ATBC, have you done any market testing and focus groups on First Nations and what has their reaction been?
Ms. Baptiste: The research that went behind the development of the ATBC Blueprint Strategy was unique. We took a triangulated approach to the research in working with industry, with tourism organizations and with the communities. The strategy was created from the communities so all of those proponents were part of creating the strategy. This year, we decided that we needed to test drive the strategy to determine whether there would be any benefit to Aboriginal communities and businesses. We prepared a marketing project in partnership with Tourism B.C. It was less a focus group and more of an on-the-ground marketing tactic that included an Aboriginal guide. It was very well received. We created an Aboriginal website that is separate from the corporate Aboriginal Tourism B.C. website. This portal for Aboriginal businesses has been extremely well received. Feedback from our stakeholders has been positive. They said that it has made a difference to them this year, even though it was completed only last spring. We are seeing successes.
Senator Christensen: Ms. Watts, you developed your tourism-related business through a great deal of hard work. If ATBC's plan had been in place then, would it have been a help to you when you were first starting out?
Ms. Watts: It would have been of help. To advertise, I used the local papers. Then ATBC came along and advertised for us. For some reason, the local people are more interested in coming to Liliget now, whereas before, I would say that about 75 percent of our customers were from elsewhere — from all around the world.
Senator St. Germain: Ms. Baptiste, authenticity is the key. Some of us are lucky and buy Indian art. The most challenging aspect is determining authenticity. How do you police this? I am not trying to put you on the spot but when buying paintings, you can check the authenticity. However, when buying Indian artefacts, it is more difficult to check unless you are buying directly from the Aboriginal manufacturer. I find this bewildering.
Ms. Baptiste: I wish I had an easy answer for you, senator. Authenticity is one of the primary issues with Aboriginal cultural products that include not only arts and crafts but also intangible products such as experiences. Experiences within our Aboriginal tourism industry are just as important. For example, when Dolly spoke to us about her business, she told us the story of her business and what she and her daughter went through. That kind of story creates the richness of the products. It is not only the product but also the story behind the creation of the product.
We recognize that there are national and provincial issues in terms of authenticity. However, we must keep in mind the diversity of First Nations communities. The fundamental area for creating standards to ensure authenticity lies within the communities. Only the communities can decide what is authentic for their First Nation and what is not authentic.
ATBC is proposing that we provide communities with the opportunity to take their products identified as authentic, high-quality and reflective of their culture and values and apply a word mark, such as kla-how-èya, to provide assurance of authenticity for consumers. In that way, when consumers purchase products with such a word mark, they would be assured that the items have gone through the scrutiny of the communities and that the authenticity is guaranteed.
This is also a national issue that Aboriginal Tourism Canada looks at. In B.C. we are clear in our thinking that that kind of authenticity, standard and word mark needs to happen at the community level and at the regional level, and that we need to take it to the national level. However, it begins in our communities. Does that help?
Senator St. Germain: Well, it does help. I visited the Crow Nation in Montana. I asked one of their leaders whether a particular item was authentic. He looked at me and said, “I am not sure whether it was a little brown guy like me or a little white guy like you that made it.” He said that he honestly did not know. How has this evolved and how is it managed or administered?
Ms. Baptiste: One of the keys for the Blueprint Strategy during the implementation phase is to put that process together and take it to our communities so that we can be clear with them and they with us. We need to ask them what is authentic, how they want to communicate that in the marketplace and how we can help them to do it.
The Chairman: I have an experience that involved bannock. We started a bed and breakfast and conference centre called Bannockland, so I know there is magic in bannock. Ms. Watts, you went to university and studied anthropology and yet you were diverted to the restaurant business. Your story was most interesting and I thank you.
Mr. Sterritt, please proceed.
Art Sterritt, Executive Director, Coastal First Nations: I thank the committee for inviting the Coastal First Nations to participate in this session on economic development.
Too often First Nations and government do not take the time to talk directly to each other. Instead, we separately take our issues down different paths. Today, Coastal First Nations are moving towards bridging that gap. We often act as though relationships between government and First Nations are little more than jurisdictional battles over hot- button issues. We tend to ignore the many similarities between First Nations and government that offer opportunities for co-operation.
Both First Nations and government are confronted with limited budgets that have to be used efficiently while trying to provide comprehensive services and programs to our citizens. We are trying to promote economic development while protecting the environment and quality of life. We agree that we need to create increased economic development opportunities and more jobs for First Nations people. As responsible governments, we need to sit down and work towards mutually acceptable solutions with the knowledge that these issues can and will be resolved.
