Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 5 - Evidence - Meeting of September 27, 2006 - Afternoon
WINNIPEG, Wednesday, September 27, 2006
The Standing Senate Committee on Aboriginal Peoples met this day at 1:26 p.m. to examine and report on the involvement of Aboriginal communities and businesses in economic development activities in Canada.
Senator Gerry St. Germain (Chairman) in the chair.
[English]
The Chairman: We, as a committee, have been authorized to examine and report on the involvement of Aboriginal communities and businesses in economic development activities in Canada. We have before us Mr. Joe Morrisseau, Executive Director from Manitoba Aboriginal and Northern Affairs. From Manitoba Hydro, we have Bob Monkman, Manager of Community Relations, Aboriginal Relations Division.
Joe Morrisseau, Executive Director, Manitoba Aboriginal and Northern Affairs: I want to start by thanking the Senate for inviting me to come here and speak to you on behalf of my deputy minister who is away on vacation. I am his alternate.
I have handed out a PowerPoint presentation. I will speak to very specific pages so we can move along quickly. Including some background Aboriginal demographic information that I have for you, I am going to speak to you about two particular initiatives that we have in Manitoba. One of the initiatives is called Strengthening Aboriginal Participation in the Economy, SAPE for short. The other initiative is called Closing the Gap that came about out of the Kelowna talks this past November.
The Manitoba Strengthening Aboriginal Participation in Economy Initiative flows from a report produced by FPTA officials, federal-provincial-territorial Aboriginal officials, and unanimously approved at a FPTA meeting in Winnipeg in May 2000. The meeting included FPT ministers of Aboriginal affairs, and leaders of the five national organizations, the AFN, MNC, CAP, ITC and NWAC. As some of you may already know, Closing the Gap happened last November in B.C. where it was determined that there was an unacceptable gap between Aboriginal people and the general public in a number of areas including health, education, housing, relationships and economic opportunities. At the Western Premiers Conference, the premiers met with the National Aboriginal Organizations, reaffirmed their commitment to closing the gap, and discussed strategies to achieve the participation of the federal government.
On page 2 of my presentation, I am simply trying to show the annual growth rates in the Aboriginal community. The Aboriginal population is growing at a rate of up to 10 times the non-Aboriginal population here in Manitoba; that is a significant growth.
On page 3, in terms of an Aboriginal profile, in the 2001 census, Manitoba's total population was 1.1 million with the Aboriginal population almost 14 per cent. In the cohort of children from zero to 14, in that same census, the Aboriginal population makes up 23.1 per cent. In the zero to four cohort, children make up an even greater percentage, 25 per cent of the Manitoba population. Approximately 40 per cent to 50 per cent of Aboriginal people reside in the City of Winnipeg, 60,000 to 70,000 people.
When we talk about participation in economy, we refer to a very broad concept that includes more than just jobs. It includes everything from employment, unemployment, underemployment, education training, small business, investments, and community development. We must make a commitment to address barriers to full participation.
I know your mandate is economic business development for the Aboriginal community and one thing that we would like to emphasize is regardless of the issue, education is the key to any success. Unless we address educational issues, we are not going to succeed in areas ranging from health issues to justice issues to family and children issues. Education, we feel, is the key and it is the key to promoting opportunities for establishing Aboriginal businesses.
On to page 5, we show some examples of gaps. According to the 2001 census, Aboriginal people age 50 years and over had a median income of $12,500 as compared to the non-Aboriginal median income of $21,600. If you go back five years, the difference is very similar. The Aboriginal people 15 years and over had a median income of $10,000 and the non-Aboriginal median income was $19,000. We gather from the statistics that the situation is not getting worse and has been more stable over the last five years.
Income levels vary greatly among Aboriginal groups. For example, according to the 2001 census, the median income for Metis individuals was $15,900 as opposed to $10,500 for North American Indians. Using the same data, the median income of those North American Indians on reserve was $8,900, which is a significant gap.
In terms of economic well-being and employment rates, Aboriginal people had an employment rate of 47.8 per cent as compared to 62 per cent for the non-Aboriginal community. This reflects a difference of 17 percentage points. That compares fairly well with the previous census in 1996 where the difference was 23 per cent. Although that is a very short time period and it is difficult to assume any trends, the percentages are encouraging. Again, employment rates vary between the different Aboriginal groups in Manitoba.
On page 7, we talk about participation rates of Aboriginal people in education and at various levels of education. This chart illustrates the relative disparity between the Aboriginal population and general population using participation rate and unemployment rate indices at various education levels. The indices are calculated by dividing the percentage values for the Aboriginal population by those of the general population for each perspective education category. An index value greater than one indicates proportionately more Aboriginal representation in that category while an index value of less than one is indicative of proportionately less Aboriginal representation in that category. With the exception of some high school categories, the participation rates for Aboriginal population in the West are equal to or greater than that of the general population for all educational attainment levels. The fact that Aboriginal individuals in the West that have a high school certificate are participating in the labour force to a greater extent than the general population has positive implications for Canada's future labour supply and market.
The next slide, on page 8, shows that while the participation rate of the Aboriginal population is higher than that of the general population, the unemployment rate is one and a half to three times higher than the general population in Western Canada. In our view, that is a significant finding. For nearly all education levels, the unemployment rates for the Aboriginal population are at least twice those of the general population, and in some cases, the index values are four times as great.
We also looked at some of the studies that have come out in Western Canada, particularly from the Canada West Foundation out of Calgary, which has done extensive reviews of the Aboriginal community in Western Canada. The Canada West Foundation concluded that even though participation rates of Aboriginal people are similar to the general population; Aboriginal people have less success in securing and obtaining employment. The Aboriginal unemployment rate is three times that of the general population. Further, educational attainment is a strong factor when considering success. The survey found that Westerners consider improving Aboriginal education and labour market outcomes to be an important government priority. They concluded that programs should be based on successful ideas and strategies that have been applied to actual situations and should be evaluated to be applied effectively to Aboriginal individuals.
Slide 12 concerns what the Province of Manitoba is doing to strengthen Aboriginal participation in the economy. This concerns the participation of Aboriginal people in the Manitoba economy through education, training, employment, small businesses, investment, community development and addressing the barriers to full participation. We need to enhance existing initiatives and develop new strategies. We talk about outcomes here as opposed to programming. We need to have new strategies to achieve the following outcomes. One of our outcomes is to increase Aboriginal business and entrepreneurial development. There are a number of other outcomes. To address barriers, we need to increase graduation rates and focus on youth at risk. The Aboriginal community should have access to work experiences at a very young age and the governments and the Aboriginal community have to work with corporate leaders and employers.
At the beginning of my presentation, I mentioned Closing the Gap, which has a 10-year time horizon to 2016. Closing the Gap exists as a government wide framework strategy for addressing socio-economic gaps between Aboriginal and non-Aboriginal people in Manitoba. The plan calls for a 10-year effort coordinated by an interdepartmental committee of senior staff from each department. The Department of Aboriginal and Northern Affairs is the lead on plan. The work of this initiative is just starting. The interdepartmental committee had their first meeting and working groups are to be struck in the coming October in the five areas that I mentioned: education and early childhood, relationships and accountability, housing and infrastructure, health and well-being and economic opportunities. The way we are approaching Closing the Gap is to build upon, rather than replace or duplicate, existing interdepartmental processes. Closing the Gap depends heavily on the efforts of other departments. Aboriginal Affairs cannot achieve success in closing the gap by itself. The departments of health and education have to buy into the plan and we have to get their assistance as we move through the estimates process to bring new initiatives forward. An emphasis will be placed on producing a positive environment for departmental initiatives by enabling them to reside within the framework of a more coordinated, broadly based approach to planning, development and implementation.
We are not by default talking about the closure of gaps in a purely statistical sense. Given the characteristics of the Aboriginal population, i.e. the age structure, it is not always a matter of ensuring numerical equivalence. When measuring progress, we will need to take into account a wide variety of these factors. For example, younger populations are at a different point on their career paths and it may not be reasonable to expect that group to have the same average income.
Closing the Gap is our opportunity to coordinate the efforts of the provincial government and partners in the federal government, the Aboriginal community and the private sector, to focus on an objective that is as important for all Canadians. That objective is to improve the quality of life for Aboriginal people wherever they live. Achieving this vision requires the kind of action that can change the world.
I would like to relay a quote from Black Elk, ``A vision without action is only a dream. An action without vision is only a chore; but a vision with action can change the world.''
