Should First Nations go with socialism or free enterprise?

First Nations on Vancouver Island—and throughout British Columbia—are getting restless. Everywhere there is prosperity, development, construction, high employment, except on their reserves. They want in, but are held back, they say, by the Indian Act and the slowness of land claims and treaty settlement, which combine to prevent access to the natural resources they believe are theirs. Will another generation be lost, their leaders ask, before share in the pie?

The Ahousaht First Nation is considering the challenges and potential benefits of development following the time-honoured communal traditions of her people. The opportunity/challenge comes from Selkirk Metal of Vancouver, which, in the time-honoured custom of the mining fraternity, has acquired the mineral rights to Catface Mountain, which was worked decades and several owners ago, and could hold 155 million tonnes of copper.

Selkirk offers jobs, and depending on the terms of treaty and land claim negotiations, the Ahousaht could be in for royalties as well.

But the Ahousaht, says elected chief Keith Atleo, are leery of both the damage to the environment mining might do and the potential impact on their community life of high-paying industrial jobs for jobs for some members.

Atleo is wary too. “I’m sitting on the fence,” he says. “I have to respect the wishes of the community,” he says, referring to a vote of the community’s assembly authorizing the council to conduct an environmental impact study with Selkirk as well as test drilling to assay the deposit. “But I’m also sitting as an hereditary chief.”And the seven chiefs of the Åhousaht have a special responsibility to protect the nation’s culture.

The Ahousaht have already opened the door to development in the form of 14 fish farms operating with their traditional territory with Mainstream Canada. But the 30 to 90 jobs these provide to Ahousaht members bring in modest pay and are mostly seasonal—both factors minimizing the impact on the community of 900 on Flores Island. The same number live off the reserve, says Atleo, because of a shortage of jobs and housing.

Now the community faces the possibility of some members seeing their earnings jump “from $300 to $3,000. How are they going to act? We are talking with the mining company about educating workers about better life skills, better family skills.”

The Ahousaht, as seemingly isolated as they are, are facing the challenges of being rapidly (but not necessarily permanently) plugged into the global economy. So are bands across Vancouver Island and B.C. and all are struggling for tools and strategies to cope. A first effort has been made by the provincial Ministry of Economic Development in a joint effort with BC Assembly of First Nations, the Union of B.C. Indian Chiefs, and the First Nations Summit. Early this year they produced Journey to Economic Independence, a report on different economic strategies employed by B.C. bands. It was written by Ted Williams, a Cowichan band entrepreneur who went on to get an MBA and work for the Duncan band’s Khowutzan Development Corporation.

Williams’ report found that of 12 bands studied, only one, Westbank, chose to promote individual entrepreneurship. Each of the others chose “to develop First Nations-owned and operate businesses on behalf of its community.” In some cases the elected chief and council operated these enterprises, ranging from tourism to retail to resource extraction, directly. In others, development corporations have been created directly controlled by the council. The report recognizes the problem of interference by band councils in native enterprises and says native leaders do too.

But the measures a few of the bands have taken to address the issue seem meager. The Osoyoos band has a bylaw requiring that the development corporation’s board can be changed only by a majority of the band council (ruling out, presumably, unilateral firings by the chief).

Dr. Robert Bish, professor of public administration at the University of Victoria and author of a report on economic development among Alaska Indian bands, says there is no way band councils should control economic development. “All they know is how to take handouts from the feds and distribute them. Canada’s reserves are little havens of socialism.” Andre Ledressay, an economics instructor at Thompson Rivers University in Kamloops,and the principal of Fiscal Realities, a consulting firm, says individual entrepreneurialship is the key to economic growth. Ledressay says First Nations are eagerly taking up the entrepreneurial model, none more so than those in British Columbia.

“You look at the West Bank band [in Kelowna]. They’ve had phenomenal growth in the past few years because they’ve laid the legal and physical infrastructure to free their entrepreneurs. It is now cheaper and less time consuming to develop on reserve land than off.”