The Coastal First Nations is an alliance of First Nations on British Columbia's North Coast, Central Coast and Haida Gwaii. The Coastal First Nations include the Wuikinuxv Nation, Heiltsuk, Kitasoo/Xaixais, Gitga'at, Haisla, Metlakatla, Old Massett, Skidegate and the Council of the Haida Nation. Our numbers are around 15,000 and we make up probably the largest part of the population within our geographic area.
Geographically, Coastal First Nations occupy the northern and central coast and Haida Gwaii areas of B.C. from the Alaska border to the north end of Vancouver Island. Our challenge is to develop a conservation-based economy on B.C.'s North Coast, Central Coast and Haida Gwaii. To do so, there must be a recognition of the inextricable link between economic and ecological sustainability. We do not believe it is possible to achieve one without the other. A new strategic approach to development must include: sustainable ecosystem-based management of marine and land resources; increased local control and management of forestry and fisheries operations; coordinated development through regional strategic planning and forestry, fisheries and tourism with an emphasis on value-added initiatives; and partnerships and cooperative arrangements with governments, industry, environmental NGOs and other stakeholder groups.
For thousands of years First Nations carefully managed the abundance of natural resources in the sea and on land by relying on traditional knowledge. Many believed that this abundance would carry on forever. However, we found out that they were wrong. Resources continue to be taken from our traditional territories yet our communities continue to suffer from weak economies and high unemployment. Coastal First Nations have watched as natural resources have been exploited for maximum profit over the last 100 years. The resources have been decimated. This has caused enormous economic, social and cultural damage to our communities. Most of our communities suffer high unemployment, with 80 per cent unemployment and higher being the norm. Conditions are such that piecemeal efforts at rebuilding the coastal economy have proven ineffective for most coastal communities.
Our communities face numerous challenges, many of them similar to those of other First Nations communities throughout the province and the country. These challenges have been well documented in numerous reports, including the Harvard Project on American Indian Economic Development. One of the Harvard Project studies, Seizing The Future: Why Some Nations Do and Others Don't, states:
...sustainable economic development, it turns out, is dependent not so much on economic factors such as education or natural resources or even location as it is on a set of distinctly political factors.
The factors include having capable and stable governance institutions, decision-making powers, strategic planning and the development of institutions that are culturally relevant. Other critical factors facing our communities include a lack of capacity, difficulties in obtaining long-term funding commitments required for business and capacity building, difficulties gathering equity to participate in economic development opportunities and accessing capital. Public policy solutions must recognize that we want to be full participants in deciding our future. Governments, industry, NGOs and other interests must resist the urge to impose paternalistic solutions.
Despite many barriers, some of our nations have made great strides in moving their communities toward healthy and diversified economies, but the challenge for other nations with limited access to economic resources is too great to go alone. First Nations, government, industry and others all have a role to play in the development of our economies and we, the Coastal First Nations, have made it a priority to work with all parties involved to ensure we have a healthy coastal economy.
For many years out communities worked in isolation. It was only five years ago that leaders of First Nations communities along the coast gathered for the first time to discuss common problems such as high unemployment, lack of economic opportunity in the resource sectors and lack of access to resources in our traditional territories. These are common to all of our communities. It was clear from the outset that our strength would come from forming a coast- wide united front. Together we could make progress on socio-economic issues that we had been largely unable to do as individual communities.
We set up the Turning Point Initiative office, which operates under the direction of a board that approves an annual work plan for the office and gives final approval of all policies and procedures. Our board meets quarterly to review progress and provide direction on future activities. In addition, our executive committee meets on other occasions as required. Our office provides strategic regional planning and negotiation and administrative support to coastal First Nations on environmental and economic issues. The overall direction of the TPI office is provided by the strategic plan provided by the board.
The Turning Point Initiative was created with the conviction that if a conservation-based economy is to succeed, our active and meaningful participation is essential. We believe that the people who best know, use and protect bio- diversity are First Nations living in these lands and waters. Our experience has taught us that strong and thriving Coastal First Nations cultures, with recognition of our Aboriginal Title and Rights, is the key to a conservation-based economy in our territories. Over the past four years the Coastal First Nations have played a leadership role in bringing together a wide range of interests on the coast to address unsustainable policies and practices that have damaged the environment and devastated coastal economies. We believe that empowered First Nations communities can develop win-win partnerships with surrounding economies, leverage resources and build strong networks for increased economic development.
