INAC Can’t Handle the Truth: Attack on AFI Economic Development

Indian and Northern Affairs Canada (INAC) are trying to justify exclusion of Aboriginal Financial Institutions (AFI) and Aboriginal Capital Corporations (ACC) from accessing a private banking Loan Loss Reserve Fund (LLR), essentially demoting them to a second class lender for aboriginal institutions. However their position is weak and ignores the truth.

What’s Wrong with the INAC Assumptions

A central position in the INAC reasoning on the Loan Loss Reserve Fund selection is that AFI’s cannot administer loans over $250,000. The reality, however, is that a significant majority of Aboriginal Capital Corporations (ACCs) and private sector funded AFIs do in fact provide loans larger than $250,000.

These include

    Alberta Indian Investment Corporation
    Burns Lake Native Development Fund
    Clarence Campeau Development Fund
    Indian Business Corporation
    NWT Métis-Dene Development Fund
    Northern Enterprise Fund
    Saskatchewan Indian Equity Fund
    Tribal Wi-Chi-Way-Win Capital Corporation
    Ulnooweg Development Group

etc.

Another government position is that private lending institutions are the only ones able to handle high end financing, out of the range of ACC/AFI lending. This too is a selective distortion of the truth.

In fact there have only been five loans to date by private lenders through the LLR program; only one of which has been outside the long standing AFI mandates.
The single loan was for $2 million with the remaining four being between $250,000 and $375,000.

So 80% of the loans provided under LLR Programming were within the standard AFI loan practices.

Non-Aboriginal Lending Weaknesses

More significantly, conventional lenders appear to lack an overall efficiency and accessibility in making funds available to the client base. While $15.5 million was given to the LLR program within the last year (2008-09), only a little over $3.2 million was delivered in client loans. This poor market penetration reflects both convention lenders lack of motivation and the undesirability of convention lenders to the client base. In the same period AFIs provided 1,250 loans totalling in excess of $100 million.

Aboriginal Lending is Superior to Non-Aboriginal Lending

Aboriginal managed lending has proven to be more successful than any INAC managed lending processes. The precursor to Aboriginal Financial Institutions (AFIs) was the Indian Economic Development Fund (IEDF), an Indian and Northern Affairs Canada (INAC) program delivered directly to Aboriginal people through the INAC Regional office network. IEDF provided limited loan activity and extensive write offs which reportedly averaged 25% over the life of IEDF Programming. In drastic contrast, AFI write offs have averaged 6.37% over the past 25+ years.

If anything, AFI/ACC lending is also currently superior to conventional banking within aboriginal communities. In response to AFI/ACC achievements, INAC instead wants the private non-aboriginal banks to not just have a bigger bite of the apple but virtually the whole apple. In order for this to happen, AFI’s are being selectively disadvantaged in the marketplace through offers of loan guarantees to non-aboriginal institutions. To further add insult to injury, INAC is using aboriginal money to provide this double standard.

It is difficult, if not impossible to find any true and valid justification for INAC to provide for non-aboriginal loan guarantees to private institutions, especially without full and equal provisions to AFI/ACCs, and particularly in light of the past history of the failures of INAC and non-aboriginal lending. It makes no sense to bury successful operations in favour of propping up riskier programs.

“Taking food away from a family is a serious infringement on our rights. Indigenous peoples are, and always have been, an integral part of this ecosystem. The Innu did not cause the reduction of the Labrador caribou herd; rather it’s a result of development, resource extraction, the DEW line and other man made factors. Forcing our people away from wild foods amounts to a subsidy for private commercial food retailers and furthermore results in devastating health and social problems as well as loss of language and culture. – Chief Shawn Atleo
http://www.newswire.ca/en/releases/archive/February2010/24/c4320.htm

Resource hoarding by the government has been an effective and long-standing means of limiting aboriginal growth and sustainability. While Treaties do theoretically allow for rights to environmental resources, subsequent manipulation and separate government practices have all but eliminated these rights. At best, repeated challenges by Inuit, First Nations, and Métis peoples are required in order to reaffirm those same rights.

The latest stance by Chief Atleo is that The Assembly of First Nations is defending the right of Innu hunters involved in a dispute with the Newfoundland and Labrador government. Newfoundland is upset with the activities of about 150 Quebec Innu that it says are camped out in a closed hunting site.

