Three years ago, the business arm of the Lax Kw?alaams First Nation made its cautious foray into China, hoping to find a market for timber harvested from its northwest B.C. woodlands.
While Coast Tsimshian Resources LP ships its high-grade cedar logs to saw mills in Vancouver, the company found there was little domestic demand for its low-grade hemlock and balsam logs.
What was a tiny 1,500- cubic-metre spot sales program in China in late 2008, done through a log broker, has grown to a very significant in-house enterprise, with 2011 volumes in the region of 300,000 cubic metres – and more opportunities in store.
Among Canada?s native peoples these days, China is the buzzword, as their leaders take it upon themselves to forge new and, it is hoped, long-lasting and beneficial relationships abroad.
?In the Canada-Asia policy community, we recognize that both the federal and provincial governments, and even industry groups, have interests in Asia that need to be promoted. But we rarely talk about First Nations,? said Heather Kincaide, a post-graduate research fellow at the Vancouver-based Asia Pacific Foundation of Canada (APF). ?This struck me as a major oversight for many important reasons.
?Perhaps one of the most obvious reasons is that natural resource extraction in Canada plays an important role in the Canada-China economic relationship.? Especially in B.C. and the territories, First Nations rights and interests are increasingly impacting what types of natural resource extraction activities take place and how these natural resources are transported within and out of Canada,? said Kincaide.
In addition, First Nations have economic and cultural interests they want to represent for themselves in China.
?First Nations political organizations are being very proactive and are undertaking some of the same types of activities as provincial and federal governments: trade missions and the development of country-specific trade strategies,? Kincaide said. ?It seemed to me that we are seeing a ?re-emergence? of First Nations in trade relations, and that this could change the landscape of Canada?s trade promotion abroad.?
There has also been much discussion lately that Canada and the provinces need to develop Asia strategies, she said.
?First Nations are not often mentioned in any meaningful way in these discussions. ? In general, Canada-Asia policy makers and commentators don?t think of First Nations as having their own interests that require promotion abroad – and this has to change.?
As China?s involvement in B.C.?s natural resource sector increases, First Nations are taking proactive steps to ensure that their economic, cultural and political interests are not sidelined, said Kincaide.
As if to drive home this point, Assembly of First Nations (AFN) national chief Shawn A-in-chut Atleo led a delegation of chiefs and staff from across Canada on a nine-day trade and diplomatic mission to China in late October.
Coast Tsimshian, the First Nations-owned timber company, was not part of that delegation, but CEO Wayne Drury caught the tail-end of B.C. Premier Christy Clark?s mission to China in November, joining Grand Chief Edward John and other aboriginal and business leaders.
?Our engagement in China happened because we stepped out and built solid relationships with Chinese customers,? recalled Drury.
At a recent award ceremony at which Coast Tsimshian received an award for exporter of the year for northern B.C., its board chair, Garry Reece, said that when the company opened an office in China, ?many thought we were crazy.?
?But we have done it, and the result is we have been able to build a business in the north that is good for the owners, the members of the Lax Kw?alaams Band and for the whole of the northwest,? says Drury.
Since opening that office in 2009, after convincing the Chinese that its hemlock was better than that of Russia, its business there has grown to sales totalling $60 million.
?We have done the same thing with lumber – we have done some custom cutting trials and are looking at ways to expand our business cutting specifically for the Chinese market.?
Lax Kw?alaams is continually looking for opportunities, not only in forestry but in other areas as well, said Drury. China, he adds, also presents an option for access to capital. ?It comes down to any particular project and what the partners can bring to the table – the overall goal is to have projects that are sustainable, environmentally responsible and bring a range of benefits to the partners.?
Kincaide, who completed a master?s in modern Chinese studies and studied in China for a year before joining the APF as a researcher, said some First Nations communities and organizations do not feel that the provincial – and federal – governments adequately recognize First Nations rights and title to land and the natural resources these lands contain.
?Some First Nations are also frustrated with the federal government with respect to the Indian Act and the limitations it places on First Nations to govern their own affairs and participate fully in the economy,? she said. ?For example, AFN national chief Shawn Atleo has called for an end to the Indian Act. The Indian Act limits the ability of First Nations to gain investment financing, most notably because section 89 of the act states that Indian lands may not be seized.
?First Nations are seeking investors – of any national origin – who will work with First Nations communities for mutual benefit despite the many restrictions of the Indian Act.?
The opportunities for collaboration with foreign groups and entities are ?quite numerous,? said Kincaide. ?There is likely to be more diversity in the national origin of investment into Canada?s natural resource sector in the future, so First Nations will be working with investors from around the world,? she said. ?First Nations are also increasingly important players in securing access to natural resources in Canada, so companies and investors will likely see the business case for solid co-operation and partnership with First Nations communities.? ?
Factbox:
?The value of Canadian wood exported to China in May, 2011, exceeded that exported to the United States.
?In the mining sector, Chinese companies are investing in Canadian-owned companies, entering into joint ventures and, in some cases, buying mines outright.
?First Nations in B.C. have been developing increasingly substantial business interests in natural resource industries. In terms of forestry resources, First Nations businesses and communities currently hold the equivalent of 12 million cubic metres of timber, up from two million cubic metres a decade ago.
?As of 2008, 54% of forestry tenures held by First Nations were being managed by First Nations themselves, rather than by non-aboriginal forestry companies.
?The profitability of these forestry resources increasingly depends on the Chinese market. ?
