Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 12 - Evidence - Meeting of November 28, 2006
OTTAWA, Tuesday, November 28, 2006
The Standing Senate Committee on Aboriginal Peoples met this day at 9 a.m. to examine and report on the involvement of Aboriginal communities and businesses in economic development activities in Canada.
Senator Nick G. Sibbeston (Deputy Chairman) in the chair.
[English]
The Deputy Chairman: Good morning. Our committee is convened this morning to hear further witnesses on our study to examine the role of Aboriginal people in business and economic projects in our country. We have been to all regions of the country and we have heard many witnesses. Today we have before us representatives from Nunavut Tunngavik.
Alastair Campbell, Senior Policy Advisor, Nunavut Tunngavik Inc.: Thank you, Senator Sibbeston. With me today are me Brad Hickes, Acting Director for Business and Economic Development, and two people who are not part of the official Nunavut Tunngavik delegation but who very much interested in what we are saying, Okalik Eegeesiak from the national Inuit organization, the Inuit Tapiriit Kanatami, and Glenn Cousins from Nunavut Economic Forum.
Nunavut Economic Forum is a broad umbrella group that has more than 20 member organizations. It was set up as a think tank for Nunavut economic policy and it coordinates the various policies. Nunavut Tunngavik, the Government of Nunavut and the federal government are all part of it, along with many other groups and organizations, including development corporations. It has an independent perspective, but many of the same concerns and certainly the same interests.
I would like to thank the committee for the opportunity to make the presentation this morning. NTI's president, Paul Kaludjak, very much wanted to be here today. He asked us to extend his regrets; he is not able to come because of prior commitments.
Nunavut Tunngavik Inc., NTI, represents Nunavut Inuit and is responsible for implementing the Nunavut Land Claims Agreement. There are about 25,000 Inuit beneficiaries registered under the agreement and 90 per cent of them live in Nunavut.
The Nunavut Land Claims Agreement was signed in 1993. It is a treaty under section 35 of the Constitution Act, 1982. It is the biggest land claims agreement in Canadian history. Nunavut covers one fifth of the land mass of Canada and also includes adjacent marine areas. Under the Nunavut Land Claims Agreement, fee simple title to about 18 per cent of Nunavut is owned by three regional Inuit associations, and these three regional bodies are represented on the board of NTI. A further 1.8 per cent of subsurface title is owned by NTI.
NTI participates in national and international Inuit and Aboriginal bodies. The president of NTI is a member of the board of the Inuit Tapiriit Kanatami and the Inuit Circumpolar Council that represents Inuit from Greenland across to Siberia. NTI is also active in the Aboriginal land claims agreement coalition established in 2003. Its aim is to develop a forward-looking policy in implementing modern treaties, that is, modern land claims agreements. Besides NTI, in the coalition there are Aboriginal groups from Labrador, Northern Quebec, James Bay, Mackenzie Valley, Yukon and Northern British Columbia.
The coalition held two major conferences on claims implementation in 2003 and 2006. I would like to tell you that the coalition will be meeting in Ottawa on December 6, and I expect that this committee will be receiving a letter from the coalition. NTI would very much encourage members of the committee to meet with the coalition at that time, if possible.
The concern of this committee is conditions that foster or hinder development in Aboriginal communities. We can provide some comments on that from a Nunavut perspective. Our approach is based on Nunavut Economic Outlook and Nunavut Economic Development Strategy and we will leave copies of those documents here with the committee.
Essentially, we follow the Conference Board of Canada in talking about development as four forms of capital that must be developed: natural, physical, human and organizational. Each has its own particular role or place. What is important is that these are synergistic; you cannot isolate one from the other. We will use this framework to outline some of the opportunities, challenges and obstacles facing development in Nunavut.
Mr. Hickes will now talk about some of the natural capital and what it means in terms of Nunavut's economy and the place of Inuit in that economy.
Brad Hickes, Acting Director, Economic and Business Development, Nunavut Tunngavik Inc.: As Mr. Campbell just mentioned, I will discuss natural capital. Natural capital includes water, vegetation, land, minerals, oil and gas, fish, animals and the landscape. It also includes knowledge of these natural assets.
Natural capital sustains a traditional economy. Nunavut's economy depends both on land-based activities, such as hunting and fishing, and on wages and commercial activity. While it is difficult to quantify the value of the traditional economy in monetary terms, there are tangible quality of life benefits, as well as the benefits of nutritious food, cultural heritage and some economic returns.
The Baffin Fisheries Coalition has worked closely with Royal Greenland, a Greenlandic Crown corporation, and has obtained 51 per cent ownership of two vessels, the Inuksuk 1 and the Ujukuak. Earlier this year, Nunavut secured a 2,500-tonne turbot quota increase in the offshore division 0A. As of November 14, 2006, Nunavut vessels successfully fished their entire turbot quota in the division 0A. This shows that Nunavut has the ability to expand its fishing industry.
As expected, Nunavut's mining industry output decreased from 2003 to 2006 as mines closed — Polaris, Strathcona and Lupin. The pace of mining development is now growing with the opening of the Jericho mine this summer and the recent approval for two more mines to go ahead. Exploration continues to be intensive and more development is anticipated in all three regions of Nunavut.
Impact benefit agreements are provided for in the Nunavut Land Claims Agreement and can secure community employment and commercial benefits from mining developments. The Nunavut Land Claims Agreement also provides for a small portion of Crown royalties to be paid to the Nunavut Trust.
Considerable investments are being made to increase our knowledge of our natural capital, including geosciences and geological mapping, fish stock studies and wildlife studies, using a combination of conventional scientific methods and traditional knowledge.
The northern environment is vulnerable to contaminants that can get into the food chain at concentrated levels and ultimately be consumed. In the Baffin and Kivalliq regions, more than one quarter of the population is taking in levels of mercury through country food — that is caribou, seal and all the wildlife harvested through traditional hunting activities — that are considered above the level known to be safe. Studies have also found high levels of PCB concentration in Inuit women, including those living in Nunavut.
As part of natural capital, we would like to focus on tourism as a sector of the economy that is closely tied to natural capital assets. Tourism was identified in Nunavut Economic Development Strategy as offering excellent prospects for large-scale growth. This sector can provide some of the economic diversity required for the Nunavut economy. A key factor that makes this sector desirable is that it helps stimulate economic activities in remote areas that have few economic alternatives.
If managed properly, tourism is environmentally sustainable. There is the SMART program, a Sustainable Model for Arctic Regional Tourism, which gets more into ecotourism and fits well with Inuit culture.
With additional resources and training opportunities, more Inuit would have access to an economic sector that provides a bridge between land-based activities and the commercial economy. Direct funding for tourism amounts to $2.8 million from the Government of Nunavut. Tourism also receives federal funding through Indian and Northern Affairs Canada, Aboriginal Business Canada, Canadian Tourism Commission, Canadian Tourism Human Resource Council, Canadian Heritage, and Parks Canada.
