Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 10 - Evidence - November 18, 2010
OTTAWA, Thursday, November 18, 2010
The Standing Senate Committee on Agriculture and Forestry met this day at
8:10 a.m. to study the current state and future of Canada's forest sector.
Senator Fernand Robichaud (Deputy Chair) in the chair.
The Deputy Chair: I see we have quorum. I declare the meeting in
Welcome to this meeting of the Standing Senate Committee on Agriculture and
Forestry. I am Senator Robichaud from New Brunswick, Deputy Chair of the
committee. I would like to start by asking the senators to introduce themselves.
Senator Eaton: Good morning, I am Nicky Eaton from Ontario.
Senator Ogilvie: Kelvin Ogilvie, Nova Scotia.
Senator Kochhar: Vim Kochhar from Ontario.
Senator Plett: Don Plett, Manitoba.
Senator Mahovlich: Frank Mahovlich, Ontario.
Senator Mercer: Terry Mercer, Nova Scotia.
The Deputy Chair: The committee is continuing its study on the current
state and future of Canada's forest sector. Today we are focusing on Aboriginal
communities and forestry.
Today we welcome witnesses from two different organizations. First, from the
National Aboriginal Forestry Association, it is a pleasure for us to hear from
Harry Bombay, Executive Director, and from the Council of the Atikamekw Nation,
Simon Awashish, negotiator.
Thank you for accepting our invitation to appear. Before inviting you to make
your presentations, I would like to point out that we have received the
presentations in only one of the official languages. Do I have permission to
distribute them in only one language?
A voice: Yes.
The Deputy Chair: All right, that will be done and they will be
We will start with the presentation of Mr. Simon Awashish. Then we will hear
from Mr. Bombay. Your presentations will be followed by a question period.
I am going to wait until the documents have been distributed, and then we
Simon Awashish, Negotiator, Council of the Opitciwan Atikamekw Nation:
Ladies and gentlemen, senators, thank you for this opportunity to outline our
perception of the future of the forest sector to you.
I am one of the 6,500 members of the Atikamekw Nation, which is divided into
three communities: Manawan, Obedjiwan and Wemotaci. Our ancestral territory
extends over an area of approximately 65,000 square kilometres, located in large
part in the administrative region of Lanaudière and Mauricie, in Quebec.
In the early 1980s, the large-scale intensive harvesting of wood by forest
companies began on our family hunting grounds. For us, that was the start of a
second major disruption in the exclusive use of the resources of our ancestral
territory. The first was the construction, in 1912, of the railway linking the
Montreal metropolitan area to Abitibi- Témiscamingue to permit the development
of the wildlife resource by other users. Before intensive forest operations
began, we had calmly enjoyed our hunting grounds. The opening of our hunting
grounds through the construction of logging roads attracted other users in
Like all those of my generation, I saw the environmental change occur
suddenly in the space of two decades. From virtually intact forest coverage
across the entire ancestral territory, the new environment became a barren
landscape, with a few scattered clumps of softwood trees.
Today I have also witnessed a forest regeneration that has not yet come to
full maturity and which is mainly the result of human intervention based
principally on a silvicultural development strategy to plant jack pine instead
of black spruce.
As leader and chief of my community, I could no longer tolerate having large
forest companies come and harvest our forest resource to the detriment of our
territorial organization and way of life. We had to react to that development.
Out of that reflection came the idea of establishing a wood processing plant in
our community. In the following lines, I will provide you with a brief
description of the sawmill project introduced in the Obedjiwan community.
The Obedjiwan sawmill: Description of the business. The Scierie Opitciwan
limited partnership operates a sawmill in the Atikamekw community of Obedjiwan.
The business is mainly active in the production of lumber. The Scierie Opitciwan
limited partnership was created in the fall of 1999, pursuant to a partnership
agreement between the Atikamekw Council of Obedjiwan and the Donohue company.
Later, that company was acquired by Abitibi- Consolidated of Canada. There has
thus been a change of partners along the way.
The Project's promoters: The Atikamekw Council of Obedjiwan. The Atikamekw
Council of Obedjiwan is the local government responsible for public
administration of the community under the Indian Act. The community located in
Haut-Saint-Maurice, an administrative region of Quebec, more specifically on the
north Shore of the Gouin Reservoir, source of the Saint-Maurice River. That
river flows into the St. Lawrence River, flowing over a distance of 400
kilometers through the heart of our traditional territory. The City of
Trois-Rivières is located at its mouth.
The community's economic development is based mainly on the development of
natural resources, particularly wood. Abitibi-Consolidated of Canada is a world
leader is the newsprint and value-added papers sectors and one of the principal
manufacturers of wood products. It operates a number of plants in the
The Partnership: The ownership interests in the project for each of the
parties are as follows: the Atikamekw Council of Obedjiwan, 55 per cent, and
Abitibi-Consolidated, 45 per cent. The strength of this association stems from
the complementary nature of the two partners' areas of competence. The Obedjiwan
Atikamekw population has knowledge of the territory and the necessary labour to
ensure mill production and the logging operation. A large percentage of the
population is in the 15 to 44 age group. Abitibi-Consolidated provides expertise
in milling, forestry and the finished products market.
It should be noted that the partnership is a success for the following
reasons: decisions are made jointly by the two partners; strategic choices have
been made by the partners to grow the business in terms of both profitability
and productivity; mutual respect between the partners is very important.
Structure of the business: The legal structure advocated by the partners is
the Scierie Opitciwan limited partnership. This form of association affords one
major advantage for the Aboriginal partner. As the Atikamekw Council of
Obedjiwan is a band council within the meaning of the Indian Act, its share in
the partnership's operating profits is tax-exempt.
The board consists of seven directors, four of whom represent the Atikamekw
Council of Obedjiwan and three Abitibi- Consolidated.
The board is responsible for strategic business orientations.
Mission of the limited partnership: To operate a softwood sawmill (fir,
spruce and grey pine) oriented toward the production of lumber of various
lengths; to develop and gain recognition for the Atikamekw nation's expertise in
resource development and integrated forest management; and to promote the
economic interests of the Obedjiwan Atimakekw people. The Scierie Opitciwan is
the sole user of the volume of wood granted annually by Quebec's department of
natural resources. The Atikamekw Council of Opitciwan has a forest development
agreement. The Council receives annual royalties on harvested volumes.