The Coastal First Nations provide a neutral venue to discuss regional economic issues in a strategic manner. Working together, our nations are moving toward increased economic opportunities for all citizens throughout the region while successfully preserving our culture, our lands and our water. By approaching our work on a regional level, we strike the balance between cultural diversity, economic prosperity and environmental protection. We believe that to have a sound regional planning process, we must build coalitions of public and private interests. This is the time to develop partnerships that can draw on the talents and commitment of all citizens, leaders and communities on the coast. By providing for efficient use of land, infrastructure and other resources, our communities also provide critical benefits to the region's and province's economy and environment. We have begun a number of projects on the coast that are done on a province-wide basis. One is the Shellfish Aquaculture Initiative with 26 pilot sites extending from the top end of Vancouver Island all the way to Haida Gwaii.
Coastal First Nations recognize that our economic development ambitions need to extend beyond the current fisheries activities. Our Shellfish Aquaculture Initiative offers diversification through a new avenue of long-term, conservation-based economic development by active participation in an ecologically sustainable shellfish industry. The active participation in the shellfish industry will help achieve sustainable resource use in our traditional territories. One of the conclusions in the 2003 Report of the Auditor General of Canada to the House of Commons stated that federal organizations need to re-think how they support First Nations in overcoming barriers and in taking control of economic development. In particular, federal organizations need to consolidate the administration of business programs and make them more adaptable, help First Nations identify and build institutional arrangements in a timely way and use a more horizontal approach for economic development planning.
We agree with the Auditor General's recommendations. However, judging from recent experiences, this recommendation has yet to be implemented by the federal government. Our shellfish pilot project provides a clear picture of the bureaucratic maze that we face when trying to build a sustainable coastal economy. While we have made progress on this initiative, we have had to overcome some major barriers. We appreciate and acknowledge the support we have received from the federal government, however, federal program criteria has proven to be difficult to adapt to our regional shellfish project. We have had to pursue funding from three departments , each requiring a separate application process, due diligence process and progress reports. Each department supports only some aspects of our proposal. This tells us that federal departments must act in a much more cohesive manner. As well, we are often faced with slow government approval processes. These delays can result in lost economic opportunities or increased costs to business ventures.
For decades, First Nations have told government that access to resources within our traditional territories is either restricted or prohibited by regulation and policies. Without access to natural resources, it will be difficult to become part of B.C.'s economy. A report by the Coastal First Nations entitled, Our Future Harvest — A New Approach to Coastal First Nations' Commercial Fisheries, outlines a new approach to resource allocation that can be implemented by joint agreement between the federal and provincial governments and the Coastal First Nations. Our report recommends a way to provide economic benefit and employment to First Nations through access to local fisheries resources. The approach would provide Coastal First Nations with a defined share of the commercial fisheries within our traditional territories. This share would be phased in over the next five years as an interim measure and would be a building block to support the negotiation of an interim or a final treaty agreement. Our approach is designed so that each First Nation would obtain a defined share of the total allowable catch from all of the fisheries within its traditional territories, hold the licences communally on a continuing basis, fish these commercial licences under the current licensing regime, and establish a Coastal First Nations trust as the vehicle to purchase its share of licences and provide support to participating First Nations. Coastal First Nations live in an area of extensive and valuable fisheries and resources but with limited commercial access to them we will fail in our efforts to improve our lives.
In the area of tourism, we have worked together recently to undertake a feasibility study on working with an established tourism company to establish three high-end lodges throughout the coast. The First Nations have come together to undertake this review. Our findings have concluded that there are real opportunities to establish three high- end lodges in our traditional territories. We plan to continue to work together on partnerships with the tourism company to establish this initiative. Working together, strategic planning and building partnerships give us the ability to compete in the global economy.