An issue with these funding programs is their accessibility to Nunavut Inuit. There are reoccurring delivery problems. Program funding channels are designed and operated based on Southern Canadian models, which reflect other geographic needs and might not be suitable for Nunavut.
That is the natural capital. I think Mr. Campbell will speak more about the physical capital.
Mr. Campbell: Physical capital is usually understood as infrastructure — housing, government buildings, et cetera. Often one hears the comment that so much money is spent in Nunavut with little return. Partly that is because there are 25 communities in Nunavut. Because they are isolated from each other, each community needs a certain amount of infrastructure, such as airstrip, power plant, RCMP detachment, municipal facilities and school. There are no roads or rail links to other parts of Canada or between communities. Transportation is by air or by sealift, with a shipping season that runs from July to November in the southern parts of Nunavut.
There are major diseconomies of scale in Nunavut's physical infrastructure and in other aspects of Nunavut's economy as well. Connected to this is what we could call an infrastructure deficit. Much of Nunavut's infrastructure is aging; it is overused. Despite reliance on sealift for construction materials, fuels, food and general cargo, there are no deep-water port facilities. The lack of deep-water port facilities creates problems for construction, such as timing problems for unloading materials. It also limits Nunavut from obtaining the full benefits of its commercial fishery and reduces tourism potential, because tourists have to be taken from the boat and put into other boats to be taken to shore.
There are no hydroelectricity plants or grid connections. Diesel fuel is used to generate electricity. Electrical costs range from about somewhere in the region of 40 cents per kilowatt hour to $1.12, which you can compare to approximately 7.5 cents per kilowatt hour in Ottawa, for example.
It is worth mentioning that climate change is having a severe impact on Nunavut's physical capital. Changing weather conditions can restrict access to mineral resources as winter roads become less reliable. We saw this last year in the Northwest Territories in terms of access to mines, and also in Nunavut with the developing Jericho mine. Also, much of the infrastructure is built on permafrost. Among the effects of climate change are changes in permafrost, which may have major cost implications.
Housing is an important example of the deficit in Nunavut's infrastructure. Nunavut currently has the highest rate of overcrowding in housing in Canada. It has been demonstrated in a study by Frank Tester, a sociologist at the University of British Columbia — and it is generally known apart from that particular study — that many negative social indications, such as substance abuse, family violence and even suicide, are linked to overcrowded housing conditions. Poor health conditions also come from overcrowded housing.
In 2005, there was a joint NTI-government report on housing, which concluded that about 500 to 600 units a year are needed to cover the backlog of housing and to maintain progress in relation to the expanding population.
The federal government recently provided $200 million to the Nunavut Housing Corporation, and this is expected to provide 725 to 750 units over five years. We certainly recognize the importance of this contribution as very valuable, even though it is short of being able to provide the 500 to 600 units that are required annually. We mention this not only to acknowledge the step that has been taken but also to indicate the real size of the step that needs to be taken.
I would comment briefly on two other sections, and perhaps Mr. Hickes can speak to human capital.
Mr. Hickes: Human capital is the people who live in Nunavut, including their knowledge, skills and abilities. Based on a 2004 estimate, Nunavut's population is around 30,000 people. Approximately 85 per cent of the population is Inuit. Iqaluit is the largest community and the capital and has a population of about 6,500. It is also the only tax-based municipality in Nunavut. Nunavut has the youngest population in Canada, the median age being 22 years as compared to a median age of 37.6 years for Canada as a whole. It is a very young population.
Mr. Justice Thomas Berger has found a failure in the Nunavut educational system with regard to successfully educating Inuit students. The graduation rate is only 25 per cent. In his view, the failure to provide adequately for instruction in Inuktitut beyond the elementary grades bears a great deal of responsibility for this failure. Although the picture is bleak overall, there are hopeful signs. One of those signs is that the number of students applying for funding through Financial Assistance to Nunavut Students, FANS, has increased from 815 students in 2002-03 to 1,292 students in 2005-06.
In considering Nunavut's capital deficit, the health deficit must be acknowledged. The Nunavut government spends about 22 per cent of its GDP on health care. That is more than double the Canadian average. Transportation costs are also a major contributor to the high expenditures, but there are significant health concerns as well.
The infant mortality rate is three times higher in Nunavut than the Canadian average. Life expectancy for men is 67 years in Nunavut, compared to 75 years in Canada as a whole. It is 70 years for women compared to 81 years in Canada as a whole. As well, Nunavut has the highest tuberculosis rate in Canada. The rate of lower respiratory tract infections in Nunavut is among the highest in the world.
Mr. Campbell: I will cover briefly the last aspect of capital development. Organizational capital is often left out of the picture but, in fact, it is very important. By organizational capital we mean the structure and operations of government; the private sector; in Nunavut's case, Inuit organizations; non-profit bodies; and generally social organization as a whole. It is important that Nunavut is a territorial government like the other territorial governments. There is a land claims agreement that provides a single regime for the land claims settlement for the whole of Nunavut, giving some certainty. There is a difference between Nunavut and other jurisdictions in that regard. For example, industry knows what it is dealing with in terms of title to land, unlike in areas of Canada where claims have not been settled.
There are a number of institutions of public government. They are joint management boards comprised of Inuit and government representatives set up under the land claims agreement. However, there are some problems, such as the fact that the institutions for public government are not properly resourced. Recently, Justice Berger made an effort at conciliation between NTI and the government on what should be the resourcing level for these institutions. He has recommended resourcing needs, to which the parties agreed, but progress has not been made in securing the funding so we do not know where it stands. Unfortunately, implementation of the Nunavut Land Claims Agreement is a characteristic story of slow progress, perhaps no progress, even when there appears to have been an agreement.
It is worth mentioning government contracting. Government is the driver of the Nunavut economy, spending about 60 per cent of the territory's gross domestic product compared to only 22 per cent for the rest of Canada. Government contracting is provided for in article 24 of the Nunavut Land Claims Agreement, which requires the two governments to develop and maintain procurement policies for Inuit firms and for all government contracts. In accordance with article 24, the Government of Nunavut, with NTI, has established a policy that provides for bid preferences for Inuit firms and businesses, Nunavut firms, and local businesses. Nunavut Inuit firms may receive a 21 per cent bid preference on certain contracts.
There have been disagreements between NTI and the Government of Nunavut in developing this policy but at least we have something in common, while the same cannot be said for the Government of Canada. Treasury Board has told all departments to follow article 24 but there is no overall federal policy. The Nunavut Land Claims Agreement was signed in 1993 but article 24 has not been implemented since the signing. I draw your attention to a lengthy study recently completed by PricewaterhouseCoopers on implementation of the Nunavut Land Claims Agreement during the last five years. The study contains a lengthy chapter on article 24 and I would invite you to read that.