Size of the business and number of employees. Direct jobs: The Scierie
Opitciwan currently employs 60 full-time workers, including supervisory and
administrative positions, in addition to some 12 replacement employees. Indirect
jobs: A larger number of indirect jobs are created in order to provide the
services required by the mill.
Forest workers and transport: The wood harvest, construction of logging roads
and transportation of wood from the harvest site to the processing plant
requires 55 or more employees to carry on these activities.
Silvicultural work and inventory: Some 10 employees work on a seasonal basis
to meet the silvicultural obligations of our mill. Five more workers are
employed by the Opitciwan forest services for housing purposes.
Successes and difficulties. Successes: A partnership that works. The partners
have worked to make the project viable over the long term. That was one of the
conditions that we set for our partner, Abitibi-Consolidated. Thus far, the
business has managed to survive the current lumber market crisis. However, that
crisis is not over. The introduction of a curved sawing line in 2008, a
technological advance, helped sharply increase productivity and thus reduce our
Difficulties: A shortage of wood supply is still an annual reoccurrence,
despite efforts made to secure additional wood volumes from the Government of
Quebec to offset those shortages. An alternative solution is currently
available, but it cannot be considered from an economic standpoint because it is
not financially advantageous. This is an economic sector that has been hit hard
by the current economic crisis. Housing starts are at very low levels, which has
resulted in lower prices for products milled in Obedjiwan. The result has been
operating losses since 2006.
The partnership's working capital situation is a problem. As a result of
business losses and a tightening of credit conditions by our financial
institution, we anticipate that we will be short of liquidity in the spring of
2011. Certain provincial programs that provide assistance to forest businesses
are not available since the Atikamekw Council of Obedjiwan is the main partner
in the mill. And yet there is no difference between our operations and those of
our competitors. When we say the Atikamekw Council of Obedjiwan, we mean the
council within the meaning of the Indian Act.
The Obedjiwan community is located on forested land. It must bear the cost to
transport its semi-finished products. Drying and planing are done in
Saint-Félicien, a town located 300 kilometers away in Saguenay-Lac-Saint-Jean.
Many logging companies harvest their wood near Obedjiwan. They often make
strategic choices to limit access to the area for the Scierie Opitciwan. Using
the nearest forest principle would be a solution that should be favoured in
order to resolve our situation. The economic self-sufficiency of the Opitciwan
Atimakekw depends on a guaranteed adequate supply of wood to meet our mill's
In conclusion, our ancestors were able to benefit from the advantages
afforded by the territory's resources by adopting an environmentally friendly
way of life. There is progress in our community. The demands of modern life
require us to turn to other sources of revenue to meet new needs. The
development of wood is a major factor in the community's economic development.
It must be carried out in a manner respectful of our culture and the
environment. This is a legacy from our ancestors which we intend to preserve.
The Deputy Chair: Thank you, Mr. Awashish. Now we will ask Mr. Harry
Bombay to make his presentation.
Harry Bombay, Executive Director, National Aboriginal Forestry
Association: Thank you very much; I appreciate the opportunity to be here.
In my role as the Executive Director of the National Aboriginal Forestry
Association, I have been following the work of this committee and I am looking
forward to the eventual outcomes. I have been here before. I believe I was one
of your early witnesses when this process began.
In your mandated task of looking at the future of the forest sector, I have
looked at some of the presentations made by the various actors in the forest
sector and the experts you have brought before you. You certainly have a
daunting task ahead of you in terms of formulating recommendations to the
Of course, we are here hopeful that the committee will recognize the
importance of forests to Aboriginal people in this country. We think the federal
government has a very significant role to play in supporting Aboriginal peoples
and their values and interests in the Canadian forest sector.
The federal government has a constitutional responsibility for Indians and
lands reserved for Indians under subsection 91(24) of the BNA Act. The duty to
protect Aboriginal treaty rights is constitutionally protected. I am not sure if
you are aware but last Friday the federal government endorsed the United Nations
Declaration on the Rights of Indigenous Peoples. It is a significant move on the
part of the federal government. It should help the committee in terms of
defining how the federal government can support Aboriginal forestry across the
Those various pillars that back up Aboriginal treaty rights in this country
are based on some of the recent developments, both nationally and
internationally, and they clarify to a large extent how the federal government
can work with Aboriginal people in the forest sector.
Laying the foundation for the future forest sector requires that a
cornerstone be Aboriginal participation. It is NAFA's view, which we hope you
will recognize and reflect in your reports, that the reconciliation of
Aboriginal rights and interests within Canadian society will be achieved largely
through the management of natural resources by Aboriginal peoples.
In broad terms, Aboriginal peoples are seeking an enhanced role in natural
resource management, especially on the forested lands within their traditional
territories. As well, they are seeking new approaches to economic development
that promotes forest sustainability, contributes to their social and cultural
well-being and responds to the major environmental issues, such as climate
change and supporting measures, such as forest conservation.
Today I will address the subject of First Nation communities and forestry
with a focus on community and worker participation. I would like to address this
subject under the concept of capacity building. I believe the term ``capacity
building'' is a more comprehensive term and better reflects the needs of
Aboriginal communities. To do this and to give it the proper context, I would
like to remind you of my earlier presentation to the committee, which talked
about the basic pillars of Aboriginal economic development and capacity
Capacity building is one of the key issues in addressing the forestry
interests of Aboriginal people i.e. their rights and values, and enabling their
effective engagement in the forest sector. Aboriginal capacity and natural
resource management is a broad and multifaceted concept involving issues that
encompass governance from the Aboriginal point of view, institutional
arrangements with other levels of government and Aboriginal human resource
development — the necessary worker skills.
I would like to comment on what I consider the three pillars of Aboriginal
capacity building in the forest sector. I will comment on institutional
arrangements with other levels of governments that are key to capacity building.