I will forward a copy of this report to the committee. The Premier of Manitoba, Mr. Doer in 2005, had a summit on Aboriginal business development and increasing the Aboriginal workforce. He struck an economic advisory committee which was made up of the Aboriginal community and business leaders in Manitoba. This was published in 2005 with some good information in it.
Bob Monkman, Manager of Community Relations, Aboriginal Relations Division, Manitoba Hydro: I would like to thank the Senate for inviting Manitoba Hydro to do a presentation on the economic activities within the Aboriginal communities. I will share with you what initiatives we have taken and implemented throughout our Aboriginal communities.
I apologize. I realized today that we are supposed to have this presentation in French as well. I have just come back from the bush, operating my moose hunting camp so I did not have much time to prepare.
Manitoba Hydro has a workforce of 5,500 people of which 700 employees are of Aboriginal ancestry. Manitoba Hydro's objective is to be the best utility in North America with respect to safety, rates, reliability, customer satisfaction and environmental management and to always be considerate of the needs of customers, employees and stakeholders. We recognize that strengthening working relationships with Aboriginal people is of critical importance. The corporation has a goal to be a leader in strengthening working relations with Aboriginal people.
The critical factor defining the relationship is that we have large investments in areas where Aboriginal people live and work. Important to strengthening the working relationship is reconciliation of the interests and ambitions of those Aboriginal people whose identity is connected to traditional, cultural and spiritual relationships with the water bodies and lands we affect.
Aboriginal participation in our planning, construction, operation and maintenance activities is diverse and wide- spread. Economic relationships exist on several levels including trainees, employees, suppliers, customers, contractors and claimants. The relationship is different for Aboriginal members of many northern communities compared to Aboriginal people in the urban and southern rural communities.
Our corporate strategic goal is to be a leader in strengthening working relationships with Aboriginal peoples. Our strategies include resolving and managing ongoing issues arising from existing works and operations. We intend to increase employment and career opportunities for Aboriginal people. We plan to continue to enhance training and retention programs for Aboriginal employees, and promote and pursue business relationships with Aboriginal companies.
The utility's workforce consists of highly technical staff with 75 per cent of careers in trades, finance, technology and engineering. We believe our workforce should be representative of the communities where we live and work. We have Aboriginal employment targets to be achieved by 2007 as follows: 12 per cent Aboriginal employment corporate overall, 37 per cent northern, 5.5 per cent in management occupations and 6 per cent in professional occupations. Recently, Manitoba Hydro exceeded its corporate overall and northern Aboriginal employment targets.
We have learned that employment success requires an integrated approach to recruitment, selection, training, retention and advancement to help individuals succeed. In our business, opportunities exist in short-term jobs with construction contracts, on-the-job training for individuals in the construction workforce, long-term operating and maintenance jobs, on-the-job training for corporate employees, pre-placement training positions for operating and maintenance jobs and jobs in training with contractors providing operation and maintenance services.
We have a northern purchasing policy that has been applied since the early 1990s. In the past 10 years, hydro has purchased goods and services from Aboriginal businesses valued at $300 million. The policy promotes the participation of northern Aboriginal businesses in our economic activities. The policy enables practical measures to be undertaken such as information exchange, matching work packages to community business capacity, direct negotiations or restricted tendering, and joint ventures with non-Aboriginal businesses.
Our future development strategies include maintaining an ability to construct hydro operations at the earliest practical opportunity. We are undertaking planning activities to prepare for export market opportunities. Aboriginal participation in future development include broad consultations, traditional knowledge included in the environmental assessment, contracts with northern Aboriginal businesses, negotiations of adverse effects arrangements before construction and potential income opportunities associated with export driven projects.
We want to maximize the Aboriginal advocacy for commercially viable and environmental acceptable projects. To do that, we need to align the interests of Aboriginal communities with ours by providing practical, social and economic opportunities for community residents to enhance their well-being.
Manitoba Hydro is pleased to share its experience in engaging Aboriginal people in its economic activities. You asked what advice we would give others pursuing economic development activities. We recommend that early in the planning stage, organizations sort out their own interests. They should clarify the need for, desired outcomes from, and preferred processes for Aboriginal participation. This adds value to the development process. Two, we recommend the development of strategies for improving intercultural relationships and for dealing with cultural issues and challenges that exist in the workplace. Our third recommendation is to challenge people to rethink their assumptions and personal biases and promote understanding and respect of Aboriginal cultures and different worldviews.
You asked what this committee should recommend to the federal government. We have four comments. We suggest that the federal government make investment capital available for Aboriginal entities to invest in economic development activities. We recommend that the federal government allocate more resources to community based education and training so that literacy and technical and business competencies are strengthened and individuals get an opportunity to acquire the basic skills required for technical and professional occupations. We recommend the continuation of the Aboriginal Skills and Employment Partnership Program. Our last recommendation is that the federal government provide incentives to train, employ, contract, mentor, coach and partner with Aboriginal people in economic development.
You asked us what problems and challenges we have faced. Our main comments are clarifying our corporate responsibility to engage Aboriginal people in the economic activities associated with our business. We have to deal with the difficulty of recruiting qualified Aboriginal applicants for job openings in technical or professional occupations away from home. We have problems with building internal capacity to manage new participation processes and related complexities. We have problems managing legacy issues related to adverse effects.
You asked what, in your experience, is the reason for these challenges? One, concern is that the process costs and time involved with Aboriginal participation cannot be sustained by a project. The curriculum of many Aboriginal communities does not enable students to acquire the entry-level skills and knowledge required for technical or professional occupations.
You asked us what would be necessary to overcome these challenges. Our comments include a willingness by senior managers to be innovative in addressing the challenges of Aboriginal business partnerships, and continuous learning and effective implementation of policies and programs that remove barriers to greater Aboriginal participation in economic activities.
You asked what has helped us to succeed. Four main factors have contributed to our success. One is a strategic business assessment of our Aboriginal interests and senior management commitment to addressing issues with Aboriginal leaders. Another factor is the process arrangement for guiding participation relationships with diverse Aboriginal interests. Addressing the adverse impacts that common myths, stereotypes and prejudices related to Aboriginal people have on individual and organizational effectiveness is another factor. The fourth factor is early collaboration on project opportunities with Aboriginal interests in ways that develop effective and ongoing work relationships. This concludes the presentation.
Ekosi. Meegwech, thank you.
The Chairman: Could we say that some of Manitoba Hydro's facilities are on traditional Native lands? Is there any resource revenue sharing with them once it is established that the facilities are on the Aboriginal people's lands?
Mr. Monkman: We do not have any revenue sharing with any of the Aboriginal communities. The reason for that is that the provincial government owns us; therefore, the revenue sharing will be through the province and not through the company, Manitoba Hydro.
The Chairman: Are there any facilities like Kelsey on any of the treaty lands?
Mr. Monkman: No, there are not.
The Chairman: Are these lands being discussed in land claim settlements or as treaty land entitlements?
Mr. Monkman: A number of TLE lands have been awarded to some of the communities based on other issues and settlement agreements that we have through the Northern Flood Agreement and comprehensive agreements.
Senator Peterson: My question is to Mr. Morrisseau. In your presentation, you said there is a new initiative. I think page 12 really outlines the whole picture of what you would like to do in strengthening participation of Aboriginal people in the province. In order to fund or implement this type of a program, would the government be considering sharing resource revenue from the northern developments on a definitive amount of the revenue from the generation of power so that over a longer term a strategic plan could be put together?
Mr. Morrisseau: I am not sure how to answer the question but there are plans on the next station to be built called Wuskwatim, which is adjacent to a Cree community. In English, it is called Nelson House. There is a Cree name for it and I would not do it justice to try to pronounce that name but it is Nelson House, which is just north of Thompson. There has been an agreement signed between Manitoba Hydro and the community of Nelson House where the First Nation at Nelson House has joint ownership of that station. I believe that agreement was signed this past May or June.
Mr. Monkman: The papers were signed on June 6.
Mr. Morrisseau: That venture will provide revenue to that particular community as long as the rivers flow and as long as the station generates power.
In the past, the Manitoba government along with the federal government has tried to provide remedial programming and monies to the communities affected by hydro development. Mr. Monkman referred to the Northern Flood Agreement, which was signed quite some time ago when the first generating stations on the Churchill/Nelson River systems were built. That agreement proved to be very difficult to implement and subsequent negotiations occurred and comprehensive agreements. It was between the two levels of government and the five First Nations that were affected. Those five were Nelson House, Cross Lake, Norway House, York Landing and Split Lake I believe. After the agreement was signed and some effort was made to implement it, progress was slow and negotiations were undertaken directly with individual First Nations, which resulted in the comprehensive agreements to which Mr. Monkman referred. I do not have the details of those agreements but they were multi-million dollar agreements along with other programming to compensate the First Nations for the damage that was done to not only the land within their reserve but within their traditional territory.