It is worth mentioning, perhaps, that the federal picture is not uniformly bleak. For example, the Department of National Defence, which is responsible for cleaning up about 15 old DEW Line sites across the North. DND negotiated a series of agreements with NTI between 1998 and 2001. The main agreements cover environmental standards, contracting procedures and monitoring. Through those agreements, we have been able to achieve more than 70 per cent Inuit employment on clean-ups and a greater than 70 per cent Inuit firm participation in the value of the contracting business component.
The Indian and Northern Affairs Canada has many high priority contaminated sites, most of them being old DEW Line sites as well. We are seeking an agreement with INAC similar to the one that we have with DND. INAC has agreed to negotiate with us on that subject, and we will respect that. Hopefully, we will be able to achieve a similar agreement.
I would be pleased to entertain any questions that you may have.
The Deputy Chairman: Thank you.
Senator Hubley: Good morning and welcome to the committee. You have done a great deal of work on coming together in organizations to tackle economic development. Certainly, I appreciate the way that you have looked at your four areas of strength.
I have a combined question with respect to two of your comments. It concerns the young population that you have and the educational systems you are able to provide. I think you brought it forward when you spoke about tourism and obtaining training opportunities for young people in that respect. Could you give us an idea of what the educational system is like and what opportunities young people have to move into different fields?
Mr. Hickes: Do you mean in relation to tourism?
Senator Hubley: Yes.
Mr. Hickes: Presently with tourism, much is being accomplished in the form of marketing. Of the present $2.8- million investment and the additional funding being provided through the federal government, the bulk is being put into marketing. The equivalent is not being placed into product development. Therefore, there are many marketing campaigns stating that Nunavut exists, but not enough is being done in product development to get those businesses off the ground.
However, you are completely right: the businesses that do exist, if completed properly, could be tied to the educational system. I do not know if it could be accomplished in the form of vocational training, for example, but there are community economic development weeks where tours visit the communities. Nunavut Tourism is part of that effort. They try to advertise the tourism sector as offering viable careers. The potential is definitely there. It would be a natural transition, as stated in the economic development strategy; namely, when these tourism opportunities exist, they lead right from land-based activities.
I think more can be accomplished with regards to that by diversifying the educational base and maybe changing the curriculum to fit into those other avenues. If everyone is put into the cookie cutter system and no marketing is being completed, there will not be any opportunities. Conversely, if not enough is done through product development and an investment made into helping these businesses start acquiring capital, then there will not be any jobs available to go into. I do not know if that answers your question.
Senator Hubley: Yes, it does. I was thinking along the lines of entrepreneurial programs for young people, not necessarily entering into tourism. I think it gives them an idea about the opportunities and provides the skills, if their interests lie in that specific area. They will have the confidence to go forward with that.
Mr. Hickes: Yes. Along with the community economic development weeks, Skills Canada provides a presentation on a program they offer based on entrepreneurial opportunities. There are contests available for people to participate in. Presently, that is a focus of other organizations, to tap into that and create a sense of entrepreneurship within youth.
Senator Peterson: You mentioned Crown royalties going into a development fund. Could you expand further on that? Is it a sharing of resource revenue? If so, how much is it?
Mr. Campbell: Yes. With respect to the funding under the Nunavut Land Claims Agreement, in Nunavut all Crown royalties go to the federal government. Crown land is still held by the Crown in right of Canada.
Because there are no operating mines, there have been virtually zero Crown royalties within the last couple of years. However, the land claim agreement provides that 50 per cent of the first $2 million of Crown royalties shall be paid to Nunavut Trust. Above royalties of $2 million, 5 per cent will be paid out.
Nunavut Trust was the body set up under the land claim agreement to administer the capital given under the land claim agreement over 14 years, totalling about $1.148 billion, plus those particular royalties. To make a rough analogy, the fund operates a bit like a pension fund. It invests monies and uses that to provide, for example, the operating money for NTI.
Senator Peterson: In your presentation, you also mentioned the fee simple on a considerable amount of your land, but also 1.8 per cent of the subsurface title. Does that refer to mineral rights?
Mr. Campbell: That is correct.
Senator Peterson: Why is the figure so low? Why is it only 1.8 per cent?
Mr. Campbell: I am not sure how that figure was arrived at. That was negotiated in the land claim agreement. When an agreement is negotiated, Canada is prepared to take title to so much land and provide title to so much land. That was the deal reached.
Senator Peterson: You also have mineral exploration and mines that will be opening up. Are you in a position to take advantage of that and benefit from those mines?
Mr. Campbell: Yes, very much so. Under the agreement, there is a requirement in most cases to negotiate impact benefit agreements. Through those agreements, arrangements can be made for training, hiring and the purchase of commercial benefits.
Second, Inuit land is often involved through access across the surface title. In some cases, there may be subsurface title. No mines have been operating in the last year or so. It is just beginning again.
Senator Peterson: That is why I asked you if you were ready. The smaller portions are land access, and you will not get much for that. I am talking about whether or not you will share in the resources. The resources belong to you. Will you get a fair return from them?
Mr. Campbell: I think there are two aspects to that question. One is with respect to the existing system. Second, if the Government of Nunavut is able to complete a devolution agreement with the Government of Canada and take responsibility for those resources the way a provincial government does, the full benefits would then return to Nunavut as a whole.
It is important to ensure that the royalties paid through mining developments and so on to the Government of Nunavut are not deducted back from the federal financing grant that is provided every year to Nunavut. This has been one of the difficulties in negotiations for devolution with the Government of the Northwest Territories, for example.
How much of the royalties are they to keep? It is assumed they will get 100 per cent, but how much of that 100 per cent will be deducted from the federal annual operating grant provided to the territorial government? If it is still a developing economy, I believe a strong argument can be made in the same way as Newfoundland has succeeded in receiving 100 per cent and not being deducted.
Senator Peterson: I agree with you entirely. I think that is your challenge.
What are the two major challenges you face today in achieving economic success that we could help you with?
Mr. Campbell: That is actually a difficult question to answer because there are four different aspects and they must be developed together. The Government of Canada must make sufficient financial capital available to develop Nunavut just as, say, the Canadian Pacific Railway was developed. The Prairies did not raise the money to build the CPR across the Prairies; it was built on a different basis. The same things have to happen with Nunavut's development.
The big thing is infrastructure. That is really important, as is human capacity development. Without the people with the knowledge and skills to take advantage of it, simply building infrastructure by itself will not turn the economy around in terms of local benefits.
Senator Peterson: I agree, but I think you should be prepared and fight hard for your rights. They will trample you if you do not. This is your chance moving in now on the resources. That is where the monies are. With the government to assist you, I think this is where you have to draw the battle lines, so to speak. I wish you well.
Senator Dyck: You were saying that the Nunavut Land Claims Agreement was the largest land claims settlement made in Canada. You also indicated that the process of resolving land claims was slow. You probably did not use the words ``never ending,'' but words to that effect.
In terms of your land agreement then, do you think that the outcome has been what was anticipated? Are there still things that need to be settled? Has the average citizen received any benefit so far?