In the forest sector today, we see quite a bit of discussion about the need for
institutional reform to support the changes in forest management across the
country and to meet the shifting social demands. The most important institutions
influencing forest land management are the provincial forest tenure systems,
which allocate resource rights and responsibilities and prescribe forest
In recent years, several provinces have released reports acknowledging that
their tenure systems are in need of reform, and some have committed action in
this regard. We understand that in British Columbia, Ontario and New Brunswick
active forest tenure change is occurring as we speak, and a new approach to
tenure is being developed.
The major barriers to Aboriginal capacity building in the forest sector can
be found in the forest management regimes of provincial governments. The
industrial tenure systems have failed in the past to recognize the forest
interests of Aboriginal people and have imposed conditions that have served to
exclude Aboriginal people from participation in forestland management and in
forest based development.
I would like to refer you to the report that I will leave with the committee.
It is quite dated but still hits the key issues. It is entitled Accommodation
of Aboriginal Rights: The Need for an Aboriginal Forest Tenure, published by
the Sustainable Forest Management Network. I have referenced to this paper his
in my presentation and it is available to the committee.
Forest tenure systems, to the extent that they enable Aboriginal engagement
in forest land management, will greatly influence the rate at which Aboriginal
communities and organizations develop their capacity in forest and natural
resources management. If we do not have the institutional framework from which
Aboriginal people can work and perform management functions within the forest
sector, then we will not develop the capacity or the appropriate worker skills
to be an effective partner in the forest sector.
Another pillar that I referred to is First Nation governance and forest
management. First Nation interests in forest derive from the long-term
relationship with the land. The lands on which most First Nations communities
are located are forested. Governance is at the heart of First Nations interests
in forest management and finding a balance between traditional knowledge and
values, multiple use and wise utilization of forest resources, and holistic
perspectives on the management of human interactions with the land within
Canadian social, political and economic systems is key to rebuilding First
Nations governance. The aspiration of First Nations leaders to regain a
significant role as stewards of the land is based on the realization that
cultural preservation and future socio-economic well-being are dependent on
maintaining that relationship with the land.
The goal of First Nation governance is self-determination. First Nations
today are in the process of rebuilding their systems of governance, including
social, political and economic institutions. Considering various circumstances,
such as the land base, title and size, population, political culture and
political climate, First Nations governments, in terms of daily use, include
Indian Act bands and nation governments as defined by their traditional
affiliation. Examples of nation approaches by First Nations are the Shuswap
Nation and Chilkowton — groupings of Indian bands that work collectively as a
nation. Some have chosen to go that route.
We also see self-government being advanced through land claim settlements in
I would like to refer the committee to another document, the Royal Commission
on Aboriginal Peoples, Volume 2, which talks about the various models of First
Nations governance. It is important to look at the governance structures of
Aboriginal peoples because it is within those structures that First Nations will
undertake the role of forest management and the capacity must be built.
Authorities for First Nations governments are derived from the inherent
Aboriginal right to self-government, delegated powers form the federal
government, modern-day treaties, land claim settlements and intergovernmental
agreements, often called co-management with other levels of government. More
often than not, First Nation governments exercise authority based on two or more
of those sources. Often, jurisdictional issues are an area of continuing
In terms of First Nation governance today, we have an unrecognized interest
in the land, in particular the forest tenure systems and other aspects of forest
management regimes in provinces and in federal approaches to forestry.
The third pillar is Aboriginal human resource development. Traditionally, the
forest sector offered a wide range of opportunities for labourers, skilled
trades' people, professionals and those interested in natural and applied
sciences or in business, finance, administration and management. I am sure you
have heard much testimony about the various types of profession that are
prevalent in the forest sector. They include forestry professionals, such as
ecologists, researchers, forest technologists and technicians, and machine
operators in the processing plants. On the harvesting side, we have logging and
forestry supervisors and labourers, and silviculture workers.
We have made some advances in the area of capacity development of Aboriginal
people, but we have not reached a comparable skill level to that of the rest of
Canadian society. There is a high need to continue to develop skills in these
Looking forward, Aboriginal communities and their organizations will also
need skills in professional development areas that support the new forest sector
opportunities, such as forest fire material science and biotechnologies. To a
large degree, Aboriginal skill needs in the forest sector will mirror those of
the general population, although the gap is wider because of the lower
educational levels of Aboriginal students, particularly in the sciences.
NAFA estimates that there are approximately 80 Aboriginal professional
foresters in Canada and another 40 Aboriginal people with other natural science
degrees and approximately 300 Aboriginal natural resource technicians. However,
there remains a fundamental need for Aboriginal natural resource managers at
community and regional levels. Although the Aboriginal need is not necessarily
different from the forest sector in general, there is a different land ethic, a
different forest value system, which must be incorporated within Aboriginal
approaches to natural resources management.
I think a fundamental need will be a Bachelor of Science degree and a degree
in natural resources conservation and other degree programs that integrate
social science and ecology with business and economics. The fundamental need of
Aboriginal communities today is to be able to map out both their role within
their regions and how they interplay with other players in the forest sector.
The basic need for planning land use is fundamental to communities today.
I will draw senators to the chart I included in my presentation. In this
chart, we have identified the place of employment of most of the Aboriginal
professional foresters in Canada today. We base this on a scan of the 72 of the
80 Aboriginal professional foresters in terms of where they work. We note from
the chart that 60 per cent of all these professionals work for Aboriginal
organizations; 17 per cent work for federal and provincial governments; 8 per
cent work for NGOs and the non-Aboriginal forest industry; and 15 per cent at
the time were unknown.
Clearly, Aboriginal professionals choose to work for their communities and
for the Aboriginal forest sector. This is a reflection of the growing capacity
but it also highlights the vast shortages of professionals in the forest sector.
Approximately 10 years ago we did a study on labour market needs and estimated
that Aboriginal communities at that time required somewhere between 500 and 600
professional foresters to manage all aspects of their forest interests in their
particular areas. There was a fundamental need then and there is a greater need
now and the need now has become more diversified.
The federal role in supporting Aboriginal forestry is an area, as I mentioned
earlier, in which we hope there will be some recommendations. We think that the
federal government could play a larger role in supporting in all of these three
areas identified, for example, institutional support; that is, the manner in
which, for example, forest tenures are changed in Canada. We must ensure that
sufficient space is created for Aboriginal people. We must see new types of
institutional arrangements like specific Aboriginal forest tenure.