Their traditional territory is also a concept I think bears some explanation. The majority of the land in Northern Manitoba is provincial Crown land by virtue of the transfer that happened in 1930, where the federal government transferred that land to Manitoba for administration. Virtually all of Northern Manitoba, beyond the Department of Aboriginal Northern Affairs boundary, is what they called ``unorganized territory'' and that is Crown land.
Now, the First Nations and Metis people have lived there a long time and so they have their traditional territory. Through discussions, particularly on the five communities that I talked about, there is a general acceptance that the traditional territory mirrors what their trapline zones encompass. You can map it out and you can show their traditional territory where they traditionally hunted and fished and trapped. From a real point of view, that is provincial Crown land though.
Senator Peterson: I understand that, but how do you quantify it, rather than trying to define damages? If you go into the revenue source, which is definitive, it will be much easier because I presume the revenue has escalated over the years quite substantially in that area. If we removed a portion of that per kilowatt-hour, it would probably be a lot easier to calculate. From what you are saying, it may be an ongoing process of trying to do that.
Mr. Monkman, I see that Manitoba Hydro is very involved with the Aboriginal community in employment procurement. I noticed you already reached your target of 37 per cent northern employment. Is that 37 per cent of the workforce?
Mr. Monkman: Yes.
Senator Peterson: You reached that before the 2007 deadline. Would you consider bumping that up to 50 per cent?
Mr. Monkman: Absolutely.
Senator Peterson: You are?
Mr. Monkman: Certainly. We would re-evaluate. We set some goals many years ago in a committee. We set those numbers. We were not sure if we could meet them. We said at that point, if we could manage that, we would make the goal higher.
Senator Sibbeston: Mr. Morrisseau, has the government ever gone to the extent of negotiating contracts with Aboriginal people in communities? I know in the Northwest Territories where I come from, there is a highway that goes through a native community and the government just simply negotiated the maintenance contract with the band or Metis company that is in the area. That is a quick way for those people to get into business, have contracts, and get to know the corporate world. Is there anything like that in Manitoba?
Mr. Morrisseau: Yes, senator, there is quite a bit of that going on in Manitoba. Maybe I will start with just my own department. My department is made up of three divisions, local government, development, and the Aboriginal affairs secretary. I am attached to the Aboriginal affairs secretary. The local government development division administers programming to some 50 small northern Aboriginal communities, not First Nations, but Aboriginal, Métis and so on. As part of that, there are capital expenditures like water and sewer and internal road construction and repair. To achieve community benefit from that expenditure, it is the department's practice, when a tender is about to be let, the local government does their capital expenditure planning in consultation with local government representatives from the communities. In that way, the communities know where the capital expenditure is going to happen and in which community for the coming year. During the construction season, the department, wherever possible, lets the contract go through the community council and provides support to that community council to administer the contract. That way, companies bidding on it have to deal directly with that community and the community reps for community benefit, like jobs, small contracts and so on. That happens in my department.
On a corporate basis, through the provincial department of government services, there is something called the Aboriginal Procurement Initiative. Through this initiative the Government of Manitoba is trying to encourage small Aboriginal businesses to respond to services and goods that the province needs. The government services people have tried to market that in the Aboriginal community. We now have a list of companies who we know can bid on contracts.
Internally, my department follows the general manual and lets the contract go to the best price, that kind of stuff. You have to take special measures with those communities, you have to develop tools that they can use, and we are doing that. The big departments like health help them develop the tools to allow the Aboriginal community to supply them.
Now something else I think worth mentioning is the expansion of the floodway here in Winnipeg. In that initiative, there are a number of practices where there is not only a percentage of jobs that are targeted for Aboriginal people but a percentage of the actual contract work is targeted for the Aboriginal community to bid on. Nelson House bid on a contract and won it for the floodway and they are gaining the experience with earth moving. They will use that experience for Wuskwatim, which is being built next to them. They are going to use that experience and apply it there. That is what I am assuming
The Chairman: Are you or are you not negotiating a revenue resource-sharing scenario with the Aboriginal people in Nelson House?
Mr. Morrisseau: Perhaps Mr. Monkman can answer your question more specifically. My understanding is that revenue will accrue because of the ownership in the station. Nelson House has negotiated part ownership of the station.
The Chairman: Is it on their reserve lands or is it on their traditional lands?
Mr. Monkman: It is on traditional lands.
The Chairman: If that applies, why would it not apply to all these facilities because in these remote areas, these people do not have a hope of ever establishing an economic base unless they are able to share in the revenues derived from the development of resources? That is all I am thinking. I have been up there. I flew airplanes up around Kelsey when it was developed in the 1960s. I am familiar with the area and I know the area. It is like sharing in the reserve because it is a way of back-dooring it and saying you are not going to share directly in the revenues that flow from the hydroelectric power; you are going to share in the fact that the hydroelectric company is going to pay to use a facility that is developed on the land. Why would it not apply retroactively to the others if you were going through this process on this particular one?
Mr. Monkman: I suppose it is a project and it is a partnership where they have invested their own money into that project up to a certain percentage to be part owner in that revenue that flows from that station. However, there have been times when Manitoba Hydro has not made money, so the losses would also be incurred equally.
Senator Dyck: On the written presentation on page 2, it says there is a significant overlap of corporate and Aboriginal interests in Northern Manitoba. I think that is sort of what we are talking about here. Obviously there are business and environmental issues that affect both communities. Later on in the papers on page 6 and 7, you talk about future agreements. It sounds like in this case, these agreements are those situations in which the particular First Nation was able to have some equity and buy into the future options.
Is that the way it goes? In order to become a significant partner, the First Nation community has to have the money to pony up in order to benefit from whatever Manitoba Hydro might potentially produce as a profit.
Mr. Monkman: That is true, with all the other proposed stations, like Conawapa. However, we put money in the initial project for Nelson House, to move the project forward.
Senator Dyck: Manitoba Hydro invested to start something up.
Mr. Monkman: Yes.
Senator Dyck: I quote from page 4 of your presentation,
Important to strengthening of working relationships is the reconciliation of our interests and ambitions with those of Aboriginal peoples whose identity is connected to traditional, cultural and spiritual relationships with the water bodies and land we affect.
Can you expand on what you mean by that word ``reconciliation'' and what would you do? How would you go about this reconciliation?
Mr. Monkman: Part of the reconciliation was the comprehensive agreement that we made with the communities. That was in the 1990s. The other part of this includes the development of new stations and lines. There is a transmission development fund for the new line that is going to be built for Wuskwatim where so much per year is submitted to that community within that area as long as a transmission line is there. The same idea would be with the bigger stations we build and which is a much longer line that would travel hundreds of miles. We would anticipate that we would develop those kinds of programs that were not there in the past.
Senator Dyck: The future will allow this compensation but it will not be retroactive to the past.
Mr. Monkman: I cannot speak to that because I do not know. I can say that to my knowledge, that is not the intent of where we are going to go with it. The comprehensive agreements and some more that are still outstanding would be under the process we would want to use at this point.
Senator Dyck: What targeting standards do you set when hiring the designated groups? Did you have consultation with the groups in northern Manitoba, for example, where the majority of people are Aboriginal? The targets there clearly should be different than they would be from other areas where the Aboriginal population is less. Do you take that into account when you set the targets?
Mr. Monkman: Yes, we did. We looked at the North. Most of the trade jobs we have are electricians, mechanics, et cetera, and they are red sealed provincial trades across Canada. We look at the graduation in northern schools, and at what level they are at and at the other pre-placement programs. That is part of the process. We try to determine how long it will take the students to get to the grade level that is necessary in order to fill the jobs. In the pre-placement program, we calculate the cost of paying to educate Aboriginal students to do the job. Mr. Morrisseau talked about the demographics of the North and the province. We look closely at those demographics.
Senator Dyck: You must have had a good working relationship with the various communities in order to initiate a pre-training program so you can match your needs with the community needs.
Mr. Monkman: It is not always that easy, because the community might say that it is not their goal. You have to be careful on how you approach that situation. We did have a lot of working relationships with the schools. Most people on our committee are Aboriginal, myself included and we come from those communities. We know what it is like to come up through the ranks. We know the ins and outs of getting to where we want to be in life.