Mr. Campbell: That is another difficult question.
Much that was done under the land claim agreement was done right. Some aspects of it are a bit amazing. That the government would agree to divide the territories and set up another territorial government is a major accomplishment. A capital transfer was provided for the compensation.
Those sorts of things have been done well but underlying that is the fact that Nunavut is an underdeveloped economy. In many respects, comparisons can be drawn to the Canadian economy in the 1950s. To get from there to harmonize with the rest of Canada is an enormous challenge.
It is not only the Nunavut Land Claims Agreement that has had difficulties. I think all the members of the Aboriginal land claims coalition would agree there have been big problems implementing land claims agreements. For that reason, the coalition was seeking a federal policy on land claims implementation. When a land claim agreement is signed, it has many chapters and many different government departments and there is no policy.
The Auditor General has also spoken about this to some extent. We tend to find objectives of sections in the land claim agreement. Officials lacking a centralized political direction have taken up the sections and read them like black letter law, let us say, and have given minimal interpretations of what government's obligations are. That has often had the effect of minimizing attempts to meet the objectives of the land claim agreement.
For example, we have read in briefing notes from Indian and Northern Affairs Canada that NTI has never actually proven there is any case in which the government has broken Article 24 regarding federal government contracting. We do not follow every single government contract to be able to keep tabs on that. We are not set up to operate that way. However, the objectives of Article 24 are increased Inuit firm participation in the Nunavut economy and participation of Inuit in the Nunavut workforce at a representative level. Are those objectives being met? They are being met very slowly and, in some respects, very fleetingly. With exceptions like the Department of National Defence agreement for DEW Line cleanup, they are not being met very well at all.
Senator Dyck: I believe Mr. Hickes said something about using a southern model for development, which does not necessarily fit because you have a small population compared to the actual land mass that you have — a small population that is isolated and spread out without adequate means of transportation between communities.
Given the situation of the territory, what would be the most effective way to achieve economic viability? What are the best opportunities?
Mr. Campbell: I assume you are asking which sectors are available for this.
Senator Dyck: I am asking about tourism versus land-based activities, maintenance of traditional lifestyles, and so on.
Mr. Campbell: There are many areas and they all have potential. Expectations are that the mining industry will develop and bring benefits. In the past, in the history of mining in the North, often the outside company came in, took the material out of the land and left with all the benefits, and there was little return to the local population. Through things like impact benefit agreements and, hopefully, devolution of natural resources to the Nunavut government, that situation can be changed, genuine progress can be made and local and regional benefits gathered from mineral development. That is one aspect.
There is good commercial fishing potential. One disagreement there is how much of the offshore fish allocation should be given to Nunavut interests as opposed to other Canadian interests. That is a very politically charged issue in other parts of Canada. It is Nunavut's and NTI's position that Nunavut should get the same adjacent share of the fish stocks as other jurisdictions get.
Arts and crafts are often an almost hidden part of the economy, but they are very important and have a lot of potential. A recent study shows that Cape Dorset has the highest percentage of producing artists of any community in Canada, including some of the gulf islands in British Columbia, which are heavily artistic. A lot is done there in arts and crafts. There are some important skills that need to be built on.
One area that shows a lot of potential is the film industry. Outside films are being shot in Nunavut but, as well, there is Isuma Productions, which is run in Igloolik, and Atanarjuat, a film that won an award at the Cannes Film Festival. A more recent movie is The Journals of Knud Rasmussen. These films show a great deal of artistic quality while at the same time incorporating Inuit culture and history. Those are major employers when they are shooting. When the sales go well, they do very well for the Nunavut economy.
I am not sure if that answers your question, but those are some examples.
Mr. Hickes: With regard to tourism, I was alluding to tailoring programming delivery for the uniqueness of Nunavut. The Canadian Tourism Commission provides some assistance to tourism, but there are some problems when you try to get access to that programming. They have stated on a few occasions that they are not really concerned with emerging or developing areas. They focus more on developed areas where you can get matching dollars, 25 per cent to 50 per cent for a project. That is difficult in Nunavut, when you are trying to start a company or a business in a remote location that does not have a financial institution. If programming and delivery are not based on criteria specific to Nunavut, it can hinder progress in getting access to that capital.
The Deputy Chairman: You indicated that the government is very involved in the economy, responsible for approximately 60 per cent of the spending for contracting and investment. What would you say is the major challenge in trying to attract private investment into Nunavut?
Mr. Campbell: The private sector invests where it can get a return for its money. That is difficult in an economy like Nunavut's, which is far from the markets and very expensive to begin operations in. It generally tends to be capital- intensive things like mining, for example, and some infrastructure development and very specialized types of activities. A great deal must be done by government simply because of those difficulties.
There are now about 300 Inuit firms registered by NTI as Inuit firms under the land claim agreement. That means that the firm at least 51 per cent Inuit-owned. That number has gone up from about 70 firms since 1994. Development is happening in the private sector.
I would also give you the example of Nunasi Corporation, which is owned by beneficiaries in Nunavut and which has gone into joint ventures with the Inuvialuit. It operates airlines such as Canadian North and Northern Transportation Company Limited and has other joint business ventures.
I am not sure whether that really answers your question. From a certain point of view, one thing needed in Nunavut is financial institutions. There are bank branches only in the three major communities: Iqaluit, Rankin Inlet and Cambridge Bay. It is simply not commercially profitable for the banks to open branches in other communities. That is a deterrent for both personal savings and business operations.
Nunavut Trust has provided through NTI approximately $50 million to an Inuit loan company, Atuqtuarvik Corporation, which lends to Inuit firms. I believe Atuqtuarvik is negotiating with the private sector to see if they can join in some way with one of the financial institutions in Southern Canada, whether it be a credit union or a bank, to operate perhaps some subsidiary financial institution in Nunavut on a wider basis than exists at present.
I do not think there is a simple answer to your question. In each case, different factors are involved, and they involve different decisions.
Senator Hubley: You mentioned the Baffin Fisheries Coalition. They received a quota for turbot in 0A district. You mentioned that two vessels fished that. Do you know whether those vessels are owned by the Inuit?
Mr. Campbell: They are jointly owned. They are 51 per cent owned by Inuit in Nunavut and the other by Greenland.
Senator Hubley: Where would that turbot be processed?
Mr. Campbell: I am not a fisheries expert, but one of the difficulties with a lack of port facilities means that it is hard to load and unload. There is a fish plant in Pangnirtung, but a great deal of the processing happens outside of Nunavut.
Senator Hubley: When you receive a quota, does that give you any better opportunity to go after the infrastructure to process that resource within the adjacent area?
Mr. Campbell: Yes, because the capital from the quota can be accumulated and invested. That is how the part ownership of the vessels occurred. Getting some of the infrastructure built is a matter of political process, but you have to be able to demonstrate that you can use it.