You might know that the B.C. government has instituted something called the
First Nations Forest Woodland Tenure, which is a new form of tenure giving the
Aboriginal peoples in communities the ability to manage areas of land as opposed
to volume-based tenure, where they harvest a certain volume of wood. There are
movements to create areas of management so First Nations can develop their
economies based not only on the traditional forest industry in Canada but also
on looking at innovative ways of using forest resources. These include
value-added and non-timber products, and different types of forest by-products
using their traditional knowledge and their own way of developing and
transforming their concepts to contemporary forest products and services.
We think the federal government could play a large role in supporting that
type of change. Support must come in the form of support to Aboriginal
organizations so that they in turn can work with other levels of government such
as provinces, municipalities, forest companies and research institutes and other
groups in the forest sector.
With respect to governance, in negotiating self-governance agreements and
land treaties, for example, we do not see a sufficient level of focus on forest
management in those agreements. Much of the land that First Nations are
acquiring through these means is forested land and it must be managed both going
into the future and for today's contemporary forest management objectives. We
must see an emphasis on forest management on the various instruments that are
being developed today in terms of Aboriginal governance. In capacity building,
it would be great to see focused training initiatives for Aboriginal people in
areas where we know there will be a shortage of skills in the future. For some
of the types of skills that are needed, we should be looking at ways to get
Aboriginal people into these areas because ultimately their development will be
based on appropriate skills.
In closing, I would like to add one commentary on how we focus our work. I
think it is important to talk about the Aboriginal forest sector as something
that is quite distinct in Canada. It is based on a whole lot of different
circumstances, for example, jurisdictional issues, legal issues, different
values and different development objectives. When we look at putting in place
space for Aboriginal people in the forest sector, we must be conscious of these
differences and we have to develop institutions that are respectful of them.
That must come across and it must be reflected hopefully in your ultimate
Those are my comments today. I would be happy to discuss any of that further
Senator Eaton: Mr. Awashish, in your presentation you talk about the
development of natural resources, particularly wood. For nine months, many
witnesses have told us about biochemical products, value-added wood products and
natural products from the forest such as mushrooms and blueberries. Has there
been any progress in these development areas?
Mr. Awashish: When I talk about natural resource development, I am
obviously referring to traditional practices. The Atikamekw Nation is one of the
three communities that I mentioned and that live from hunting, fishing and
gathering wild fruits. There have not yet been any technological advances in
those fields. These are non-commercial activities that serve more to meet food
and clothing needs.
Senator Eaton: Is it a lack of education? What do you think about
Mr. Awashish: No, it is a matter of development of society. We have
not yet gotten to the point where we can foresee technological advances in those
fields. However, increasing numbers of people are taking an interest in that.
For example, picking wild blueberries is an important activity in our
communities, and when picking time comes, the community disappears and heads to
the traditional territories.
The use of medicinal plants is also very much a part of our communities, but
there has not yet been any industrial development of those plants.
Senator Eaton: You do not do it commercially. You do it for
Mr. Awashish: Yes, indeed. The industrial development of wood is a
reality that affects us.
Earlier I was talking about large-scale operations in our territories and we
saw that that had a major impact. We had to react to that situation in order to
prevent the resource from escaping us. We saw the big trucks go by our
communities heading south. That is why we introduced a sawmill in our
Senator Eaton: I congratulate you. You are in partnership with a big
business. I was wondering whether the business had more technological values,
more advances to help you a little in moving forward too.
Mr. Awashish: When we chose our partner, looked for a partner, five or
six companies were developing the hunting territories around the community. It
used to be Canadian Pacific, CP at the time; today Smurfit-Stone is in the
region. There were Donohue and Kruger. So we wrote to those people to invite
them to join in a partnership. We took the time to analyze those who could work
with us, who agreed with our vision. Donohue had an approach that interested us.
There was a concern for Aboriginal cultural values. We entered into a
partnership with them. Along the way, it was acquired by Abitibi-Consolidated.
The people we worked with at Donohue continued on with us in Abitibi-
Consolidated. At our board meetings, we were able to talk more about our way of
looking at forest development, which has to be based on respect for the culture
and the hunting grounds.
Senator Eaton: Mr. Bombay, you were talking about different values,
and I wonder if our values are so different at the beginning of the 21st
century. With regard to agriculture, as well as forestry, many witnesses have
talked to us about how you have to keep the ecological balance in the woodland,
that you have to preserve animal habitat, and that there are different products,
whether it is taking the waste and making woodchips or taking other materials.
I wonder if we are not now catching up a bit to you and you are not catching
up a bit to us; in other words, we will combine science with ecology. It seems
to be the new way.
Mr. Bombay: I would agree that the kind of extreme positions are
moving more toward the middle in terms of common values. I think the forest
sector has taken a more ecological approach to their work. Much of the work is
now based on forest conservation and high-value forests. For example, forest
certification systems in Canada have helped move some of the companies toward
forest conservation and better protection of ecologically sensitive areas.
Yes, there is some movement; however, I think there is still a significant
difference. As Mr. Awashish pointed out, Aboriginal people use the forests as a
source of food and materials for their own use. Aboriginal communities today
continue to do that to varying degrees, depending on where they are and the
extent to which their traditional territories have been encroached upon by
We still do that, and we still depend on it. We have different values in
terms of how we make decisions on the land base. We have values that differ in
terms of what plants we might want to protect in forest management. Mr. Awashish
indicated he was concerned about the replacement of spruce by pine plantations
in his traditional territory. Those are examples of where it comes down to
forest management where some of these differences lie.
One thing that stands out is that Aboriginal communities, when they think of
forest management, they are less driven by the profit motive; it is more about
preserving some of the traditional and social values.
Senator Eaton: Are you not worried that we will end up creating a
Mr. Bombay: I believe they can work together. Aboriginal people in
Canada are seeking a separate path, to a large degree. They are talking about
coexistence and about being able to integrate, but at certain levels, not
necessarily developing our own management system so that we can manage the
resources in accordance with our values, because we realize that they will
never, or at least for the foreseeable future, be quite the same.