We have found that we need to build the capacity to deal with this, as you have heard from the other witnesses today. A critical factor for long-term economic capacity building for our communities is ensuring a healthy, well- educated and well-supported workforce. Development will be difficult if our people are preoccupied with financial crises, health problems or poor living conditions. Good living conditions in our communities are essential to our economic success. Developing capacity and eliminating inefficiency will do a great deal to build our economies. We must build our governmental capacity by implementing good governance practices and by developing institutional infrastructure. While this is a difficult goal to achieve, we believe this will spur the growth of capable First Nations institutions. Simon Fraser University's Learning Strategies Group and the Turning Point Initiative have embarked on a planning process to address the capacity building needs of Coastal First Nations. In order to implement our economic development strategies, it is essential that capacity assessment and development occur within each of the participating communities. The outcome of our planning process will be a comprehensive learning needs and capacity development plan and implementation strategy. The Learning Strategies Group specializes in client-based management education. It has developed a distinctive way of building learning partnerships with First Nations to help them to achieve their goals. This approach assists First Nations in creating clear and achievable educational objectives that fit into a long-term economic strategy.
In our work we try to strengthen and improve conditions in communities by engaging community members and outside stakeholders in a process that builds leadership and capacity from within, while respecting and valuing the rich diversity represented in the province. We support the efforts of our member First Nations to build a web of relationships and encourage community participation that builds capacity so that we can address the challenges and opportunities that we face. The Coastal First Nations work collaboratively with a variety of organizations to support our work. We strategically partner with organizations and academic institutions already conducting work in key areas to leverage resources, avoid duplication of work and set up networks of people with similar interests. Our goal is to add value to the work of our partners through increased opportunity for input and feedback from our communities and leaders.
We are developing First Nations government structures. Size, remoteness and proximity to resources can influence a First Nations ability to develop economically. However, research has shown that development of stable political structures, the separation of business and politics and strategic planning make a difference between achieving economic success or continuing dependency on government. A stable government and relevant institutions having a clear vision of what it will take to improve the coastal economy is very important. Our vision of a sustainable economy guides our decisions on what economic development opportunities we pursue.
Significant progress has been made since the establishment of the Coastal First Nations. We are stronger and more focussed as agreements are now turning into opportunities that will bring much needed jobs to our communities. One of the greatest responsibilities we have as Coastal First Nations leaders is to provide an economy that includes a diverse menu of sustainable economic opportunities for future generations. If we are to achieve that goal, we must focus on the long term and be strategic in planning for the future. It is an enormous challenge to balance our employment needs with environmental protection, but we have to do it if we want future generations to have a full menu of economic options.
Our work has met with success through building strong governance structures, ensuring strategic thinking in our planning process, engaging with partners who have the knowledge and the background to make it work, working together to obtain economy of scale to compete globally, and building accountability regimes to ensure support of our communities.
As I close today, I would like to say that we want to sit at the table to develop co-operative relationships whereby First Nations and government can work together for the growth and development of economically sustainable communities on B.C.'s coast.
Thank you for this opportunity.
The Chairman: I would be interested in knowing what businesses have been started by the Coastal First Nations.
Mr. Sterritt: One is the shellfish industry that we started on the coast and we are looking at starting up 12 shellfish farms. Currently we have funding of almost $1 million per year for pilot projects. When we launch this initiative, we expect it will cost about $1 million per community to start a full-fledged shellfish industry that spans the central and north coasts and Haida Gwaii. We have negotiated forest agreements with the provincial government such that each of our First Nations has a negotiated forest tenure. We are looking at how to amalgamate those businesses.
Another industry start-up is in tourism with the three high-end lodges that I mentioned. We are partnered with the most expensive and exclusive lodge on the coast, which happens to exist within my traditional territory. They have agreed to partner with us to establish three more of these lodges throughout the area. The businesses will be owned by all the First Nations, not just by the First Nations in whose territory they exist.
There are many others, including one that senators might be interested in. If you have Senator Austin's ear, you might want to pass this on. We have challenged the environmental community, as we go forward with land-use plans for the coast, to help Coastal First Nations to build a sustainable economy based on ecological principles. In doing so, the environmental community has accepted the challenge and has raised, through various foundations in the U.S., $60 million to invest in the coast of British Columbia. Currently we have a commitment of an additional $30 million from British Columbia, which will be announced within the next couple of weeks. I have met with Senator Austin and others about the fact that we are putting together a $200-million package that will allow our people to start building a new economy.
Some of you might be aware that on the coast of B.C., until about 20 years ago, our people were fully employed in the fishing industry, which has disappeared. In my community, it simply does not exist. We have the opportunity to build an economy for all of our coastal people that is more sustainable than what we had in the past. Those are some of the issues that we are working on as a group.
The Chairman: You mentioned the Harvard study and Professor Cornell, who has travelled to your area. He also appeared before this committee and presented his findings. You took note of some of these: good governance, culturally appropriate institutions, definite rules, and stable government. You are certainly aware of what is necessary to succeed in business and so you are adapting to using those principles.