Senator Hubley: Mr. Morrisseau, I am looking at page 6 in your presentation and the gap in employment. It relates the Aboriginal and non-Aboriginal employment rates in 1996 and then in 2001. As you indicated, there is an improvement in the 2001 graph for the non-Aboriginal persons or students. I am wondering if you can identify what might account for that favourable number. Can you tell me if that trend will continue?
Mr. Morrisseau: Yes, I think we are going to improve and I think the improvement will be because this generation of Aboriginal people are staying in school and going on to post-secondary institutions. Therefore, from the Aboriginal side, from the supply side, there is a lot more emphasis on education and training. On the demand side, if I can put it that way, in the business community, there is a growing awareness of the untapped strength we have in the Aboriginal community. In the private sector, there is much more of an understanding of the Aboriginal issue and there is an understanding of the demographics. I pointed out that whether we like it or not, we had better pay attention to that demographic.
As you are probably well aware, there was a publication a number of years ago, a warning to everybody that in the entire developed world, that we are going to be competing for workers. That competition is starting now. Here in Manitoba, we have an under-utilized Aboriginal population. I cannot help but think it is going to improve. The private sector recognizes that unless we train and educate Aboriginal people to participate in the economy and unless they are in producing jobs, they will be on the other side of the ledger so to speak. They will be clients, if I can put it that, of the misery departments, as I like to call them. I refer to the Department of Justice and the Ministry of Community and Social Services. We either address it or develop programming to make that happen or we pay for it in a much bigger way and in a different way.
Senator Hubley: Do all large companies mirror Manitoba Hydro's staff in that they would have a manager of community relations for the Aboriginal relations division. Would most large companies in Manitoba have a department specifically for that reason?
Mr. Monkman: Not that I know of, but there may be some. Our president and our VPs made the Aboriginal relations division happen. It is a division within our company. It is a business unit. If other large business or companies would do that, you would start building things in place that would take away the barriers, take away all the issues that make it difficult for Aboriginal people to move into the workforce. Our company has made a commitment to spend money to train them. Other companies need to do the same thing.
Senator Hubley: That type of corporate conscience should almost be a culture here. Every company should have that sensitivity to the population. I expected a totally different answer. I thought you would say that yes, this is something that we are seeing more and more of in large companies. Yes, it is something that most large companies have already had identified as a resource and has to address, so I am a little bit surprised.
Mr. Monkman: I think some companies have definitely made an effort to increase their hiring and their practices as to how they treat Aboriginal people in the employment world. However, from a personal point of view, I think we have to go a lot further, you know, within the province.
Senator Hubley: Under corporate responsibility?
Mr. Monkman: Sure, under anything that we do, no matter what it is, corporate or not. It should apply to small businesses. I have a small business and I hire Aboriginals because that is what I want to do. It has to be a personal thing as well.
The Chairman: I should not use the word guilt on the part of Manitoba Hydro. I was there in the 1960s with the disruption that took place in the traditional lives of the Aboriginal peoples. Maybe this is why Manitoba Hydro has taken such a lead role in trying to facilitate and make up for errors of the past.
Senator Lovelace Nicholas: In your presentation, you said that the First Nations population is increasing rapidly. Could you give us the reasons why there are still gaps in income and unemployment? Does this increase include First Nations from small communities?
Mr. Morrisseau: Yes, that is province-wide data and there are many reasons why the population is increasing.
Other senators asked what the private sector is doing to reach out to the Aboriginal community. There is the Aboriginal Human Resource Development Council of Canada with the head office in Saskatoon. Kelly Lindsay is the President of that council. You are aware of what they have done in the past. I was on that committee when Manitoba was invited to participate along with Saskatchewan. In the early days, I struggled with the idea of what the council was trying to achieve. Once I understood that, I tried to apply it to Manitoba and bring it to Manitoba. I cold called the Business Council of Manitoba, which is made up of the 30 or 40 biggest companies in Manitoba, and asked whether they would be interested in providing office space for an individual who could work with their members to develop Aboriginal specific HR strategies. The idea was that we would broker a deal with a number of sources. Kelly was one of the sources as well as the provincial Department of Education. We cost-shared and got a budget together for an individual and operating and that kind of stuff. The idea was that I could have easily put that person in my own office or in my area and said go and work.
I do not know about other places, but in Manitoba, the business community has a particular way of doing business. They like to do business on their own and do it in the way that suits them. I thought if we put that resource there, it would work. As it turned out, they said they liked the idea but they did not feel that they were the organization to host that. They also had Mr. Carr and Mr. Carr is still working for them. They have an ongoing working relationship with the Winnipeg Chamber of Commerce. Mr. Carr said I should talk with Dave Angus and see whether they would do it. I did and the program is operated out of that. That was six years ago. I know that the individual that they hired who went out to talk to businesses to try to encourage them to have very specific Aboriginally charged strategies, they were not calling her so much for that as opposed to asking for very basic information on the Aboriginal community, information that I just, because I work in it, I guess I am just so surprised that they do not know this. That was the kind of information that the business community was asking of her.
You may find that at odds with my earlier statement about the private sector becoming much more attuned to the Aboriginal question. I still believe that. I still believe that in the ensuing five years, the private sector in this province has woken up to the Aboriginal issue and more and more, they are looking to that community for its workers. You know, IBM is a leading international company known for its work in diversity and diversity is the name of the game in the world today. The more diversified you are in your workforce, the better it affects your bottom line. Where you have people from different backgrounds trying to solve an issue and invariably you come up with a better answer when you have a number of inputs that way. I know we signed an agreement with them. IBM is a private sector company and the company is doing all kinds of things in the Aboriginal community from literacy work in very specific communities, I believe Sioux Valley and Sandy Bay. IBM wants to do a literacy and education program in Moar Lake with the long- range goal of doing business with the Aboriginal community. It is a multi-pronged kind of an approach. There are similar private sector companies doing work in that area.
We have multiple interests in the Aboriginal community. Education is key for us but we have an education in training. We have two departments that deal with educational training. We participate from the policy point of view and we try to promote the idea that the private and public sector sectors have Aboriginal specific HR strategies.
The Winnipeg Regional Health Authority has a bigger workforce than the Province of Manitoba and that is something for the Aboriginal people. We signed an agreement with them three years ago and now we are starting to see the results. They are hiring more and more Aboriginal people. They have an Aboriginal unit set up specifically to work with all the hospitals in the City of Winnipeg, to help them revise their HR strategies to be more Aboriginal friendly. We signed similar agreements with the majority of the regional health authorities in Manitoba. We are getting various results depending on the location. The RHA in Brandon has a wonderful model where in addition to developing a written strategy that they are trying to follow, a very large advisory body. Some of the Aboriginal communities advise them on their strategy and so on. We are in the beginning stages, if you will, but we are very optimistic.
Senator Peterson: This is more of an observation than a question. We had the MKO group in here this morning. They covered a considerable part of the northern part of the province. Their take on the situation was quite a bit different than what you gentlemen have told us this afternoon. They said that there is no consultation, very few jobs, no revenue sharing, that sort of thing. In view of what you have told me this afternoon, you are at odds. I think we should all try to get on the same page or closer. That is just a suggestion.
The Chairman: Thank you, Mr. Morrisseau and Mr. Monkman, for coming today. We appreciate your straightforwardness and your integrity that you brought to the table. Please continue the work you are doing; there is a lot more to be done. There are many challenges ahead of you. Manitoba is one of the biggest challenges that we have. It ranks right up there anyway so hopefully we can make some progress here and hopefully our report may assist in resolving some of these economic development problems that exist within our Aboriginal communities.
Senators, our next panel of witnesses includes representatives of the Tribal Councils Investment Group of Manitoba, the Southeast Community Futures Development Corporation, and the Tribal Wi-Chi-Way-Win Capital Corporation.
Robert Campbell, Director of Business Development and Public Relations, Tribal Councils Investment Group of Manitoba Ltd.: Thank you so much for this opportunity. I am the Director of Business Development and Public Relations for Tribal Councils Investment Group in Manitoba. I am also the National chair of the Council for the Advancement of Native Development Officers and have an extensive background in Aboriginal community and economic development.
I would like to start by thanking the Standing Senate Committee on Aboriginal Peoples for inviting Tribal Councils Investment Group of Manitoba to make a presentation to you on economic and business development. In particular, I would like to extend our sincere appreciation to the Senate for selecting this fine hotel for its forum as it is owned and operated by First Canadian Hotels and Entertainment, a subsidiary of our company TCIG. This is an excellent four- star 272 room hotel with 13,000 square feet of conference space and, more importantly, for this panel, a First Nation- owned hotel.