In the interim, we have to look at how we can manage to preserve certain
elements that we feel are important. Yes, there will have to be a separate
system. When we talk about a First Nation forest tenure system in Canada, we are
talking about a system that enables Aboriginal people to put value on
traditional use and on the harvesting of materials for their own needs, and to
practice silviculture with that in mind, for example.
There are various differences. Small scale versus big scale, and a
value-added process rather than commodity production, are examples of some of
the differences. When it plays itself out; Aboriginal people will go more toward
value-added rather than large-scale commodity production. This makes sense
economically and from a values point of view.
Senator Mercer: Mr. Awashish and Mr. Bombay, thank you very much for
your interesting presentations. I have only a couple of questions for each of
you, all along similar lines.
Mr. Awashish, you spoke about the number of people working in various areas.
I tried to add them up as we were going along, and I came up with 144. Have I
missed some people? What is the ratio of Aboriginal versus non- Aboriginal
people working in the industry? What is the split?
Mr. Awashish: At the plant itself, we said 60 persons, 55 of whom are
Aboriginal. In the five key positions, we do not yet have people trained to
occupy the plant manager and accounting positions. Our objective is to reach 100
per cent. We are talking about five non-Aboriginals who occupy top plant
management positions, such as the plant manager and the top foreman for
In forestry, silviculture, all the workers there are Aboriginal. The approach
used as an economic development plan in the community was to draw a distinction
between community projects and individual projects. The mill is a major
investment in the order of $10 million. No individual or group of individuals
had the financial capacity to establish a partnership with a large company. That
is why the Atikamekw Council of Obedjiwan got involved and the project was
designated a ``community project''. Other community projects are planned in the
community and the same approach will be used.
With regard to individual projects, that is interesting as well because our
approach was to acquire knowledge in the fields in which individuals invest.
With regard to transportation, buying a large wood transport truck is a $500,000
investment. We had to find a way to help the individual acquire the knowledge
and the financial capability. We established a program to partner with
non-Aboriginals in the region to operate a business to transport logs, chips and
saw dust by truck.
We established programs to assist these individuals in partnering with other
individuals in the region. That is the meaning of the approach we have used to
operate the plant.
Senator Mercer: One thing we have learned is how expensive it is to be
in this business: $500,000 for a truck and $500,000 for another piece of
equipment. It is an expensive operation.
You mentioned the tax-free status. It is tax free, but you have a
partnership. Are your partner's earnings tax-free as well? We understand the tax
status of Aboriginal people, but does it carry over to your partners?
Mr. Awashish: That is why we chose this legal arrangement which is
called the limited partnership. By comparison with an incorporated company or
another form of company, an incorporated company is taxed on its profits,
whereas a partner in a limited partnership receives its share. If
Abitibi-Consolidated receives 45 per cent of the profits of the limited
partnership, it will pay its taxes, whereas we pay no taxes on our 55 per cent.
That is a new legal structure in the forest industry. It was a bit more
complicated convincing our partner, which was a big company, but they ultimately
understood why we wanted to register in that way. And the example was followed
for other partnership projects. I remember that Hydro-Quebec used this
arrangement with Aboriginal partners.
Senator Mercer: You guys were pretty smart in setting it up that way
and protecting your tax status, which is a great advantage.
Neither of you mentioned the word ``certification'' when you talked about the
forests. If you did, Mr. Bombay, I missed it. Mr. Awashish, are your forests
certified, or are you working to certification of the forest? We have learned
that the market out there is changing and people are starting to demand that
wood comes from certified forests.
Mr. Awashish: We received our certification five years ago, I believe.
Senator Mercer: That is good.
Mr. Bombay, you said that there are about 80 foresters, 40 natural scientists
and 300 natural resource technicians, for about 420 people. You also told us
later that 10 years ago, you had identified the need for 500 to 600 foresters,
but we only have 80. How are we addressing the shortfall? We know there are not
a lot of people in any community going into forestry these days. How are we
addressing this? It must be becoming critical as we move along, if you only have
80 foresters and you have identified that you need 500.
Mr. Bombay: As Mr. Awashish pointed out, we often have to hire
non-Aboriginal people. Particularly on the business side we find that we engage
non-Aboriginal people to work with our companies, in key positions, often, as
Mr. Awashish pointed out. That is how the shortfall is being addressed right
now, is through hiring non-Aboriginal people or contracting with, say, forest
Many of them now have developed this Aboriginal forestry practice within
their companies and so there are several companies that have worked with
Aboriginal communities and helped them in running their businesses, developing
the forest management plans for the tenures they may hold. On the Aboriginal
side we have been able to define for these types of companies the key aspects of
forestry that we want built into our forest management plans; for example, the
values that we discussed earlier. Some of these companies have become quite
sensitive to our needs in that respect, and so have been key in assisting us in
building the Aboriginal forest sector. We have several companies like that.
However, as Mr. Awashish pointed out as well, the intent over time is to
build our own human resources in those areas, and that is what we have to
address. It is a problem, as you mentioned, attracting the right students to
study in these fields.
Senator Mercer: We talked about the federal government having a unique
role in the Aboriginal community as opposed to other communities. Is this one of
the areas we should be addressing in our report, focusing on education of people
for the forestry sector? You have identified a number of needs specifically, but
should that be one of our focuses?
Mr. Bombay: Yes, that is true. I think I indicated that at the
community level we have a real need for forest land managers — not only land
managers, but people who can manage our interests. We should be mounting some
type of campaign to get Aboriginal people into those schools.
We know there will be other areas of need, too, like wood science, for
example, and wood science technologies. We know that Aboriginal communities,
when they develop their resources, want to develop value-added processing types
of businesses. Wood science backgrounds and skilled trades that support
value-added processing would be another area where we should be looking. We
should look at focused types of training and programs to address that need.
Senator Plett: I also have a few questions for each of you and
probably will not get finished, so once I have exhausted my time, the chair will
let me know and I will go on a second round as well.
Mr. Awashish, you talked about having problems with credit. I think this is
probably along the same line as where Senator Mercer was going. You talked about
problems with having credit. Senator Eaton suggested that you have a fairly
large partner in what you are doing, yet one of the problems you are having is
getting credit to expand or develop your operation.
