Friday, April 18, 2014
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First Nations Entrepreneurship: It's No Business, As Usual

Sunny Freeman

Huffington Post

WEBEQUIE, Ont. — Eric Jacob sprinted to his pickup truck following an abrupt late night call. A seldom-seen shipment of large appliances had been strewn across an icy lake after a truck toppled on the winter road to his isolated reserve in Ontario’s Far North.

Determined to salvage the valuable inventory of the reserve’s only store, grocery manager Eric rounded up some buddies to make the four-hour round trip to fetch the damaged ovens and refrigerators and deliver them to the 840-person community.

“We did that all night,” he says.

Fortunate to have any job on the poverty-stricken Webequie reserve, Eric is in an enviable position, one with security and benefits. And he takes it seriously.

Starting as a stock boy nearly 20 years ago, the 38-year-old climbed the ladder to become grocery manager at the Northern, the lone retailer on the reserve, which sells everything from milk to dining tables, at about three times what they would cost in Thunder Bay, a two-hour plane ride south.

Eric doesn’t resent that his boss is not native to Webequie, not even Native.

His aspirations are more enterprising. He envisions a business empire, the kind that could start cash flowing within the community to resuscitate a lifeless economy.

The man willing to drive through the night to save sales for a faceless corporation is desperate for the chance to apply his work ethic to a venture he could proudly call his own.

Eric spots value, opportunity and potential customers in everything in Webequie, from scrap metal to wild rice. On this destitute reserve, he is what passes for an entrepreneur.

“I’d like to take over Webequie,” he chortles. “Be the guy. It could happen.”

But the aspiring entrepreneur faces an overwhelming series of social, institutional and financial barriers unheard of for startups elsewhere in Canada.

An unprecedented interest from Corporate Canada in digging for riches under the frozen muskeg to Webequie’s east could be Eric’s chance to get just one of his many business ideas off the ground.

The 5,000-square-kilometre Ring of Fire, said to contain $60 billion worth of gold, copper, nickel, chromium and other metals, could transform the area. It promises to bring road access, jobs and opportunity for aboriginal-owned businesses, so the community would no longer depend on that one store for all of the necessities they can’t find on the land.

But not all of Webequie is as eager as Eric for the money-making opportunities that roads and mining companies could bring. The community’s chief and council are wary of the effects of development on their cherished land and animals and the traditional culture they strive to maintain. They’re unfazed by the glacial pace of negotiations between First Nations, governments and miners over the project, saying they need more time to form decisions, prepare their underdeveloped community and secure government funding for their business plans.

More from HuffPost Canada's Staking Claim series:

Ring Of Fire: For First Nations, Disruption Is Certain, Profits Less So

Is This First Nation Ready For A $50-Billion Juggernaut?

The Ring Of Fire's Future Is Now A Burning Question

When U.S. mining giant Cliffs Natural Resources announced in November that it was halting development on its massive chromite project in the area, a chorus of voices lamented that it was the death knell for regional development. But some in Webequie and other nearby native communities welcomed the extra time.

Not Eric. He fears that by the time Webequie is open for business, outsiders will have moved in to push out native entrepreneurs.

“I keep telling the chief and council, if we had more businesses we wouldn’t need the store,” he says.

For now, Eric is trying to keep his entrepreneurial dreams alive with his DVD rental business — a red wire rack of films that hangs on the clapboard wall next to the washing machine at the back of Eric’s bungalow.

At $5 for a new release, Eric was once pulling in between $500 and $1,000 on a good week, according to his Excel spreadsheet. He has ambition, he has the latest releases, he has a website. But he’s losing business to a competitor who has a better location in the community. Eric asked the band if he could use a trailer sitting empty in a strategic location near the band office, but his request has gone unanswered.

The band’s restrictions frustrate Eric. In many reserves, aboriginal-owned businesses are also band-owned. In the rare circumstance that banks lend money to reserve members, it has largely been to band councils because their loans are secured by government money.

For a time, Eric thought he would bring his business acumen to politics. On a four-month break from the store last year, he sat on the band’s economic development committee.

He was charged with helping to start a band-owned restaurant that would have been the first in Webequie. Equipment was brought in, and Eric was forming plans. But he quit and returned to the store after realizing that the band wasn’t ready for execution. He hasn’t heard anything about the plan since.

Eric says he has also asked the band for permission to take over a fishing camp that has fallen into disrepair. But that request, too, has gone unanswered.

“Politics and business, they don’t mix and the band keeps butting into business,” he says.

Eric’s dreams would not be seen as particularly risky or adventurous in the rest of Canada, but he struggles to surmount obstacles that are unique to the country’s aboriginal community.

The unemployment rate in Webequie hovers about 70 per cent, with nearly every working band member employed by the band or the store. The community also grapples with low education levels, and high rates of suicide and drug addiction.

Eric is angry with the overcrowded and dilapidated housing, the high cost of everyday needs, the government neglect and underfunded schools. He feels the pain of isolation and substance abuse that others do here. The difference, he says, is his determination to channel that frustration into productivity.