Senator Peterson: Who is the approving authority for resource development in Nunavut? I ask that because I wonder if there are there any opportunities for you to do joint ventures with these mining companies. As you are probably aware, most Eastern European countries with mineral deposits are now insisting upon being a partner with the developing company.
Mr. Campbell: Yes. If it is on Crown lands, INAC issues the permits. I may be wrong, but I do not know of any joint ventures in Nunavut. Basically, we have the impact benefit agreements.
Mr. Hickes: There are joint exploration ventures possibly, but I do not know of any others.
Senator Peterson: I suggest you should look into that. You have the minerals. You have to share in that. If you do not take advantage of that now, then when the minerals are gone, they are gone. Now you have something to bring to the table.
Mr. Campbell: I agree with that in principle. However, there may be a large capital requirement, and whether that is the best investment of the available capital is another question.
Senator Peterson: You do not necessarily have to bring cash to the table. You negotiate these deals. You bring something to the table and they provide the money if they want the minerals. It is something you should look into.
The Deputy Chairman: Thank you for your presentation. The information you have provided will assist us in preparing our report. You have provided information on a very remote region of our country that has unique problems.
Our next witnesses are representatives of the Grand Council of the Crees in Northern Quebec, Jack Blacksmith and Matthew Coon Come.
Jack Blacksmith, President, Cree Regional Economic Enterprises Co. (CREECO) and Chairman of the Board of Compensation, Grand Council of the Crees: Good morning. It is an honour for me to be here again. I made a presentation to a Senate committee regarding forestry some three years ago.
I am here to give you a presentation on Cree experiences with respect to economic development. The Grand Chief of the Grand Council of the Crees sends his greetings to you on behalf of himself and the Cree nation.
I would like to commend you on this work on economic development. It can be of great benefit to the Aboriginal peoples of Canada. The government of our territory struggles with economic development also.
I will share the experiences of the Crees in Northern Quebec in terms of our challenges and successes. The Cree nation has been engaged in a number of regional economic and business development initiatives over the last 31 years, since the signing of Canada's first modern-day agreement with the Aboriginal people. This is not to say that the entire Cree nation has been in business for only 31years. On the contrary, local businesses at the community level have been engaged in business for a longer time. Senator Gill would know some of the businesses I will name. They include Charlie Brien's Restaurant of Mistissini, wholly owned by an individual from that community; Allan Cooper Construction of Waswanipi; Sandy Corner Store in Whapmagoostui; and Blackned Construction in Waskaganish, to name only a few. While some experiences have been very successful in many ways, all the activities we have been engaged in have given us a greater appreciation of the type of opportunities and economy we wish to build for the future of the Cree nation.
I currently serve as chairman of the Cree Regional Authority Board of Compensation and president of the Cree Regional Economic Enterprises Company, better known as CREECO. It is the holding company for the Cree nation companies, such as Air Creebec, Cree Construction and Development Company Ltd., Gestion ADC (Alimentation Domco Cree), and Valpiro.
One of our regional success stories has been the establishment of our own airline. Air Creebec Inc., which is 24 years old, started as a partnership with one plane, no less than a Twin Otter. It has become independent with a fleet of 14 aircraft with operating services in Ontario and Quebec.
How did we get to where we are? We kept on expanding by getting new business, such as focusing on industries within our region. For instance, in order for us to enter into the mining sector, there was a high cost and risk associated with changing our capacity and aircraft. The risk was higher than it was for other, non-Aboriginal companies. There are government programs that give support to Canadian companies seeking to expand theirs operations beyond their borders, like Bombardier, which seeks international markets, but it is difficult to find financing for an Aboriginal airline in the North competing for contracts throughout their region.
Further, Air Creebec faced other obstacles such as huge expenses in ensuring that its equipment is as modern as possible. In order to remain competitive in the travel industry, the ability to provide services for reservations is important. Technology and innovation are investments in our operations each year to ensure quality service for our clientele.
While Air Creebec is a 100 per cent Aboriginal-owned company, it has been difficult to attract Cree workers. As our operations are located in a larger airport, in this case Val d'Or, in order to work for Air Creebec, Cree employees would have to relocate to that community. Because of taxation, the work is located outside of the communities and the Crees are subject to taxation once leaving the reservations. The Crees want to remain in their communities, and to relocate the company into a Cree community would incur substantial costs. Hence, in the maintenance department of Air Creebec, there is only one Cree out of 41 workers.
As I said, the airline has had success, and one of the key reasons that we had success in this economic activity has been the support of our leadership. In the creation of opportunities through the new relationship agreement, we were able to expand our operations. Another key to our success has been our company staff's ability to give all the Cree board members precise information in a timely manner to make the best decisions possible.
A lesson we have learned from past experience is that sometimes it is not necessarily a capacity-building exercise to create an Aboriginal business to replace an existing non-Aboriginal business. In the case of our experiences with the food service industry, we entered the market only to realize that barriers were already present. We simply could not provide the same level of services as non-Cree businesses in the region, as some distribution contracts for popular products were already set for the region. We ended up paying higher prices for the same products than our competitors who had already established agreements with suppliers in the region. I guess a key lesson is that business is business, and local communities may support Cree businesses only if they offer competitive prices and the selection of goods or services people are used to.
The Cree Construction and Development Company, CCDC, is another company that is under CREECO. That company, which turns 30 years old this year, is a good example of how we have learned to build capacity effectively within our own organizations. When seeking opportunities in our region, CCDC usually competes with other contractors for a number of contracts in the construction industry. Those contractors are smaller companies and do not have as much overhead as CCDC does. If it is a development activity in which we would like to build our internal capacity, we search out a company specializing in the field and pursue partnership arrangements. Many times the partnerships last beyond the length of the project, and these partnerships have allowed Cree companies to seek contracts beyond the eastern James Bay territory — beyond our own territory.
I would also like to mention the fact that the Cree nation companies have seen success and relatively good situations in the last probably five to 10 years. Building capacity is still very much something that our companies are looking at in terms of trying to provide opportunities to our nation. We have started a series of training and education programs to focus on activities and opportunities within our region. In order to participate more in the economic development activities, we need to create a skilled Cree labour force. Often, the courses or training programs are designed by the Cree School Board, Cree Human Resources Development and our businesses so that they can be tailored to meet actual needs in the industry.
We really appreciate and are focused on the recently constructed regional vocational centre in Waswanipi, which will assist the Cree nation to acquire the necessary skills to participate in business. As we understand, the vocational centre will give courses on the actual needs of the companies within the territory, which will help us in terms of offering employment to our Cree people.
With our experiences, our partnerships and our joint ventures, we feel capacity-building needs to be recognized as a cornerstone of Aboriginal economic development. Capacity building is a huge monster in terms of infrastructure, funding, training programs and so on.