Given the time allotted for this presentation, it is very difficult for a company of our stature to provide the detail and commentary required for a subject of this magnitude. I will attempt to give you a brief overview of who we are and will try to focus in on a couple of key areas in which the federal government could enhance its role in Aboriginal business. Although we are virtually unknown in many parts of the land, we have always felt that before we could go out and talk about our achievements and successes, we must first be proven and tested. I believe that we have passed that milestone and are in a confident position to tell the world a little bit about ourselves.
I want to tell you about a vision that became a reality and a reality that is fast becoming a legacy in Aboriginal business. This is our story. From our humble beginnings 15 years ago we have, through hard work, dedication and determination, built one of the most successful First Nations enterprises in the country. We are a benchmark for success in any business environment, Aboriginal or not, and we are proud and honoured to stand in that circle, the circle with so many other role models for the Aboriginal and First Nation community in this regard.
I want to take you down a path that is seen through the unity and resolve of seven tribal councils, our shareholders, a plethora of business growth and a diverse family of companies that has made us one of the top performing companies in Manitoba. In fact, we are in the top 100 companies representing the top 1 per cent of all Manitoba companies and the first and only First Nations company to join these high performing ranks.
From our humble beginnings with an investment of $175,000 from our seven shareholders, meaning $25,000 each, we are now major players in the mainstream economy. We are ISO certified in our corporate office and many of our subsidiary companies and have been asked to be considered to be recognized as one of the best managed companies in Canada. Through the strength of our people, we create synergy and by doing so we get a magical formula where one plus one equals five. Synergy is when our success becomes the success of all of our people. Like the wolf pack working together, unified and strategic, there is no game too large for us to bring down.
This is how we have been able to generate 44 per cent annual return to our shareholders over the past 15 years; a feat unequalled, to our knowledge, by any mainstream competitor and this number continues to grow. I am sure your first question after the presentation will be how do I invest in your company?
I should point out that we are allowed our success by having a strong board with vision and an ability to focus on our mandate, business and wealth creation. We know that business is its own culture and one that we must realize and embrace. Coupled with this is the critical component of having a champion who can hold the course through any storm, who has complete command and the wisdom to get us to our destination. You must have a leader with acumen, knowledge and instinct to drive you forward. In our case, that is Mr. Allan McLeod, our President and CEO, a remarkable young Aboriginal person whose expertise is evident in all that TCIG accomplishes.
Now this panel is here to listen to some of the lessons we have learned and to take some of our recommendations under consideration. I think it is important to point out that both the Aboriginal community and the subject of economic development has been studied, restudied and studied again yet we seem to be advancing at a much lesser rate than the mainstream. It would seem that one of the best economic opportunities available is to study the economic condition of Aboriginal people and pontificate about what we could be. I believe the time for study must come to an end and we must act and take educated risks and really make some inroads into seeing our people self-sufficient and self-reliant and whatever other buzz words are being used in Ottawa today. I prefer to think of our self-reliance as just being part of the fabric of Canadian society, being healthy and having equal opportunity for our families and future generations.
Our company is one example or model of how the Aboriginal community can effect change with an economic perspective, how we can become true players in the mainstream economy, how we can provide the business foundation that will create employment, support programs and services and contribute to our well-being. This is our economic approach to nation building and a demonstration of our people's ability to compete and become leaders in any walk of life if given the tools and opportunity.
For TCIG, our world began when we were given the direction and mandate to go out into the mainstream economy, a place that many Aboriginal business initiatives had not set foot in, and a place that our leaders knew we must become participants of if we are truly going to make a difference. We knew that for too long, we had been customers and consumers, not owners. We had made many non-Aboriginal businesses very comfortable with no return to our people. We knew that we were a huge economic sector unto ourselves yet leaking out all of our economic resources and not capturing them in any way. How do you grow an economy if you give everything away?
I have provided some annual reports to the panel so they can follow along, but in brief, we are the owners and operators of many diverse companies or we are one of the principle shareholders to a host of other companies all generating a return to our people providing much needed financial resources to support our future.
We first acquired a small Pepsi franchise — which I would like to point out is the Pepsi that is sitting in front of you folks today — in Northern Manitoba and built it into one of the premier Pepsi organizations in existence today, serving 20 per cent of the land mass to Canada and outselling the red can at seven to one and having been recognized many times by Pepsi as one of their top producers in North America. We are tested regularly in our office for Coke use. I must point that out as well.
From that success, we moved into First Canadian Health. We process the non-insured health benefit claims for virtually every Status Indian in Canada and have for over eight years. This makes us one of the largest federal contractors in Canada, processing close to $500,000 million in claims annually in an effective and efficient manner while providing advice to Health Canada on their system. Often though, this falls on deaf ears. I will cite one example where we identified savings in the hundreds of millions of dollars regarding prescription drugs that seemed uninteresting to the government. How many businesses could have been supported by those dollars? We currently do this contract under the Aboriginal procurement policies mandatory set-aside program, and I will come back to this later in my presentation.
More recently, we created a new company with Blue Cross, Medi-Health Solutions and are about to embark on a whole new line of business that will yield significant returns to both partners for years to come.
From this foundation, we moved into First Canadian Fuels where we provide fuel and dealership to First Nation and Aboriginal environments across Manitoba and ultimately across Canada.
We have First Canadian Hotels and Entertainment, which I stated we are in today, the beautiful Radisson hotel downtown. Since our ownership, we have won the Radisson's International President's award and have only just begun to improve this property to make it one of the number one hotels in Winnipeg and Manitoba. We have taken our occupancy from 55 per cent to over 90 per cent and continue to grow those numbers, and we have owned this hotel for only a year.
We are a major shareholder of Perimeter Aviation, the largest regional carrier in the province servicing Manitoba, part of Nunavut and beyond. We have acquired several airlines under our banner and since our involvement, have seen sales grow from $20 million to over $80 million a year. This company publicly trades through the Exchange Industrial Income Fund and along with Jasper Tank and other acquisitions, we have created an opportunity for many to invest and become part of our success.
Recently we developed First Canadian Water, an infrastructure with CH2M Hill, a world leader, to address critical infrastructure needs for our people that will have a direct impact on health while providing a conscientious contractor who will work with our people to help solve some of our greatest challenges.
TCIG is proud to be the second largest shareholder of Beaver Securities, a full service brokerage, and the only First Nations company in Canada to become an owner of a full-service brokerage to help plan a secure future for our people. We know the importance of trucking, and this is what has lead us to become a critical part of Big Freight trucking systems running trucks from Alaska to Mexico and everywhere in between. We are heavily involved in Westfield Real Estate Investment Trust where we now own over $500 million worth of property from Alberta to Manitoba, taking advantage of the booming market and ensuring that First Nations are actively involved in this opportunity. I encourage you to drop into the Johnston Terminal at The Forks or the Grain Commission building downtown to see some of our assets.
Through Rupertsland Holdings, we have mobilized the economic resources of the First Nations of Saskatchewan, the Northwest Territories and the Yukon. We created an investment pool that became one of the largest single shareholders of the North West Company, generating a 500 per cent return on our investment and demonstrating that we, through unity, can become a major investor on any deal. In the near future, we will be promoting a new venture, a junior capital pool, to go out and take on a giant institution in Canada, so keep your eyes and ears open.
We are pleased to be an investor in True North, the arena here in Winnipeg and the Manitoba Moose hockey club. Our arena is now one of the busiest in North America and a celebrated facility in Winnipeg. We were on the ground floor of the First Nations bank and recognized the importance of having our own financial institutions to help us grow our business.
Finally, we are now owners with Paragon Pharmacies, which operate 20 stores in B.C. and Alberta, and we see this business growing in niche markets throughout Saskatchewan and Manitoba in years to come. TCIG also has a foundation that supports culture, youth and entrepreneurship and we continue to celebrate Aboriginal business success in Manitoba and host conferences and galas to showcase our community and its potential.
I know that took a bit of time to tell you who we are but that is how long it takes these days for us to say hello. Our dreams have become reality and our reality will become our legacy. We realize that we could never give you the full story or a proper rendition of our venture nor is that our purpose here today. I encourage this panel to meet with us and find out who we are. I believe we have a lot to contribute to your efforts and would welcome further dialog.
