I have spent the past 16 years of my business career working for and within many First Nations communities in the Interior of British Columbia and the Yukon. Like many Canadians, I grew up aware of, but unable to explain, the separation that existed between the non-native business communities and the native communities that surround many of our cities.
Having participated directly in the Osoyoos Indian Band’s growth and now the Penticton Indian Band’s focus on its economy, I have learned lessons that might be valuable for native and non-native communities to consider.
Why consider developing a business on reserve?
There are practical and philosophical reasons to consider developing on reserve: location; leasing of lands rather than buying; an available, often underemployed, labour pool; zoning flexibility where the local First Nations government can determine land use; favourable taxation strategies, and potential funding programs that assist First Nations joint venturing with non-native companies. What all Canadians should reflect upon, though, is the need to bridge the economies of native and non-native communities.
As the National Aboriginal Economic Development Board in its 2015 progress report stated, “The most striking trend is that First Nations living on reserve had the worst economic outcomes for nearly all indicators.”
This included gaps in employment, college completion rates, income levels and housing conditions. Businesses located on reserve raise the standard of living for aboriginal people, which, in turn, generates economic benefits for the adjacent non-aboriginal community.
For example, the Osoyoos Indian Band has made capital investments of well over $500 million on its reserve in the past 15 years. This capital spending generates wealth (and significant taxation revenue) and employment opportunities far outside the reserve boundaries.
As a practitioner of native economic development, I believe the leadership of the chief and council affects the economic progress of a community. Leadership that demonstrates willingness to put the community’s well-being over self-interest, commitment to education and hard work, measured risk-taking and a willingness to be measured against tough business standards, including transparency of financial results, productivity, variance budgeting and a hiring policy that ensures an effective organizational structure.
There are other requirements that are critical to a First Nation advancing its economy and attracting businesses. They include:
• A comprehensive community plan that includes community input on economic and land-use plans.
• Investing in infrastructure to enable business development. Recently the Penticton Indian Band borrowed more than $5 million to build roads, water, sewer and other utilities to service a residential/commercial development. This investment has paid off as more than 80 homes plus a large commercial winery have been built with over 500 more homes being planned.
• Financial planning and leveraging assets to use either chartered Canadian banks or the First Nations Fiscal Management Act to finance projects.
• Hiring a board of directors or advisers, preferably working within an economic development corporate structure, to provide sound business stewardship.
• Developing a co-operative and collaborative relationship with the community.
• Creating community awareness and brand awareness of your plans to build an economy.
Many of the business risks on reserve are similar to off-reserve challenges, such as business cycles, competition, finding skilled employees and strategic and tactical decision-making. However, there are other challenges that are unique to doing business on reserve. Likely the greatest challenge is the federal bureaucracy where environmental, engineering, legal and leasing approvals can be lengthy. There is also a political uncertainty that can prevail in some communities where the election of a new chief and council can alter the direction of economic activities.
Overcoming the challenges of building an economic base for a community takes perseverance, application of business principles, five-year business plans and a collaborative leadership model that ensures an unbiased commitment to ensuring that business successes are enjoyed by both the native and non-native business partners. The benefits of a strong native economy will bring us together as a nation and help heal the wounds of our past relationships with First Nations. •
Chris Scott is an adviser to the Penticton Indian Band and a director of the Lower Nicola Indian Band Development Corp. He has worked with First Nations on economic development for more than 15 years and is a former chief operating officer of the Osoyoos Indian Band Development Corp.