As for advice or recommendations we would give to this committee or to other Aboriginal nations, based on our experiences we would say look towards industries that will build capacity within in your nation. Pursue opportunities that will allow your businesses to expand. Know the industry well that you wish to participate in, so as not to meet barriers such as existing arrangements in the region that may put you at a competitive disadvantage. While you may meet challenges along the way, success comes with the ability to seek out solutions. In some cases, this will mean seeking out partners who can help you build the capacity you need. Aboriginal partners who have achieved successes in the areas in which you are looking to build capacity can offer much in terms of understanding the challenges and opportunities you face.
As you all know, in the Cree nation we look at small business also. Small businesses still have a lot of difficulty acquiring the necessary skills and funding to start out at the local level. Banks will not go into the reservations to offer loans for small businesses. We have great difficulties in setting up our small businesses. The regional businesses are doing fairly well, but the local businesses are not doing as well. The local business is where we need to concentrate in terms of economic development.
At present, our economy is based on service-oriented organizations, Cree School Board, the local government, the health board and so on. They do maybe 70 per cent of the economy. They provide 70 per cent of the work for the work force in the Cree communities, whereas small business provides about 25 per cent to 30 per cent. In Quebec and also across this country, it is the reverse. That is one of the biggest challenges we face as a nation in trying to establish local Cree business and make it grow, to give people in the community the opportunity to start up local businesses.
With that, I thank the Standing Senate Committee on Aboriginal Peoples for its important work in the area of economic development and thank you for inviting the Grand Council of the Crees to testify today. We look forward to the report and recommendations that will come out of your study and commend you on your dedication to Aboriginal issues.
Senator Peterson: I was interested in the agreement you had, the new relationship between the Government of Quebec and the Cree Nation. There are a number of points there. Has that evolved as you anticipated? Are you satisfied?
Mr. Blacksmith: I cannot speak to the whole agreement, but I can speak about the sector I was appointed to develop in that agreement. That is chapter 3, regarding the mining sector. I was appointed president of the Cree Mineral Exploration Board about a year and a half after the signing of the agreement. The board was created through that agreement. There are four Cree representatives and a Quebec representative on the board. We are funded by our own government and we also receive partial funding from the Quebec government.
We have done leaps and bounds with respect to going into the mining sector, although not so not much in development right now; rather, we are at the grassroots level of participating in the exploration work. We provide funding to our people, funding joint ventures between our people and non-Aboriginal companies for grassroots exploration work.
We also provide some funding to various Cree communities that are currently negotiating with other companies that are starting up mining projects in their territory. For example, a community called Wemindji way up in Northern Quebec is negotiating to establish a mine. They will be constructing a road and an airstrip. Our company, CCDC, is in a joint venture with Wemindji to offer those services to that mining company. We are also helping with the actual building of the mine. With just that sector, it has done a lot for that agreement we signed back in February 2002. It has gone a long way for us in the mining sector.
Senator Peterson: Does this agreement take INAC out of the picture?
Mr. Blacksmith: Not necessarily. We signed that Paix des Braves agreement government to government, and it does not take anybody out of their responsibilities, including the federal government. That agreement is strictly between the Government of Quebec and the Cree nation.
Senator Peterson: I understand there is a new hydroelectric project in the planning stages. How is that going?
Mr. Blacksmith: These questions are getting very political for me. I am actually a businessman, so you are putting me in a tight spot here. I will answer you as a person that has been reading the media along the way.
Last week, I was at a conference in Montreal to prepare for the next stage of the project. The conference was put on by SEBJ, the Société d'énergie de la Baie James, and Hydro-Québec. At that time, there was an announcement made that the project, EM1A, and the diversion of the Rupert River had got the okay from the provincial government. There is still the issue of the federal government; there is no response on that yet. They are thinking they may be getting that response a few months down the road. It is not a go project yet, not an official project yet.
Matthew Coon Come, member of the board, Grand Council of the Crees: A challenge for the Cree after the signing of the James Bay and Northern Quebec Agreement was to make sure that the Cree participated in the activities — mining, forestry or whatever — that happened within the Cree territory. In the agreement that was signed, at least for the signatories of the agreement, the idea was that it would help us to participate in economic, social and cultural development, environmental protection and self-government. We expected that the government, whether federal or provincial, would live up to their obligations.
The Paix des Braves is the result of a court case that took the Government of Quebec to task regarding their unfulfilled obligations under the agreement. The intent of that agreement was to ensure that there was an economic infrastructure within the territory. At that time, we had limited roads, airstrips, telecommunications systems, et cetera, which are essential to the development and promotion of and participation in economic opportunities. We certainly wanted to be on the same playing field, in which we would have a good relationship with the proponents within the area. We wanted to find ways to coexist and have meaningful participation and a good relationship. I was Grand Chief then, up to 1999 — I think I was there for 12 years as Grand Chief. It was during the stage when we were negotiating the Paix des Braves, and then Grand Chief Ted Moses completed that.
We were looking for partnerships, because that is what the agreement talked about.
I would like to give you an example of a success story. There was a federal program called the territorial program, which assisted the Cree in developing partnerships with industry, including mining, forestry, et cetera. We had 600 Cree under that program. Presently, that program is being discontinued. It is unfortunate that a successful program that provided training and therefore gave an opportunity to the Cree to participate in the wage economy is being terminated.
Consequently, those 600 people will be unemployed. Therefore, we will go back to step one, where there is no training. Every company in the territory wants the Cree to participate, but they do not have the funding to train people. That was a good program. If this committee could challenge the Minister of Indian Affairs and Northern Development in regard to termination of this territorial program, that would greatly assist us.
The other issue is balance. The challenge for the Cree was to create a balance between the social and the economic. The Paix des Braves was to deal with the economic infrastructure of the communities.
Mr. Blacksmith was talking about development at the regional level; but at the local level, development is still a challenge, whether for male or female entrepreneurs. If you are trying to start a business and you do not have water and sewage lines — let alone your lagoon is already up to its max — you cannot promote those opportunities. We all know in Canada that the largest employers are the small mom and pop businesses. They are the largest employers and that is a fact. That is where I think we need great assistance.
The new relationship agreement is evolving. It takes time. Unfortunately, 30 years later — and I was there when the ink was dry — once the governments and the proponents got what they wanted, we were left struggling to find out what the hell happened here. Unfortunately we had to take some action. The federal government also has legal obligations, which we hope to resolve and be able to move forward, so that the responsibilities are now given to our people who will be empowered to make decisions and move forward.
Senator Dyck: You have highlighted the need for funding sources for the development of small local businesses. What would you recommend? Should a body be created? How would local people apply for that kind of funding?
Mr. Blacksmith: It is difficult for local businesses to access expertise and funding to start up their business. In the last few years, as Mr. Coon Come said, a federal program that allowed us to participate has been clawed back. The same is happening to opportunities for small business. There were federal government programs for assistance and for funding but those programs are next to nil right now or they are hard to access. Even within our bigger communities — we have communities of almost 4,000 people — it is difficult to start up businesses. Many businesses struggle to get the proper funding through the banks. The banks are not very open to us because they will not get into any sort of business until they are fully covered in terms of the money that they loan. It is difficult for the businessman to find all the guarantees to cover himself for what the bank needs in order to release that money. It is very hard for local businesses. The federal government must come into play through INAC or other programs to put up assistance that could be provided for local businessmen.