With my remaining time, I can only give you a few of our suggestions to improve the conditions for Aboriginal business. I can go on at length to tell you about the gap that exists between our world and society and the need to create local and regional economies. There are funding challenges and a lack of proper economic resources. There is need for greater vision by various government departments and agencies tasked with supporting our Aboriginal endeavours. I can go on about how we as a people will never bridge the disparity between society and us without being in the economy. I could go on about how funding is wasted and how decisions are often made by people without skills or knowledge to do so. My list goes on and on. These findings in a sea of reports and research exist already. There is no need for me to point out what most of you already know. We can go on at great length with a mountain of recommendations to business, governments, agencies, media and our people that would improve our role in the economy, but I want to take advantage of this time to tell you there are a couple of items that the federal government can focus on to support our unified cause.
I want to focus on the federal government because this panel and the Senate as a whole can have a direct result on influencing change and conditions within the government and that is what we need. That is how you can help us.
For the past decade, there has been a procurement policy in place to assist Aboriginal business to become directly involved in the buying of goods and services by the federal government. This policy spans all departments and is coordinated by Indian and Northern Affairs. It mirrors the legislation that exists in the United States to support both minority and Indian businesses and has become a dramatic influence in creating, sustaining, growing and empowering people and enterprise.
Canada has had some reservation, no pun intended, on putting real teeth into its policy and ensuring that it is adhered to and embraced by all departments. To date, the government has not met its goals in this regard nor has made a true effort to see this in effect. The federal government created a mandatory policy regarding procurement where the beneficiaries of the goods or services purchased are 80 per cent or more Aboriginal. This contract must be given first priority to Aboriginal business. This mandatory policy is being corrupted as we sit here today.
As an example, our company, First Canadian Health which I spoke about earlier, is faced with a situation whereby the new contract for non-insured health benefits, which is exclusively for Aboriginal beneficiaries, is not being enforced. In fact, it is being excluded even though it meets all conditions for mandatory set-aside in the Aboriginal procurement policies.
Without any rationale or basis, at the discretion of the bureaucracy, the federal government has abandoned its mandate, its policy and its commitment to Aboriginal business. We have been an excellent provider and many other Aboriginal firms would also like to be a bidder on this procurement opportunity, but the government in its wisdom seems set on taking this outside and creating an uneven playing field. It would seem that when policy and programs are created for our benefit and our people start to excel within them, they are taken away.
I recently attended a forum on this very subject where Aboriginal firms from across Canada made strenuous objections to change of any type in the Aboriginal procurement policy and yet seems to fall on deaf ears. The government proclaims that it has new ideas regarding our participation in the procurement environment without our input, without consultation and without our knowledge. The American model, a legislated commitment, works and has provided untold benefit to many and has been the encouragement for mainstream companies to become aware and partner to share the success. Canada hides behind a weak approach called ``policy'' which apparently they can change in mid-stride without consideration of whom it affect's.
Do not reinvent the wheel. Make the existing policies stronger. Make sure it is in effect. Let us be part of future direction. Strive for legislation in this regard, let us share. Through procurement, the federal government, without new financial resources, can have a major and positive impact on our economic well-being.
Please, we beg you, when you return to Ottawa, ensure that you make the Aboriginal procurement policy a priority for government. Keep it in effect. Enforce the mandatory component. Let us help ourselves.
With regard to business funding provided by government, about 6 per cent of the Aboriginal budget goes in this direction. I have already stated the simple fact that our people will continue to toil in our current reality if we are not represented in the economy, if we continue to leak out our economic resources, if we do not establish our economy, if we do not create jobs and wealth at the local level. More of the existing funding must be directed towards entrepreneurial efforts. More must be available to see us in business. Economic development requires a bigger piece of the pie. After years of heavy social investment, where are we? Teach a person to fish and he will eat forever. I think we all know the story. It has been a reality since the beginning of time; make it a reality for the federal government.
On that note, we and many others continue to grow and prosper. It seems unreasonable that our efforts cannot be rewarded or supported within the current funding programs. We are taking big strides and need support to do so. TCIG is a company that does not rely on government funding and there is virtually none available to us even if we wanted it. We see the enormous investment by governments in big business players; make an investment in others or us. Give us access to significant funds. We will give you measurable results. We will take those funds to new heights, a place that we will have lasting and dramatic effects on our people. I encourage you to see a program created for those larger Aboriginal businesses like us that are secure and tested. Give us access to the kinds of funds that will transport us to become big business like the ones we see receiving hundreds of millions of dollars. We know how important Bombardier is. Many of us rely on snowmobiles and airplanes. Give us the same chance.
In my final recommendation, look to new and creative funding mechanisms where it applies to infrastructure. We all know the demand for housing, water treatment, roads and the list goes on. There are opportunities for public, private partnerships. We have seen examples outside of our world time and time again. The time is now for the federal government to get creative with the private sector and come up with solutions. If something is going to be financed, but the need is today, let us look at a way to create. Allow private investment into that infrastructure with long-term financing backed by the federal government.
I have seen many needed projects waylaid for years and by the time the project finds its way on to the federal funding radar screen, it costs 10 times the original value. Find a way to do something about it in today's dollars using someone else's financing. Know you will be buying it eventually. I hope you can see it in your wisdom to go and make an attempt to get the federal government to explore this within the Aboriginal community.
I know I have taken my share of time and I thank you for listening to TCIG this afternoon. I would welcome any questions and any further opportunity given more time to discuss these thoughts or any other matters pertaining to Aboriginal economic development. You are doing something very important and we appreciate your efforts. Please make this an action-oriented process and not the lip service that so many of us have seen through these many years. Our recommendations do not require new money. We are not asking for new money. There are creative and innovative ways to deal with traditional funding levels and make them more effective for us. That is Tribal Councils Investment Groups' presentation to you.
Carol Johnston, Director, Southeast Community Futures Development Corporation: Our economic development division consists of three programs. Southeast Community Futures Development Corporation is a program funded by Western Economic Diversification, Southeast Training and Employment Program, which is funded through HRSDC. We also deliver the Community Economic Development Program within INAC. A board of directors and a loan committee governs our division. Our board of directors is comprised of a representative from each of the member First Nations we represent which are the nine southeast First Nation communities along the east side of Lake Winnipeg.
Our loan committee consists of five representatives. Two members are representatives from our overall board of directors, one member is a community member, one is a youth and the other is a certified general accountant. Staffing of our corporation consists of me, the director, an executive secretary, financial analyst, loans officer, training and employment coordinator and employment coordinator. All three programs are grassroots-driven with a goal of strengthening our local economy by enabling entrepreneurship, access to training and assisting in community economic development.
The geographic region covered by Southeast is vast to say the least, from the northern point of Poplar River First Nation on the 53rd parallel to the southern point of Buffalo Point on the Canadian-U.S. border. Five of our nine communities are accessible by air only and by winter road during three months of the year. The region falls primarily within the Canadian Shield and is thus characterized by rock, trees and water.
Population of our First Nation communities has grown dramatically in the past five years. Our current total on and off reserve population is just over 10,000. Economic activity in our region consists of natural resources, forestry, fishing, trapping, tourism, gaming, manufacturing and retail service industry. Labour activity, labour force activity totals 49.16 per cent compared to 67.3 per cent for the provincial rate. The participation rate among both male and female segments of the working-age population of these communities were substantially below provincial participation rates. Low levels of participation are largely attributable to shortage of employment opportunities available to community residents. The major employer within our communities is the First Nations themselves, the governing centres, the band offices.
Some of the challenges and weaknesses that we encounter in delivering our program include the distance between communities and the lack of all-weather roads to five of our northern communities. High transportation costs for conducting business in all three programs especially costs associated in establishing and supporting new and existing business initiatives are a problem. We have problems with the training levels of members of the community and a lack of cooperation by provincial governments or First Nations. Access to capital is a problem as is access to existing programming with respect to meeting criteria. We have problems with the time involved in getting projects approved, which, in the end, in many cases jeopardizes the project with respect to it implementation.
I am a member of the Manitoba Economic Development Advisory Committee for Manitoba. Our project review committee has been downsized over the past five years and one of our major problems is that any project over $100,000 has to go to Ottawa for approval. The time involved in getting those projects approved at headquarters level jeopardizes our projects. In the end, we end up with dollars that we have to try to push out the door because they could not meet timelines required for that program given the time frame that you have to spend the dollars within that fiscal year.
The Chairman: Are you set up in the community?
Ms. Johnston: No.
The Chairman: How is your organization formed?
Ms. Johnston: We form the Economic Development Division of Southeast Resource Development Council which assists the nine First Nations along the east side of Lake Winnipeg. We are physically located in Winnipeg and we have five northern fly-in locations.