Mr. Sterritt: That is right. Our group invited Dr. Cornell and Dr. Begay to share the findings of their study in the U.S. We also invited experts from the East Coast who have helped us to build the shellfish industry. As a group, we were able to invite people to share their lessons and information with us. Some of our communities are as small as 600 members so, given their resources, bringing in experts from Harvard would never be economically feasible. However, when we work as a group, we have economies of scale, so we are able to bring in the expert advisors. With some 15,000 of us working together, we are able to bring those things to bear more directly on what we do.
Senator Christensen: What is your First Nations position on the possibility of becoming involved with oil and gas development?
Mr. Sterritt: The Coastal First Nations commissioned a study, which was funded by the Offshore Oil and Gas Office in British Columbia. The findings were such that if offshore oil and gas exploration were to proceed and oil and gas were found in the offshore, the number of jobs created would be about one half to one third of the jobs created in the shellfish industry. We do not view oil and gas as a major opportunity because the jobs created would go to other specifically skilled workers. As well, the jobs would be few by comparison. Our people are not willing to accept the risks associated with those jobs.
The economy that we are trying to build is based on sustainable principles. Offshore oil and gas is not that sustainable. Speaking of energy, we are looking seriously at wind power, which we think could be a major resource within our traditional territories to provide energy to the rest of B.C. and Canada. To the best of my knowledge, some senators have an interest in wind power.
We are looking at better, friendlier options than offshore oil and gas.
The Chairman: Thank you, Mr. Sterritt. Ms. Figgess, please proceed.
Lynne Figgess, CEO, GTM Consulting: Senators, we are unaccustomed to the formal presentation process but we will do our best. We do our best in a question and answer situation. At any time that you want to interrupt, please feel free to do so.
GTM Consulting was founded in 1998 and is a project management and engineering company, which is not a typical service provided by a First Nations company. We have two topics today: our difficulties with financing and our difficulties in creating relationships with First Nations supporting First Nations.
I will speak to the financing issues first. When we started business in 1998, we approached a standard financing institution, a bank, but were unsuccessful in obtaining what we needed. We then went to Aboriginal Business Canada but were unsuccessful there as well. In the end, we self-financed. Ms. Atkinson and I took the position that the employees would be paid before we were paid. That lasted for about six years before we were financially capable of managing the business as other businesses are managed.
When we sought financing through the chartered banks, we found that while they “promoted First Nations,” their programs came with attached penalties because they had a preconceived notion that we would fail and were, therefore, considered a higher risk. As a result, we pay a higher interest rate; we have additional costs to insure the loan; we have additional costs to secure the loan, because we required the government to do that for us; and the loan set-up and administration was more time-consuming than it would be for others. We all know the saying “time is money.” For someone trying to build a business, money is lost when time is spent on other activities. To make a long story short, the predetermined assumption of failure in conventional financing has penalties attached. The longer process, higher interest rates, more paperwork and higher internal costs have cost us an average of 10 per cent more than it would have cost someone else.
On the part of non-conventional financing and grant options, such as Aboriginal Business Canada, capital corporations set up throughout B.C., and conventional business development corporations, we found a general lack of understanding of what we do in business. We are not traditional or what they would see normally coming through their doors. They could not grasp the concept of our business. For that reason, we were denied financing. We applied again but they said, no, again. We persevered through four attempts before one institution believed our story and that we could actually do it.
The other challenge arose because we were already set up in business so we had to prove that we truly needed the financing. Proving that to someone who does not understand the business is rather difficult. The lengthy and tedious explanations took approximately eight months. To secure our non-traditional financing through programs and grants that are supposed to be designed for First Nations took us eight months. We had to hire a consultant to come with us to help us get through the bureaucracy of the entire process. It was an expensive process to create confidence because, of course, it all comes back to time and money.
It did not seem to matter whether we were dealing with conventional or non-conventional financing. There was a predetermined notion of failure — they expected us to fail, and with that came the additional costs due to presumed higher risk. In the end, we obtained what we needed but we never would have succeeded had we not pursued it each and every day for eight months. It took time and patience. We felt like pioneers in a way and hopefully our efforts will make it easier for others going in search of financing.