Mr. Coon Come: One of the challenges for local entrepreneurs assisting small businesses is that you must have training and capital. We have made several presentations to the Cree-Naskapi Commission recommending some amendments with regard to the land and also the way decisions are required to be able to allocate the land to get the lease for the local entrepreneurs. Those should be looked at.
There is also the question of subsidies. One must look at conditions in the North. There are northern costs that must be taken into consideration. Subsidies for the local entrepreneurs' staff would go a long way. At the same time, you must look at the sectoral approach. Right now funds may be allocated, but you need to be able to target groups, such as youth or women. I am not saying that projects are targeted for women only but you should develop a program to target women entrepreneurs. You need to develop a program centred on that.
Any administrator at the local level trying to secure funds faces the difficulty of the administrative bureaucracy of the government. We have to go to Industry Canada, Environment Canada, Human Resources and Social Development Canada, and by the time we get off the Hill we are dizzy and our heads are spinning. It would be easier to have a Wal-Mart type of operation. You go in and everything you need is there. A more centralized access point would make it easier for people to access programs and services.
Senator Dyck: It is interesting that you mentioned targeting women, for example, because across Canada in general, most small businesses are started up by women — at least, a high percentage of them are. There is also a high success rate there as well. Internationally, it has become clear that micro-credit is what people are talking about for Third World countries; that is, usually one individual operating her or his own business is the key to starting down the road to economic independence. Similarly, the local person would not be able to get a loan from the traditional banking system. One has to provide capital in a completely different sort of way.
Mr. Blacksmith: In my community in particular, women and youth are involved in the various business situations that arise in the community. For example, the cafeteria is owned by a 35-year-old woman. She has been in business for about five years and is doing very well. There is another lady who is probably 30 years old and is looking at building a motel in our community. She is seeking some sort of financial assistance to be able to construct that hotel. There are young people involved in the various sectors, such as the Internet. They offer all sorts of programs to the local school. The guy is probably about 35 years old, too. Many young people are involved in the local businesses but they are not getting enough assistance to get over that threshold to have a really outstanding business and to have those opportunities extended to them.
Senator Lovelace Nicholas: My question is on hunting, fishing and trapping. Is that still a viable source of income for your communities?
Mr. Blacksmith: Our fur industry has been destroyed. It is hard for us, although to a certain extent many elderly people and some young people still practice the traditional way life, but it is not relied on 100 per cent as in previous years. It is more like keeping their way of life in terms of fishing, hunting and providing for your sustenance needs.
Senator Lovelace Nicholas: Could a young person with a small family survive on that way of life?
Mr. Blacksmith: I do not think he could rely on it 100 per cent any more to provide for his family. I think he could provide a good living but he cannot do it 100 per cent because there is no real hard revenue from hunting and fishing. However, there are programs to assist him and he could make a partial living with that assistance.
Mr. Coon Come: The James Bay and Northern Quebec Agreement was to help trappers continue with the trapping and hunting way of life. The Cree Hunters and Trappers Income Security Board has supplementary assistance for trappers. In its annual report, that board has shown that 37 per cent of the population is on that program.
The difficulty we face occurs when there are clear-cutting operations with the trees being cut under a heavily mechanized system. Mining activities are starting to spring up and lands are being flooded. The small and big game are being driven away from the land. When you have no small and big game, you drive people off the land.
The challenge is to be able to work with the industry. Mr. Blacksmith is very familiar with the forestry operators. You can protect certain areas to guarantee moose yards or spawning grounds, for example. It is a matter of working together with the industry to be able to ensure that that way of life continues. The problem has always been enforcing those regulations to the industry. It is good to have a forestry regulation that says you cannot cut 100 metres around a certain lake because there is a great beaver habitat, but do you think the forestry company or the federal government will hire someone to measure and ensure that the cutters are outside the 100 metres and then fine them if they are not? That is one of the challenges if you want to protect that way of life. Certainly, we want to allow that and that was the intent of the agreement. With that agreement, the land was still the largest employer and we wanted to give people the choice to continue that way of life if they chose to do so. The intent was to have a relationship with industry that would ensure compatibility with that way of life. Our challenge now is that development is encroaching on that way of life.
Senator Peterson: Have you had any success accessing resource revenue sharing, the funds of which could go into an economic development fund for the small businesses that you are talking about?
Mr. Blacksmith: As I alluded to earlier, in the mining sector and in the forestry sector there have been negotiations between certain Cree communities and certain mining companies for economic preferential treatment in terms of contracts that might be available from projects. As for cash for small business, I do not think that has been negotiated. For example, the community of Témiscaming has had a mine operating in their territory for approximately 10 years. They have had an agreement with the mining company since day one that they would be considered first for any employment opportunities available with that project. The agreement states how many Cree they will hire. If they do not hire a certain number of Cree, something will kick in, but I do not know those details because I have not read the agreement. Similar considerations apply in the situation I referred to earlier of the community of Wemindji. They are talking about a partner company that can assist in the construction of the mine and its infrastructure. It is not so much a cash exchange but rather employment opportunities.
Senator Peterson: What about Hydro-Québec?
Mr. Blacksmith: That is a different story. I would ask Mr. Coon Come to answer that because I am a businessman, not a politician.
Mr. Coon Come: For the record, I do not think the Crees were ever anti-development and I do not think any First Nation community is anti-development, whether we are talking about hydro-electric development, forestry, mining, the tar sands or the pipe lines. The Aboriginal people are talking about having a share in the wealth of this country. I am talking about revenue sharing and having a say in the way that development takes place to try to create a level playing field with leverage to seek those opportunities and receive preferential contracts when it is in your own backyard. We want to have a say in the way development takes place and we want to ensure that those contracts are secured.
Hydro-Québec is a provincial Crown corporation and the proponent is the provincial government that wants to proceed with certain projects within that area. One of our challenges is to find a way to ensure that we have a meaningful say in how development takes place and we have preferential contracts for negotiation. Mr. Blacksmith was referring to that when he mentioned the last conference where Hydro-Québec made a presentation.
You try to build relationships and come in with a mind open to coexisting within the demographics. We are no different from any other Aboriginal group. About 60 per cent of our youth are under the age of 25 years and we would like to create job opportunities for them. If we could sit down with the developers and the proponents within our area, we would like to come up with a deal that we feel is good for our people, for the government and for the proponent.
Senator Peterson: As of today, you are not receiving any share of the hydro generation revenue; is that correct?