The Chairman: I am just trying to make sure that I know who you represent.
Ms. Johnston: The future will continue to pose challenges for communities given the current structure of population. The working age population of our communities is expected to grow dramatically over the course of the next 15 years. Significant levels of job creation and training will be required to realize and improve prospects for these new entrants to the labour force age group.
One of the strengths is our staff, our affiliated organization, Southeast Resource Development Council and our committed volunteer board members. We are communities working together since 1978. We work in a positive political environment to effect change for Aboriginal communities.
I gathered these recommendations out of a number of reports and evaluations that have been conducted on Aboriginal economic development programming over the past number of years. I can make reference, and I think I mentioned it to someone, that there is a report that was done by AMC, MKO, FAO, and INAC with respect to economic development in Manitoba. There was a gap analysis that was done and there are recommendations attached to that report.
There was also an evaluation that was done three years ago on INAC economic development programming. We brought in all of the 62 First Nations economic development officers and we were here in the Radisson for three days doing an evaluation on those programs. A number of excellent recommendations came out of that evaluation; however, when the new programming came in, they were not implemented.
Some of the recommendations included increased First Nation specific economic development funding; increased access to private capital; better coordination for human resource development; strengthened procurement policies; reviewing and implementing existing reports and economic development programming.
Crystal Laborero, Project Manager, Tribal Wi-Chi-Way-Win Capital Corporation: As you know, I am a manager over at Tribal Wi-Chi-Way-Win Capital Corporation. When I walked in earlier this afternoon, Mr. Morrisseau was telling you about a project with the Business Council of Manitoba as well as the Chamber of Commerce and he was referring to me. That was my previous role. The reason I mentioned that is because I have had a number of years of experience working with the business community. Some of the things that I am saying here today may not directly be experiences to Tribal Wi-Chi-Way-Win but personal experiences working in the community.
Tribal Wi-Chi-Way-Win is a lending institution that provides resources for First Nation entrepreneurs. It has been in existence since 1993 and it started way back when with three staff members. At this time, we were set up to provide commercial lending. What has happened is the Tribal Wi-Chi-Way-Win was created through the efforts of five Manitoban tribal councils and a number of independent First Nations. The key objectives are to provide financing for the establishment, expansion and diversification of Aboriginal businesses, improve access to capital to entrepreneurs and create opportunities for business development through education and information sharing. I will talk more about that because that is a very big issue as it relates to Aboriginal entrepreneurs, to promote growth and development through our advisory services.
Our core business is commercial lending. We have expanded that to a farm loan program. We have a number of Aboriginal farmers in Manitoba and we provide services to them. We also have a youth loan portfolio where we try to engage young people and encourage them along the streams of entrepreneurship as well. Advisory services are a new portion of our business. What we offer there is a business services officer, a youth businesses officer, a First Nations farm adviser as well as a northern Manitoba representative. We created the new position of the business services officer two years ago because we are a developmental lender.
Our interest rates are high, I am not going to lie about that, but the reason that they are high is because we do not get any kind of operational funding and we are also a lender of last resort. We have wonderful people that come in with passion and commitment as entrepreneurial spirited people and unfortunately, we find that these individuals lack the managerial skills required to carry out their dreams. We spend a lot of time trying to help people to get to a place where they can actually engage in their projects. We decided that it was becoming such an onerous task that we had to engage a business services officer. We secured funding for this position but we have to reapply annual. We have come to realize we have to create our clients.
All of a sudden we are seeing the same thing within the youth area and the youth services. Our lender does a number of presentations out in the communities to talk about the opportunities in terms of youth.
Tribal Wi-Chi-Way-Win realized quite quickly that in order to be sustainable, we needed to diversify our business and we have done a couple of things in order to do that. Outside of our $8 million lending portfolio, we also have a subset company partnership with the Canada Student Loan Program. We have a major partner out of Toronto. We are the only Aboriginal call centre in Manitoba. We actually might even be the only one in Canada now, so that is very significant because we have partnered with this large organization. I have to tell you that the only reason I think we are in that game is because we are very proactive but the other part is because of the procurement in the set-aside.
I wanted to echo the comments of my colleagues. The procurement policies were very important because they kicked open the door and we put our foot in the door, slipped our whole body in, and are now in a very long-term relationship with this company. It would not have happened if the procurement policy were not in place.
As of October 1, we are buying out a small financial services company and really looking at trying to provide some financial services because we are finding the traditional banking system does not work for our communities. We have a number of repeat customers. I told you our interest rates are high because we are a developmental lender and we actually build these people to a place where they have lots of equity in their companies. The people are eventually ready to go to a traditional banking system and borrow money, but because they have a relationship with us, we are Aboriginal people dealing with Aboriginals, we know their situations, we know their communities, we know their clientele, they feel very comfortable working with us. We think it is important to carry that same type of relationship and start looking at it more of a personal level.
We are a community-based organization that really cares about making a difference in the community. I am embarrassed to say that we have to charge 13 per cent for a loan because people make no-equity loans. We need to be a sustainable business. We are criticized as members of the Aboriginal community from the masses that think we get funding for this and that. That is not the case. I think when you really look at the true numbers; you will see that is not the case.
Ninety-five per cent of our board and 95 per cent of our staff are Aboriginal. We employ 22 people. Our average age is 33 years and 50 per cent of our staff is in the life learning education process. We encourage all of our staff to pursue some type of education and training because we realize that these employees may not stay with us. We realize that we are building individuals who are going to contribute to the economy and our community. That is important in the whole scheme of economic development.
We have taken a stance of trying to position ourselves as an employer of choice within the Aboriginal community. We really want to make a difference. In terms of all of the types of businesses that we are going into, that is going to be more important as we move forward.
In the past three years, we have given out 15 educational scholarships to students attending post-secondary institutions. We are a growing organization so much so that we have run out of space. I am sitting in the boardroom. We had to take out the boardroom table so they could create some space for my office.
I think one of the biggest reasons why we have become successful as an organization is because we really feel that our human resources are our number one asset. We have been successful because we have also tried very diligently to separate the politics from the business. I do not know how else to explain that but to say that.
Some of the challenges and opportunities are of course the high interest rates. Our people pay the price for these interest rates. New entrepreneurs pay the high interest rates because of the lack of operational dollars. Our farming clients are having huge difficulties accessing provincial programs because there is still the blurred line around jurisdictional issues. We have individuals that are caught between First Nations federal policies and provincial farm programs. We try to advocate on behalf of our farmers and provide a lot of education awareness on what is happening in that industry.
Advisory services have become a vital part of our business due to the lack of business awareness for our clients. I just cannot emphasize that I would like to see that become a mandatory part of new business financing. I have horror stories of clients coming with a shoe box with all of their receipts and my lender sits there and helps them work through the process. That does not mean they are not committed and passionate about making a difference in running this business, but there are areas in which their understanding of the business is lacking.
We would like to recommend an incentive program that would encourage entrepreneurs, when they are starting out, to pursue training and education in this area. That would help them down the road. That would help all of those start- up lenders and help create more opportunities for Aboriginal entrepreneurs.
I think one of the other challenges or opportunities is the geographic location of our customers. We provide services to all First Nations people across this province. Of course, that has an effect again on operation budgets. The other thing is that we are starting to see a huge increase in urban populations. We all know the migration to urban communities is increasing and our clients find themselves faced with the traditional banking system. They are bumped, bruised, and shut down and it is not working so they come back to us. It becomes complex I think in terms of the competition is a lot higher for our urban client.
I just wanted to again emphasize the idea around the procurement policy. If that could be looked at, that would definitely be a very important piece.
Last, what I want to leave you with is that it is really important to consult Aboriginal people. We have come from a history of everybody making decisions for us and saying here you go, this is what we decided is going to work for you as a people. We know that if you are going to look at any kind of community or economic development, you need leaders, Aboriginal leaders to be a part of that process.
I would like to say thank you for your time and I would be very interested to see the document. This is the third Senate committee I have been involved with and I have to say that I have been disappointed in the last two because I did not see the actions that were recommended.
Senator Peterson: Crystal, I do not think you have to apologize for 13 per cent lending rates. Mezzanine financing interest rates for real estate projects are 16 per cent to 18 per cent and can be as high as 20 per cent. Do not apologize for that considering your risk area.
Mr. Campbell, in your group, do you lend to bands of your shareholders?
Mr. Campbell: No, we are not a lender; we are an investor. We represent the seven tribal councils that ultimately have 55 bands and over 100,000 First Nations members as part of their make-up.