I would like you to explain the reasons. You suggest that, at least on 55 per
cent of your operation, you pay no taxes. That suggests to me that you have a
bit of an advantage certainly over companies that have to pay tax on 100 per
cent of their profits. You are associated with a large company that, I would
think, has good access to credit.
When you go for credit, you have a 55 per cent ownership. Most credit
institutions simply look at a bottom line and, if you are viable, they give you
credit. It has nothing to do with where it is. If it is a viable operation, most
companies offer credit. I am interested in knowing why you are running into
Mr. Awashish: I left the board of directors about four years ago.
Consequently, I cannot answer your question accurately. Obviously, our partner
had a role to play in negotiating with the financial institutions. The financial
situations of the partners were examined, but they relied more on the project's
viability in granting credit.
The project was profitable in the first five or six years of operation. Then
the crisis hit the forest sector, and as you know our partner,
Abitibi-Consolidated, has had financial problems in recent years. I assume the
banks have carefully analyzed the situation, as they do when they grant credit.
As a result of the crisis, we have posted losses since 2006, which must
trouble the financial institutions. What is more, the other company had to seek
protection under the Bankruptcy and Insolvency Act.
Senator Plett: Thank you, sir. My next question then, along that same
vein, is you have suggested the problems but I have not heard you suggest the
solution. What are you asking for? Are you asking for federal government
involvement in your operation? Do you want to take over more of the operation?
What is your investment? I am asking many questions here at the same time, but
what is your investment? Is your investment 55 per cent in this company? You own
55 per cent. Could you let the committee know at least what you would like to
see happen, other than obviously making more money and having more credit.
Mr. Awashish: At the start of the project, we did obtain federal
government assistance. In 1999, the National Bank for Economic Development
granted a loan of approximately $2 million to support our 55 per cent share.
Initially, if the project cost $7 million or $8 million, we had to find funding
to assume our 55 per cent share, while our partner assumed its 45 per cent
share. In addition to the federal government loan, there was also a contribution
from the community.
We agreed with our partner to establish a reserve fund, out of profits, for
The project was to enter its third phase. The lumber that comes out of our
mill is neither planed or dried. It is forwarded to Saint-Félicien, in the
Saguenay-Lac-Saint-Jean region, where it is dried and planed at a plant
belonging to our partner. The costs to transport the semi-finished product are
We tried to build the infrastructure for a road in cooperation with the
Government of Canada. Discussions were conducted with the federal government for
a tripartite agreement to build a 160-kilometre gravel logging road that would
link the Obedjiwan community to the provincial highway between Chibougamau and
Saint-Félicien. Given the high transportation costs, we tried to improve the
road by seeking federal government support. At first, the Department of Indian
and Northern Affairs told us that the matter did not come under their mandate,
that the department's mandate was to invest in the community and that other
matters were under the province's jurisdiction.
With the Infrastructure Program, I believe it is now possible to obtain
federal government support for infrastructure projects, in cooperation with the
province, to promote Aboriginal economic development. However, the file has not
moved in that direction.
In addition, a third phase of the project was planned in order to plane and
dry the wood in the community. However, the softwood lumber agreement blocked
our efforts and we were unable to go ahead with that third phase. That has put a
damper on our future investment projects.
Senator Plett: I have one question for Mr. Bombay. You mentioned in
your presentation that the Aboriginal people have not kept up with skill and
professional development, something along those lines. If I am wrong, correct
me. That is not the question, but am I correct in that statement?
Mr. Bombay: I would change the word ``kept'' to ``caught.'' We have
not caught up. We were never at the same level of skill development. It is not a
matter of keeping up; it is a matter of catching up.
Senator Plett: I will use the phrase ``caught up.'' The company I
owned for many years that my father started back in 1957, now being run or owned
by my two youngest sons, over the last 40 years has worked largely in Aboriginal
communities in Northwestern Ontario, Northern Manitoba and Northern
Saskatchewan. In many of the projects we have done, there were clauses in the
tendering stages stating we were required to use a certain amount of local
labour, Aboriginal people in the communities. It was part of the contract. We
have always tried to do that. The problem there, as I think you have here, was
finding the people with the skills to do the work. We are a plumbing and heating
contractor and so needed people with certain skill sets. We did not want to put
people on a shovel; we wanted to use people with certain skill sets and it was
In Manitoba I believe we have done an excellent job with some of our northern
colleges to allow people to come, for example, to The Pas and receive training
and become tradesmen and so on. It has improved. One of the communities, and I
want to speak a little bit about that, is Norway House where Chief Ron Evans,
now Grand Chief, did an excellent job of moving the community forward and
encouraging his younger people to go and get the training they needed. It has
gotten better, but we are still struggling with that.
I think that one of the issues is that the young people — I live in a rural
area — in our village seem to want to move into the larger cities. It is more
exciting, and so they move there and do not necessarily come home. I have felt
that maybe that has been some of the problems in some of the Aboriginal
communities. I may be wrong.
The point I am making is this problem seems to be widespread.
This is not just a problem in the forestry sector. I am not sure what the
answer is. I think that over a period of time the Aboriginal communities, along
with government, have tried to develop some solutions, for example, building
colleges up north so that the young people do not have to come to Winnipeg to
get their education. They can go to The Pas, they are an hour's flight from
home, and, in some cases, they can drive home. However, it has not seemed to
resolve all the issues.
I think the problems in my company are the same problems that we have in the
forest industry. I can identify with them, but how do we solve them?
Mr. Bombay: I do not profess to have all the answers. Governments have
faced that fundamental and difficult question for years, as well as the labour
market issues. Urbanization is occurring and probably will continue to occur
We have to appeal to the Aboriginal youth and link it back to some of the
values we have. We have to develop campaigns that make things relevant for them.
I have often thought that one of the problems with Aboriginal people acquiring
modern-day skills is that they do not see the relevance of the training or the
profession to them. They might come from communities with low educational
attainment levels, so they do not see it playing out in their parents or the
people around them. Developing relevance is important.
We have seen examples in Canada where, if you get a certain amount of
momentum, it snowballs over time. If certain people develop in a community, it
will influence how some of the youth develop over time.