Mr. Coon Come: When the agreement was signed, we wanted to have revenue sharing. Do not ask me to explain the mathematical calculation but it was done in terms of the extractions in mining and forestry as well as in terms of the sale of the electricity. That was how certain figures were arrived at for allocations to the Cree as a way of revenue sharing. There was an understanding that if there were new projects, whether in forestry, mining or hydro-electric development, a new agreement could be negotiated for additions to the existing agreements. These would be based on court decisions that favoured Aboriginal people and on creative and innovative thinking, hopefully not bound by policies of yesterday. We look forward to participating in the economy, at least within our James Bay Cree territory.
Senator Hubley: Mr. Blacksmith, I would like to go back to smaller businesses for a moment. Your statement that business is business is absolutely correct. No business will succeed unless it is the best that it can be. In creating a skilled workforce, how important is the regional vocational centre? Could you give us a description of that vocational centre? Have you ever had an opportunity for industries to contribute to the training at the vocational centre?
Mr. Blacksmith: When that centre was first discussed a long time ago, it was on the principle that the institution would not focus on established courses. Rather, it was to provide direct training to help the Cree nation to meet the needs of some of the established businesses.
I think the Cree School Board must be congratulated on that. They realized that in order for people to access good employment, they must develop those skills. They offer the training program based on that.
For instance, our airline has been bothering the Cree School Board for probably the last 10 years to start a program for training pilots. It is a very expensive endeavour, but we have almost succeeded. Do not quote me, but most likely by May of next year we will have an initial course for Cree pilots to complete that training. That is a very positive development.
In the last year, CREECO had about 1,500 jobs we could offer to our people. Maybe more than half of those positions we could not fill with our people because they did not have the proper skills to perform the jobs. That sets us back. It also paints a negative picture at the local level because we are a Cree company that cannot hire Cree people. It is not because we do not want to. It is because the regulations put in place for us at construction sites do not allow us to direct our employees to drive this or that machine as a result of the whole process of acquiring permits, whatever the case may be, in order to work at that construction site.
We are working towards achieving these goals. The proponent, SEBJ, is helping our people by working with us at the construction site to be able to open up to them.
We are also looking at language. Language training is very important, especially in the delicate situation of a construction area. Communication is of utmost importance to avoid the accidents that could happen at any construction site.
Most of our older people speak only English and Cree. Our younger generation are very much trilingual; they speak French, English and Cree. Language is an area we must also develop.
The Deputy Chairman: Mr. Blacksmith, I note that you mentioned you are a businessman, yet on a couple of occasions you handed the hot topics of politics over to Mr. Coon Come. When did you discover that business and politics must be different? What has your experience been in that regard?
Mr. Blacksmith: I was a very young man. I used to work in the Waswanapi community. I was the band manager, if you will. At that time, we were struggling with economic development. I am talking about 30 or 35 years ago. We used to talk about how we would tackle economic development.
At the end of the day, the situation was always that the government did not interfere but the policies they established put up a wall for local business people who were trying to establish themselves. It was not done intentionally. It was done because the local government did not have the necessary funds and land to develop in order to provide the infrastructure needed for the local businessmen.
Whenever a business started, the businessman would be told that the infrastructure costs would be $50,000. That is not including the building. That is just clearing the land to provide water and sewage services to the business and so on. As a result, the businessman would walk away almost every time. When we look at that situation, we tell ourselves that business and politics must be separate.
We have always said that government must offer the infrastructure to be put in place for the businessman to become involved in the community, but that is the extent of their involvement. We have always talked about interference, if you will, in terms of the local government and the possible business ventures started in the community. Again, that is not the fault of the government. That is the fault of the different guarantees, if you will, that are required of that individual who wants to get into business.
If you go to the bank, the bank will not look at you until you have a band council resolution and until the local government co-signs your loan. If you try to tell the bank that the government and the business is here, it is the same result; the bank looks at the whole community. It is very hard for the businessman to get away from that.
Also, when we talk about business as separate from the government, at the local level, the communities are small. They are not large communities. A population of 4,500 is still a small community. Practically everyone knows everyone else. The businesses that want to start up in that type of community are always interrelated with the government.
We try very hard at our level to sever those ties or to at least say that business is one thing and government is another. However, with the situations placed onto these local businesses, it is very hard to accomplish that. We still try to find that line of difference.
The Deputy Chairman: What about the matter of Aboriginal people becoming business people? It is quite a change in mindset. Historically, our ancestors were hunters and trappers who worked for other people. At some stage, there has been a changeover to becoming business people. I consider it to be a significant phenomenon because it is quite a switch to live off the land and then suddenly become people who operate in boardrooms. The switch from being a hunter and trapper to becoming a businessman is quite a change. Do you want to comment on that?
Mr. Blacksmith: It is quite a change. If I recall correctly, there was a speech given by a man named Charlie Brien — he is no longer with us, God bless his soul — who was from the community of Mistissini. When he started his business, he literally had a little shack where he would sell coffee, hot dogs, hamburgers and pop. He graduated from there. Many years after that, we had an economic development conference in Val D'or and he was asked to speak. In his speech he stated, ``I have been a businessman all of my life.'' We thought he was maybe 25 or 30 years old when he first started his restaurant. He said, ``No, I have been a businessman ever since I was in the bush with my grandfather and my dad. We had hunting, fishing, trapping and furs. We had to go around and negotiate the price of furs and so on.'' The mindset for business has existed for certain people. I think it has always existed within the Cree people in some fashion or another.
It is the same with Mr. Cooper from Waswanapi who started his operations when forestry first came to the Cree territory in the mid 1960s. To date, he is still very much active in that industry.
There has definitely been a dramatic change for our people. I grew up in a shack as well until I was probably almost 17 or 18 years old. That is when we first had a washroom in the house. I grew up in a tarpaper shack. My father was very much in a business situation as well. He used to hunt, fish and trap, and that is how we made our living. He would seek work and hire people on for exploration work that was being completed at the time. That is how we survived. Cree people have always had that business intuition.
The Deputy Chairman: I understand that representatives of the Grand Council of the Crees have been to other parts of the country to give advice and perhaps inspiration to other First Nations people. Would you like to comment briefly on that?
Mr. Blacksmith: On behalf of the companies that operate under CREECO, we have provided some information and advice. We are even talking about the possibility of joint ventures and partnerships with other nations across the country. More notably, we recently spoke to a particular First Nation about the airline business. They want some assistance and advice and we are presently working with them. We are talking about joint ventures with First Nations in the pipeline, hydro and the mining industry across the country.
We have already established some partnerships, namely in Ontario. You know of Victor Diamond Mine, the lone diamond mine in Ontario. We have had a strong working relationship with the Attawapiskat people on that for almost a year. We are looking at many other venues to expand that partnership. It has been working very well for us.
The Deputy Chairman: I wish to thank you very much for your time and presence here. The information you presented will assist us greatly in writing our report.
We are winding up our study on economic development as it relates to Aboriginal people. We hope that our report will be of interest and assistance to all Aboriginal people in the country as well as to government.
The committee adjourned.