Senator Peterson: Do you dividend out your profits every year?
Mr. Campbell: Absolutely we do, at 44 per cent annually and we have for 15 years.
Senator Peterson: Excellent. There should be corporations like yours. It should be earmarked for economic development. As it goes down to the bands, it should be set aside.
Mr. Campbell: Our goal is to ultimately be able to replace any funding that is received in that regard and that we will self-fund ourselves.
Senator Peterson: Excellent, thank you.
The Chairman: Do you cover the entire province of Manitoba?
Mr. Campbell: We cover the seven tribal councils, the entire province of Manitoba. Bear in mind that there are 64 First Nations in the province, only 55 of them fall under tribal councils themselves, so there are some independent bands. Those are not bands that are part of our system, including my home community of Norway House and the home community of the president of our company, Allan McLeod, who is from Cross Lake.
The Chairman: Ms. Johnston, is there a board of directors for Southeast Community Futures Development Corporation within your region?
Ms. Johnston: We are one of 16 Southeast Community Futures Development Corporations in Manitoba. The region we service is the nine First Nations associated with the tribal council. They were the group that accessed the program way back in 1985. Our overall governing board also governs the training, employment, and INAC economic development programming. It is the easiest and least expensive way to do it because we share all expenses within our program.
The Chairman: Have you been able to fund any young or old business people to help them to get going?
Ms. Johnston: We have funded entrepreneurs of all ages. We started out as a free-standing business in 1985. We did lead corporation to free-standing bids and have been renamed and brought under various programs. We have three loan fund programs, regular loan fund program, we have entrepreneurs with disability program, and we have a youth loan fund program. We began with $975,000 to loan to all of our nine First Nation communities. We have funded approximately 210 businesses since our inception. We have turned that money into a portfolio of approximately $4.1 million.
The Chairman: Good for you. There are no other questions so I would like to thank all of you for making your presentation.
Senators, we have one more individual from the Aboriginal Council of Winnipeg who would like to make a brief presentation.
I want to thank you again Mr. Campbell for your leadership. I am familiar with your organization through Chief Robert Daniels and I think you people are doing a great job. I concur with Senator Peterson that you are showing real leadership and keep up the good work. We will not drink anything out of the red can. Ms. Johnston, you have your work challenges before you. Ms. Laborero, never apologize for 13 per cent.
Larry Wucherer, President, Aboriginal Council of Winnipeg: I want to say a few words after hearing your presentations throughout the day. I think I had a similar day hearing all the different words and ideas and interesting projects.
The Kelowna Accord was a terrible accord. Plain and simple, it was terrible. It was a specific-based approach that favoured the Assembly of First Nations, the Metis National Council and the Inuit Tapirisat Kanatami group. That agreement ignored urban Aboriginal people. I will not speak for Aboriginal women. I can assure you that we have an excellent relationship with the Native Women's Association of Canada and the Mother of Red Nations, the provincial affiliate here in Manitoba. Both of these groups were extremely disappointed with the Kelowna Accord.
During many of today's presentations, you heard about the pan-Aboriginal approach. To be very blunt, I do not know what that means when they say that. I have asked what does that mean, pan-Aboriginal. As far as I know, and I am sure you know as well, the Constitution acknowledges the rights of First Nations, Metis, Inuit, and Aboriginal peoples of Canada. The Constitution does not recognize the Assembly of First Nations; it does not recognize the Metis National Council or the Inuit group.
I raise that point because the message I want to leave with you this afternoon is when you are talking about programming, you must understand that Aboriginal economic development is the light in our tunnel, is our light to get out of our situation. But how do we get out of that? I think Senator Peterson and a few others, and even Ms. Laborero raised it that there has to be a way to separate the politics from actual service delivery and the actual helping of Aboriginal people.
We have to understand how to separate the politics from the actual helping of people on the floor. Through our political group, the Aboriginal council, we represent urban Aboriginal people. And AMC did their presentation, I heard them, MMF. Well I can tell you; these groups had nothing to do with the development of Winnipeg's urban Aboriginal community. There is 100 strong status blind, as we like to call them. We help any Aboriginal person. We do not distinguish; we do not specify what kind of Native person or Aboriginal, we help them.
These groups, they are using the stats from Winnipeg, well, I find that a little disingenuous, because it is the service providers, it is our group that has been doing all the grunt work, all the legwork for years in Winnipeg.
Now when we talk about the procurement business opportunities, I think I myself had meetings with the presidents of the Chamber of Commerce, Winnipeg Chamber of Commerce, the Manitoba Chamber of Commerce about business. How do we get more Aboriginal people in the business? For them, and I agree, their views are one of the avenues, one of the opportunities of procurement strategy on the federal and provincial sides.
Some of the things that are not being mentioned here and you have heard some challenges and some of the recommendations but one of the things that we have to talk about is the processes for obtaining procurement, the bonding requirements, and the financial commitments that have to be made to secure these things.
I disagree with something Joe Morrisseau said earlier. I do think there is an appetite with the non-Aboriginal business community to work with the Aboriginal community but they do not know how. When I was talking to the Chambers of Commerce, one of the things we came up with is how can we get sort of like procurement officers, like people and get the government to look at some sort of set-aside programs to actually access procurement contracts but how do we do that in a partnership kind of model? I am extremely impressed by the willingness of the non-Aboriginal community to come to wanting to work with us.
One avenue I think that is not being spoken about and I think Mr. Morrisseau mentioned misery, and I say our people are an industry of misery. We are the biggest budget lines in the provincial and federal governments. Our socioeconomic plight is well-known. What I am getting at with this is there are the hundred odd non-status and status blind groups in Winnipeg. I have talked to them. I have had meetings with them. There is the Native Women's Transition Centre, which is a shelter for abused women. If that centre had a journeyman cook, they would teach the women how to be cooks and how to do catering. The youth would like to learn how to do T-shirts. There are many small crafts. I guess you have been seeing this; there is just a whole broad spectrum of businesses that could be tackled in our community.
What I am suggesting to you is that there is a whole infrastructure that Winnipeg has already and this infrastructure wants and acknowledges the need to go into economic development but there are no resources, there is no support, there is no out-of-the-box thinking to tackle this issue. I think that the biggest asset is the amount of work we have already completed. I agree with Robert Campbell. The things I am talking about are not about new money, it is about realigning the money and focusing it on grassroots solutions that come from the grassroots people.
From our perspective, 95 per cent of all federal money goes on reserve. That is urban. We are caught in this constitutional quagmire of, okay, your offers are maybe it is provincial responsibility, or on the federal side, well we have treaty cards and portability of rights and things like that, but how do we acknowledge and find a solution to tackle this issue?
What I want to leave with you are a couple of ideas. In Winnipeg, we have through the part of the Urban Aboriginal Strategy, I do not know if you have heard much about that yet, but in Winnipeg, we have all the political groups there. We have community groups, we have business, and we have the philanthropists, like United Way. This group is able to work together and focus on the issues. What we are focusing there is on families and education. We are looking at developing an economic development strategy.
Just to let you know, in the province here in Manitoba, there are three other groups. All these different groups are working on Aboriginal economic development strategy. We are trying to put forward the idea like why do we not work on one together? Why do we not combine the different areas together and consolidate our resources?
On one of the breaks, I was mentioning things that we could use in our community for the small start-up people are examples from India, like the micro-lending. Those are programs where people can access resources. However, because they do not have the necessary equity or credit ratings, it is about getting the community to sign a joint, I cannot think of the word, but where they are supporting the individual saying yeah, they should get maybe a thousand dollars. We support them; you get 20 people, like family, not just like going around with a petition, but getting family people to support them. These types of initiatives and with the Urban Aboriginal Community through vehicles like UAS, we can begin to start the ball rolling.
One last example is I always say this to youth. The young people, when they want to go out on a Friday night, they have no money in the morning, they are scraping and scrounging for a buck here, a buck there, five bucks there. By the evening, they have enough for a case of beer and a pack of smokes. This they call survivor skills. They think it is a negative skill. In the business world, that is resourceful and successful. I think we have to start educating our young people about the skill sets they have, about the opportunities they have within this workforce and the world.
Meegwech.
The Chairman: Thank you very much, Mr. Wucherer. Your points will be well-taken. We are appreciative of the fact that you were prepared to cooperate with us on the time. If you have anything else that you want to submit to the committee, submit it to the clerk of the committee and we will definitely take it into consideration.
Mr. Wucherer: Thank you very much, senators.
The committee adjourned.