“I take the good and the bad. I always try to think positively. People tell me I have my head on my shoulders,” he says.

On a drive around the reserve, Eric points out various business opportunities he is sure he could manage. Driving away from the dump, he slows near a heap of scrap metal that has been accumulating for years. No one has bothered to remove it from the island because it is a costly hassle.

“I could,” Eric says with a sigh. “You could make a lot of money from those, there’s good parts in there.”

Farther down the deeply pitted dirt road, the truck hits a particularly bad pothole.

“See! This could be a business, someone to fix up these bad roads,” Eric says.

Other rudimentary business ventures do exist in Webequie. There are makeshift food trucks that serve customers from coolers outside bingo games. Men with cardboard signs advertise KFC flown in from Thunder Bay or Lillian’s homemade meatloaf. Others cut their neighbour’s grass or sell wood.

But without access to capital, business ideas for anything more complex are difficult to get off the ground.

The Indian Act makes land ownership on reserves illegal and makes it difficult for reserve members to obtain capital. Reserve land is considered the Crown’s and therefore off-limits for privatization. That puts reserve residents at a disadvantage since they have little to offer as collateral for a bank loan.

On some reserves, buyers can purchase the home itself but not the land, which gives the real estate an extremely low valuation. On others, they are wary of privatization for fear it could strip aboriginals of their land.

Michael LeBourdais, chief of Whispering Pines First Nation, is an advocate for the overhaul of the Indian Act that would have the government transfer land titles from the Crown to band, which can then transfer them to individuals. The Act has been reformed to allow First Nations Land Management, which gives bands greater say over their real estate but not total control.

“The average Canadians can go and secure loans, use their homes for business, for education or to buy other homes,” he says. “That does not exist on federal Indian reserves. … You kind of wonder what’s wrong with this picture, and what’s wrong with this picture is the Indian Act.”

Allowing private land ownership on reserves would reduce the number of hoops that entrepreneurs have to jump through to complete a business loan on-reserve, he says.

Aboriginal entrepreneurship is a growing phenomenon in Canada, sparked in part by the economic activity driven by resource development on native lands. Several reserves have capitalized on providing services from heavy equipment leasing to catering for the nearby mining camps, creating a more ripe environment for entrepreneurship. And there is an emerging class of mentors for Eric in aboriginal individuals who have struck economic gold, like Dave Tuccaro, a self-made millionaire from the Mikisew Cree First Nation who made his fortune on the back of oilsands-related businesses.

Still, entrepreneurship on reserves is a relatively new concept and on-reserve businesses are growing at a much slower rate than off-reserve.

Many are “just dipping their toes into the economic and business world,” said Peter Forton, managing director of the Capital for Aboriginal Prosperity and Entrepreneurship fund.

“The opportunities that are available for aboriginal people as a result of all of this (development) are absolutely revolutionary in nature.They’re coming at them like a train.

“The challenge is that, while the opportunities are revolutionary in nature, the capacity necessary to take advantage of those opportunities is an evolutionary process.”

Aboriginal financial institutions are stepping in to fill the gap in lending on-reserve, financing that has been viewed as risky and unattractive for all but the most philanthropic non-aboriginal lenders due to the higher chance of default, as well as mentorship and other investments involved.

Eric holds application papers from the Nishnawbe Aski Development Fund to finance his business. He needs a convincing business plan and 15 per cent of the amount he is asking for as equity. But he is waiting to perfect his business pitch before he applies.

The would-be innovator is determined to overcome his own challenges, but he understands why others on the reserve don’t share his ambition. He has felt the pain of drug addiction both in his heart and his pocketbook, helpless after finding a loved one stole thousands from his DVD business to get her next fix.

The cycle started with residential schooling, where elders experienced fear, trauma and abuse. Eric’s father was in residential school, but never talked about it. He drank to pacify his demons. The only time he encouraged Eric was when he was drunk. That’s when he told Eric he could go anywhere, do anything.

For a time, Eric moved away from Webequie. He was living out West when his mother called to tell him his father had gone missing. Eric found him at a bar after a month-long drinking binge in Sioux Lookout and dragged him home.

Eric has heard tales of a successful subsistence economy in his home. His ancestors lived off the land, earning enough to survive while upholding their traditional values and culture.

Eric’s late grandfather made fine snowshoes and sold them for $500 a pair. “I bet I could make them,” he says with confidence. Another elder made and sold handcrafted canoes, a skill that was lost when the man died.

There is still potential in Webequie, in the beautifully handcrafted moccasins the women sew, in the pristine landscape with abundant fishing and hunting opportunities.

Eric boasts about the bear he shot last year and how he sold nearly every part of the beast, then is suddenly reminded of yet another business pitch — harvesting the region’s neglected wild rice.

That idea immediately sparks another. Inspired after finding tanks of gasoline sitting unused for months at the reserve’s tiny airport, Eric wonders: Why doesn’t someone open a gas station?

“I mean I have a lot of ideas,” he says after a rapid fire of suggestions.

“But that’s where the dead end is.”

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