We overcame it, apart from improvising and adapting, by putting all profits straight back into the company; by giving our pay to employees; by securing non-non-conventional financing at a 12 per cent interest rate; by not accepting the word “no;” and by doing without. For example, when we could not afford to buy the technology we needed, we worked manually. When we had to work manually, it meant working 14 hours per day, seven days per week. That is what we did because it is all about what you have to do to get the job done. It affected the business because it slowed the growth of the business. The business was unable to grow because we could not financially support it. If a business is unable to grow, then it cannot keep up with the competition. That was my financing experience.
Senator St. Germain: Ms. Figgess, do you think you and Ms. Atkinson were picked on because you are women?
Ms. Figgess: When we were writing about our experience, we decided not to bring that into the equation because this is not a Senate “Aboriginal and Women” committee hearing. I think it had a great deal to do with the fact that we are women.
Senator St. Germain: Is one of you an engineer?
Ms. Figgess: Neither of us is an engineer, so that made it even more difficult.
Senator St. Germain: Do you hire engineers for the firm?
Ms. Figgess: Yes, that is correct. We are entrepreneurs, not engineers. That fact was difficult to impart at the time.
Senator St. Germain: You are miracle workers. Are you both Aboriginal?
Ms. Figgess: No, I am not Aboriginal but Ms. Atkinson is Aboriginal.
Senator St. Germain: I started a business so I know that it can be frustrating. My son started a business. First, he came to me for money and I set down some parameters. He decided that he did not want my money and went to a chartered bank instead. The bank told him that he had a great idea that would likely succeed but that he should come to them for help in two years' time once the business was up and running. To this day, I shake my head when I see the man who said that. I understand well what the two of you have been through.
Ms. Figgess: I have owned businesses on my own as well and went through the same experience. When you have $200,000, they will give you $200,000. In our case, when we had $200,000 they would give us $200,000 but because we were First Nations, they wanted $200,000 more. Conventional financing was looking for security on the loans because it was 200 per cent more than we were asking for.
Senator St. Germain: One bank, I believe it was RBC, was supposed to have a special section in its Vancouver operations to deal with financing for Aboriginal initiatives. I do not want to belabour the point.
Ms. Figgess, you delivered your message well. Yes, obtaining financing is a challenge. I do not know how you overcame the obstacles because as you know, once you have the money, they are on you continually to try to give you more money. When you ask them how they expect people to start businesses if they will not give them a break and take a bit of risk, they reply that they are not in the business of taking risks.
Ms. Figgess: Our most difficult experience was with the institution that you mentioned. The financial institutions' approach when we asked about the process always gave us a clue. If they came on like gang-busters promoting their First Nations programs, we generally found that it was a bunch of horse wash. Then, they would send over the wish list to secure our financing. There was no way in my position as CEO that I could accept that on behalf of the company. The cost far outweighed the risk, I guess.
Senator St. Germain: How do you stand now financially? Is the business in good shape?
Ms. Figgess: We were in good shape then and we are in good shape now. We wanted to expand, and that was difficult. When we first started the business, there were transitions. There was GTM start-up — Kraft Macaroni and Cheese; give our pay cheques over; and do what we had to do. To start this company with project management and engineering, Ms. Atkinson and I had a couple of contracts but we could not get the financing so we taught among the First Nations. We solicited all the bands and First Nations groups to tell them that we could teach them how to start their own businesses; teach them first aid; and teach them about using computers. We spent our first six months in business doing that in order to finance the company. After that, we trundled along but we needed to expand. We knew that we needed to have conventional financing in place in order to grow the company into the planned $200-million- per-year international organization. Eventually we came to the realization that we had to give in and seek conventional financing. We also realized that we needed to be paid for our work or there would be no point to being in business. That, in a nutshell, was our experience.
The next key issue that we dealt with as an already-developed company was First Nations Supporting First Nations. One of our corporate goals this year was to present ourselves to the Squamish Nation or to most of the people here today that are speaking to developing their Nations, their lands and their socio-economic opportunities. In order to do that they need project management and engineering. They need to build the golf course or the shellfish farming facilities. That is what our business does. We take a project from inception to delivery on behalf of the government. Not once since we have been in business, were we brave enough to say that we were First Nations because of a preconception in industry that we, for example, did not have to pay taxes. However, people in the industry are remiss in those ideas because a corporation is a corporation, and any corporation pays taxes. Another notion was that we could not do the job because we are First Nations. Therefore, we never told the government that we are First Nations to help us win contracts on projects. We decided that it was sufficient for government to know that the business is run by two women.