It is important to develop programs that attempt to create this snowball
effect. In other words, get a certain number of people into these programs and
then communicate in a campaign about their achievements, what they are trying to
do and how they are trying to serve their communities to then create momentum in
It is important to make forestland management or Aboriginal forestry an area
to which youth can relate and why it should be important to them, their
communities, their children and future generations. That kind of message has to
be done, and resources should be dedicated to fostering that kind of campaign or
targeted effort at influencing youth.
We have Aboriginal leaders across the country who say the land is important
and that our relationship with the land has to be maintained. Then you ask how
do you do that. You have to become trained in an area that enhances your ability
to maintain that relationship with the land. In Canada, that means getting
involved in forest management. Those messages have to come across. Organizations
like ours have attempted to do that in the past, but we have never had
sufficient resources to do it well.
Senator Ogilvie: Mr. Awashish, you talked about a shortage of wood and
you are in the middle of a forest. Could you explain this shortage of wood
Mr. Awashish: It was a predictable problem, the more we looked at how
the forest was being developed, and here I am talking about the Province of
Quebec and especially my corner of the country. In my presentation, I talked
about the massive increase in logging, and I believe that the government of the
Province of Quebec adopted a new forest system around 1987. Forest development
contracts were granted to the major forest companies. Before that, more forest
concessions were made for development purposes. With those changes, wood volumes
were granted in the form of forest development; there were a lot of requests. A
number of logging companies, big ones and medium-size ones as well, got volumes
When we came up with our project, we had difficulty. Fortunately, there was
some willingness on the part of the minister of Indian Affairs at the time. He
made a political decision and gave us an annual volume of wood in the order of
60,000 kilometers. We managed to increase it to 120,000 kilometers. Since that
time, we have reached saturation. The answer we were given was that there were
no more available volumes of wood. They had all been granted to companies, even
though we were surrounded by forest.
Senator Ogilvie: You also mentioned a problem of land access. You
attributed that problem to the other forest companies. Give us a little more
information on that situation.
Mr. Awashish: I said, at one point, that the people in the territory,
even if their residence was in the community, continued to use their territory,
even though large forest companies were established there. They knew the
territory very well. We already knew there were virgin forests that had not yet
been developed. We were headed in that direction in order to secure wood volume
there. As soon as we began operating the mill, we saw at one point that there
was a kind of strategy at work. The companies quickly moved in to cut there so
they could go after forest more quickly because that was where we wanted to
develop our wood.
Senator Mahovlich: This committee visited Chibougamau. I was very
impressed with what they have accomplished, for example, a sports centre and a
new museum, all built out of wood.
Do you encourage this type of community? Does Abitibi encourage the Obedjiwan
nation in their arts and handicrafts? Are the traditions still kept? Are we
losing that tradition, or are we encouraging our youth in the Aboriginal
Mr. Bombay: I have not had the opportunity to visit Chibougamau.
Senator Mahovlich: It is only 100 kilometres away.
Mr. Bombay: It is a little farther than that. We should be making
hockey sticks there.
Senator Mahovlich: That is right. We need more hockey players.
Mr. Bombay: I have heard of the community. I have read articles about
the community, and I understand a lot of the construction is wood. Many
Aboriginal communities, when they build their structures, prefer to build in
If you look at the West Coast in particular, the communities out there use a
lot of cedar. They also use totems to authenticate the types of structures they
build today. You see a lot of that and wood is a material that Aboriginal people
prefer to use. It is evident in the communities where they have been able to
acquire the resources to build such structures and to process the wood to build
That is the type of thing we have to keep doing to encourage our youth to
build on the traditional skills around the creation of contemporary wood
products. We have to encourage them to use the knowledge they have about carving
and producing those traditional wood products, while bringing them into a more
contemporary type of use and appealing to a larger market out there in terms of
It is one of the ways we can use traditional knowledge and some of our
traditional skills in advancing Aboriginal forest product development.
Senator Mahovlich: You mentioned plantations. Abitibi would probably
like to have more softwood plantations. Softwood trees grow quickly and are put
to use quickly. After all, they are in the business of the bottom line and this
would quadruple their profits.
We had witnesses this past week who said there were two or three plantations
in the province of Quebec. Do you encourage this type of plan?
Mr. Awashish: Earlier I mentioned that I have witnessed a regeneration
of the forest that has not yet reached full maturity. I noticed that more grey
pine was being planted. That pine grows more quickly than other kinds of
softwoods such as black spruce, among others. I also heard that genetic
improvement research was being conducted. Research is being done to develop this
kind of softwood, which is more weather-resistant and grows more quickly. There
is obviously a major financial concern there. For our part, around 1985, we
established a forest services company, which belongs 100 per cent to the
Obedjiwan Band Council, to do planting. Our immediate concern in that regard was
that large forest areas had been cut. It was not necessarily a major concern for
the companies; it was more a responsibility of the government's programs; there
was an obligation to replant where wood had been cut. It was in that area that
we got involved. Obviously, our politicians definitely denounced that kind of
approach, which consisted in favouring only one species of tree, the grey pine,
over the entire territory. We said at the time that it would no longer be the
same territory as it was before the big logging operations.
We are concerned about the current forest development approach.
Senator Mahovlich: That is true because certain animals like certain
trees. I had a poplar growing on my property and once it matured, a beaver came
along and cut it right down. A bear will like a certain tree and a moose will
like a certain tree to scratch against. You need to have a variety of trees.
This could be a problem when a corporation comes in and creates a plantation. It
will affect the whole animal system.
Senator Kochhar: It was a learning experience for me, trying to learn
more about the Indian way of life.
I was a little struck, Mr. Bombay, when you made your presentation and you
said that for most of the businesses, you are not profit oriented or motivated,
you are value motivated; values are more important than profit. In my culture,
unless you have a profit, there is no other motive except to have good values.
Profit is the underlining principle of any business because you cannot expand
without profit. You cannot buy a $500,000 truck without a profit and you cannot
employ more people without a profit.
You also talked about the obligations of the federal and provincial
governments, but I heard nothing about the obligations and responsibilities on
the other side. When you go into a partnership, you give and take, just like in
marriage; you give a little bit and take a little bit. Yet in all the
presentations I have heard, it is what other people can do to enhance the values
and culture and how you can preserve it. I just want to get a little more
educated, so if you can elaborate on that, I would appreciate it.