With bands who have not laid the groundwork, Ledressay’s research has shown, “it costs four to six times as much to start a business. There are tons of native entrepreneurs, but they are being held back by the Indian Act.”

The problem with the Indian Act, he says is, “it was never intended to encourage economic growth.” Land is owned communally. Provisions to hive off parcels of land and give them something approaching fee simple status take time. “There is a saying,” says Ledressay,” that there is nothing more nervous than a million dollars.”

Sewage, power, and roads must also be built to service commercial operations. Most bands don’t want to wait for entrepreneurs to wend their way through the band and Indian Affairs approval process, so they start up enterprises themselves.

Ledressay says his words are not falling on deaf ears as bands increasingly seek his advice on how to unleash entrepreneurial spirit.

Stephen Cornell , a professor of public administration at the University of Arizona and a leading American expert on native economic development, says bands councils are likely to see band companies as employment agencies, and disregard the need to make money. “Making job creation the primary goal”,” says Cornell, “turned out to be catastrophically self-defeating,” in band after band.

Even if band councils have the best interests of the business at heart, says Cornell, they ofteoften lack business experience, and “being band councilors or chiefs gives them plenty of other things to worry about.”

Ted Williams is aware of the pitfalls that band politics pose for economic development. The creator of several successful businesses before becoming an investment officer with the Cowichan Band (the province’s biggest) and lately an economic consultant to the provincial government, he says Journey to Economic Independence was not supposed recommend any development approach over another. He is working on a second study that will identify best business practices among First Nations.

Williams doesn’t see bands needing to make a choice between establishing enterprises themselves or encouraging entrepreneurs. “One leads to the other,” he says. “Once the band has created the infrastructure and trained people in band enterprises to be employees, some of those people can go on to be self-employed first, and then business people employing others.”

Williams notes that the West Bank band started 16 years ago getting self-government and laying out its own land-holding legal system as well as its own enterprises. “Now it’s moved from there to supporting entrepreneurs.”

But some band leaders, he admits, “don’t want or like entrepreneurs. They are there. They want to break out. First the communities have to accept they don’t have the right to control people. The backbone of the Canadian economy is the small business. Right now the First Nations don ‘t have an economic backbone.”

Daniels says B.C.’s chiefs are unanimous that the delays in getting DINA approval for land development is a huge impediment to growth. Self-government would seem to be way to solve it, but is not likely to come quickly.

Ernie Elliott, general manager of the Cowichan Band, has worked all his life, as have his five brothers. But most of the band’s 4,000-plus members did not grow up with the culture of work, and have become dependent on social assistance. “I used to be a high school guidance counselor and truant officer. I’d track down kids at home and encourage them to return to school to get jobs. But they’d say, ‘Why work? Our parents don’t work and we get our food provided and our home provided.’” Unemployment on the reserve is at 80 per cent.

Elliott doesn’t thing the conditions are right for entrepreneurs. People lack the training they need to plan a business and those who try often come back to the band again and again for support.

On the other hand, several of the Cowichan Band’s enterprises haven’t fared that well either. The cultural centre was a famous failure that caused the bankruptcies of several off-reserve businesses. “There is still a bad taste about that out there,” says Elliott. A construction company also failed.

The band is forging ahead with other projects, however. It owns and operates the Cherry Point Winery and hopes soon to make a profit. It operates a cabinet works , the revived cultural and conference centre and a forestry services firm. It is joint venturing with London Drugs in shopping centre Along the Island Highway just north of the Cowichan River and is looking at a second joint venture with the Chemainus dinner theatre.

Joint ventures are a way that bands across B.C. are learning to reduce risk and acquire expertise.

When Elliott took over after several band enterprises failed, he reformed the governance of businesses, putting three outside members on each seven-seat board of directors. “And there are no band council members allowed,” he says. The businesses now operate as businesses, says Elliott, and not as employment agencies.

Elliott is aware of the opportunities abounding for band members, but also of the barriers. Many Cowichan members have not emerged from the school system knowing how to work. “They need life skills training first of all.” BE