This year, we decided that enough is enough because we needed to celebrate the fact that we are First Nations, to ensure that we are giving back to our communities and to ensure that First Nations are supporting First Nations. Who do you call to do this? The Squamish Nation is the closest to us because we are in Park Royal and they own our land. The challenge was how to find the audience to communicate the message that any First Nations can do the job as it is being delivered today by someone else. People will demand this, this and that and we will reply that we can deliver all of that internally. We will tell them that we are as strong as they would like us to be, that we are as competitive and that we are able to give them the product. Yet, we cannot find an audience for our message but we will try. We do not have the solution. We have spent a year knocking on doors. We do not know when a door will open, but it will happen eventually. It is a process.
It does not matter that you are a small engineering firm competing against SNC-Lavalin, the largest engineering firm in the Lower Mainland, for work on the RAV Project. Incidentally, getting on the RAV Project was much easier than getting into First Nations Supporting First Nations. Our challenge is that we do not know who to contact. We do not know how to deliver ourselves in an appropriate manner with respect to culture, to understanding people's time or to whom we should speak to achieve an end result of establishing that relationship. It is all about relationships, whether you are First Nations. How do we convince anyone, First Nations or non-First Nations, that it is time to let go of the way it was 50 years ago and open up our doors to the fact that First Nations children attend university, that UBC has a program set up for First Nations peoples, that BCIT has a First Nations program, that technical and management support is in place, and that we can provide equally the tools that we need to do our jobs. How do we give potential businesses a level of comfort to go in-house.
We have not found a solution to these questions, yet. We know there is a business directory but we do not know how well utilized it is or whether it is current or complete. Can we have government incentives for First Nations to Support First Nations? Can we educate with respect to services and the industry today versus what it used to be? Can we have a government-assisted liaison? For example, if GTM chose to work for First Nations, we would need to know whom to call locally to introduce us and get our foot in the door. What is the incentive for someone to respond to that need? You cannot get anywhere until you have established that formal relationship.
For First Nations or traditional businesses going through change, we are in business to help them manage that change. What change management process is in place and what check and balance is in place so that we can go forward feeling that we have gotten somewhere?
The bottom line is that GTM Consulting — Jane Atkinson, the team, the company — has succeeded based on determination, drive, improvising, a strong internal team, not accepting the word “no,” banging on doors until we heard “yes,” and patience. Failure for us was not considered an option.
The Chairman: Thank you. Ms. Atkinson, please proceed.
Jane Atkinson, President, GTM Consulting: Ms. Figgess has covered everything.
The Chairman: I am curious to know about your company's growth.
Ms. Figgess: GTM Consulting has doubled its business over the last three years. Annual revenues are $5 million and our profit margin is 15 per cent to 30 per cent, averaging 20 per cent. We have 25 in-house professionals comprising project managers, communications experts, engineers and support staff. We expanded office staff from 14 to 25. We suspect that because of construction and related work for the Olympics on deck for the next four years, team members will number 50 within one and one half years. Currently we are looking at expanding to the United States. We have spent a significant amount of time researching that, including how to use the Jay Treaty to do our cross-border transactions.
Currently, we are working on the Richmond-Airport-Vancouver rapid transit, or RAV Line; on the Sea-to-Sky project; and at UBC. Those are the three largest projects in British Columbia. The next one for us will be Enbridge's Gateway Project at Kitimat.
Senator Christensen: Over the last year, what First Nations have you built and managed?
Ms. Figgess: We have not done a single First Nations project since the inception of the company.
Senator Christensen: Is that because you have not been able to get your foot in the door?
Ms. Figgess: That is correct.
Senator Zimmer: Reflection is good for the soul. What was the final chapter of that first situation you faced when they would not give you any support? What are they saying now?
Ms. Figgess: Are you referring to our financing challenge?
Senator Zimmer: Yes. What are the financial people saying now?
Ms. Figgess: They ask: “How can we help you?”
Senator Zimmer: That is what I thought.
The Chairman: Thank you for your presentation and for taking the time to speak to us. The information you provided will be helpful in our report deliberations. Certainly, we will be mindful of your struggles. You have shown us that it takes sheer determination to succeed and you will be an inspiration to many other people.
Ms. Figgess: I do not know if this is the appropriate venue but we would like the opportunity to follow-up on our business to say how we got there and how we finally met our existing challenge, and vice-versa.
Thank you for the opportunity to speak today.
The committee adjourned.