Mr. Bombay: When I was speaking of profit, I was looking primarily at
the forest management side in the forest sector, as opposed to the forest-based
businesses that operate. A division we make very often in the forest sector is
the management of the resource and the downstream utilization of the resource.
There are two sides. When I was talking about less profit focused, I was talking
more about the forest management side in terms of how we manage the land.
However, I think there is some truth overall in the statement I made from the
perspective of First Nations, that we are less profit motivated. We do, however,
seek means to address our social needs, some of which are employment related.
One of the best known forest management regimes by a tribe — this is in the
United States — are the Menominee people. I am not sure if any of your previous
presenters talked about them as a case study in terms of how to run a forestry
operation. In many cases, the Menominee have avoided going to higher technology
in their milling processes to increase the amount of employment in the mill. If
they had brought in different types of technologies into their mill, they would
have had to lay off probably two thirds of their workforce.
There are tradeoffs to be made, so the value becomes one of employment as
opposed to profit. In Canada, we see the big mills going to the latest
technologies. This technology is costly and tends to reduce the employment in
the plant. I know some pulp mills today run with 18 or 20 people on a shift
compared to 30 or 40 years ago, when there were 200 people on that shift.
We know that while the technologies have been good for the bottom line, they
may not have been good in terms of the benefits you derive. Those are the
balancing things you have to make in terms of running a business and a forest
In some cases, Aboriginal people may choose to forego the profit and instead
share the benefit in terms of employment. That is not always the case. Everyone
has to make his or her own decision on that at a business level. Overall, we
have to be aware on the business side that we have to make money to stay in
My home community is Rainy River First Nation in northwestern Ontario, and we
have operated a mill on our reserve for 30 years. It has changed in terms of its
product mix over the years but we have been able to keep that mill afloat. This
small mill makes more money than AbitibiBowater does in terms of the profit and
loss statement. We have profits when many of these big forest companies are
We have to focus on the profit and the bottom line, as well. There is no
question about that. Our businesses have to be profitable and sustainable; that
is something we have to build.
My statement had to deal with the balancing of benefit, both on the forest
management side and on the business side.
Senator Plett: Mr. Awashish, how much of the land that you forest is
reserve land and how much is leased? I assume the rest is leased from the Quebec
government. This goes back to what Senator Ogilvie already touched on; namely,
someone was encroaching on your forest. I would consider someone coming in and
cutting down my trees to be poaching. Therefore, why is that happening?
Mr. Awashish: To get a clearer understanding of the situation, first I
am talking about reserve land as defined in the Indian Act. When I talk about
the Obedjiwan community, that is the reserve land. As there is not enough forest
to operate a sawmill on that land, we therefore had to look outside the
Senator Plett: Is that leased?
Mr. Awashish: It is in that sense that I also refer to traditional
lands, family lands that are frequented by large families.
When I approached the government, I told it: ``I am not coming to negotiate
my land rights; I am coming to see you to solve a problem. Major operations are
being carried out on our hunting lands; would there be a way to agree to start
up a sawmill project, to operate a sawmill?'' I said: ``This is not a claim, but
a business venture. I am asking you whether that is possible.''
As I told you earlier, it stemmed from a political wish. Despite the scarcity
of the resource, the Quebec government made a positive decision. From there,
they granted us a certain volume of wood to operate the sawmill.
However, the way Quebec's forest system operates, they have developed units.
They grant volumes of wood per development unit. In a development unit, there
may be two or three forest supply contract recipients. There were two forest
supply contract recipients in the development unit: a large company that was not
Abitibi-Consolidated and the Scierie Obedjiwan.
I mentioned that to you earlier; they were targeting a specific area of our
traditional lands, and when the other company realized we were coming into the
picture, we got the impression they quickly went after that volume before we got
Senator Plett: Mr. Bombay, you referred to creating an area of land
for Aboriginal tenure. You said the First Nations would use their own style to
develop that land. Could you explain those two comments to me?
Mr. Bombay: I am not sure of the leasing situation in Quebec, but
forest tenures in most provinces grant different types of tenure: It is either
area-based or volume-based tenure.
Senator Plett: Which is what you have, is it not?
Mr. Bombay: Yes. Mr. Awashish referred to the small size of reserve
lands. I do not know if people appreciate that Indian reserves in Canada are
very smaller. They are smaller than most private farms owned by Western
ranchers. The Royal Commission on Aboriginal Peoples made a statement about the
size of Indian reserves in Canada. At that time, you could put every Indian
reserve in Canada in the Navajo reserve in the United States.
The land base Aboriginal people have to use in home communities of reserve
lands are not adequate to develop a forest-based businesses. The wood is simply
When we talk about tenure, we are seeking tenure on what is known as Crown
land. We have rights on those lands; we have Aboriginal treaty rights to use of
land in our surrounding territories. That is reflected in treaties and the
concept of Aboriginal title in British Columbia.
Taking what is granted in treaties and the concept of Aboriginal title into
something that is usable today in terms of management structure, forest tenures
have been the means to do that. It is an interim measure, more or less, to any
final reconciliation of Aboriginal treaty rights. Therefore, forest tenure
becomes important as a step along the way. Forest tenure, is the way in which
you grant resource use on forested land. It is vital to First Nations developing
in the forest sector. We have to have access to resources.
It is more about the management of that land and basing that management on
our values. We do not have many good examples of how we take traditional
knowledge and apply it in a commercial sense and whether, in some cases, we want
to do that. There is a lot of sensitivity around say, medicinal use of forest
resources in terms of what needs to be disclosed in the form of traditional
knowledge. Those are sensitive issues around forest use.
It is important that Aboriginal people have a say in the management and
development of the land. Gaining tenure enables them to do that, if the tenure
arrangements are flexible enough to reflect those Aboriginal values.
The Deputy Chair: The time allotted for our meeting with the witnesses
is unfortunately over, and I would like to thank Mr. Awashish and Mr. Bombay, on
behalf of all the committee members, for your presentations and for your answers
to our questions. Good day to you.
We will now take a brief break, and the committee will reconvene in camera.
(The committee continued in camera.)