A Productive Strategy

One reader to the story in the Globe and Mail states “Better for all of us to leave the animals and herds that is [sic] distress, alone and hope for the best.” (http://www.theglobeandmail.com/news/national/afn-chief-atleo-defends-innu-hunt-of-at-risk-caribou/article1480716/ )

The do nothing and wait for the animals to die out is not an answer, nor is hunting them to extinction. The real answer is a proactive one allowing both the animals and the cultures to grow. By allowing conservation ranching, as other nations do with their reindeer, we could achieve positive goals. Through ranching, a portion of existing herds with return to the wild of i.e. 10% stock herds annually would provide protection, study, and replenishment of the wild stock. At the same time it would reinforce cultural Dene/Innu traditional skill sets and supplementary conservation employment for the country.

Other animals could be used to provide wild meat stock to other First Nations communities and even a limited number of white tablecloth specialty restaurants. Reindeer meat is believed to be one of the best tasting and highly valued meats in the world.

Canada Shouldn’t Repeat its Failures

In the mid-1950’s the Sayisi Dene of Manitoba were almost wiped out by the federal government act of separating the peoples from their original homes and their central livelihood; the hunting of caribou.Bussidor and üstun Bilgen-Reinhart, Night Spirits: The story of the relocation of the Sayasi Dene, 1997, University of Manitoba Press

The caribou are a nomadic species and as are the people who depend upon them. The fact that herds travel from one modern-day jurisdiction to another cannot be allowed limit the rights of the peoples.

The caribou have inhabited this country and proliferated in harmony with the native peoples for thousands of years. It is only since the advent of non-aboriginal activities such as oil exploration and mining and the technologies that have allowed for more devastating commercial hunting practices, that species such as caribou have been threatened. It is in the interests of the Dene and Innu peoples to maintain the herds. Cooperation, not conflict, should provide the path to the future.

Proactive Conservation

The government conservation departments in fact do little to actually conserve species. Instead what little research is done is to document and count the falling numbers as the species and the cultures that value them are diminishing. If these governments and their agencies really wanted to preserve the regions, they would incorporate the resident populations in the conservation process.

Rather than hoard natural resources only to see them to waste away in the process, we need a new approach in environmental conservation and economic growth that benefits Canada and all of its peoples.

The Real Villain

Peter Goldring calls Louis Riel a “villain” who has blood on his hands from leading the Northwest and Red River rebellions. I suppose he is in the same sense that Menachim Begin and David Ben Gurion are villains. If Goldring’s interpretation were applied universally, similar villains such as George Washington and Nelson Mandela should also be reviled for defying their rulers and taking lives in seeking change in their governments.

But Goldring sees himself as one who can singularly distinguish the truth as indicated in his own East Edmonton riding biography.

‘Mr. Goldring has a strong interest in and belief that Canada’s history at war and in peace has not been factually taught in Canada’s schools. “Canada’s history, truthfully told, would help foster Canadian pride and unity,” says Mr. Goldring.’
http://www.petergoldring.ca/EN/4687/

So somehow Mr. Goldring would like to rewrite history to his viewpoint despite the fact that he is not a historian nor academic in the field. We have only his word that he knows more about Canadian history than the rest of us. This immediately raises a number of red flags. After all, are there not also people trying to rewrite history to deny the holocast? Should we just take their word for it?

This makes it difficult for Conservative member like Shelly Glover who is a Métis herself who did make a statement

“We have different opinions. I, of course, disagree with him wholeheartedly with regards to Louis Riel,” she said. “I was very disturbed about what I read because I found it to be unjust and inaccurate and unfortunate.”
Glover spoke with Goldring on the telephone Thursday and said the two Tories agreed to disagree on the matter.

http://www.cbc.ca/canada/manitoba/story/2010/02/19/mb-louis-riel-newsletter-villain-manitoba.html

The Goldring position did not go over well even with the Prime Minister’s Office who put out a statement on his pamphlet.

“This document is absolutely not, in any way, an initiative of our government or our party,” said Dimitri Soudas, a spokesman for Prime Minister Stephen Harper, in an emailed statement.
“This is a personal initiative of MP Goldring which we strongly disapprove of. Louis Riel is a historical and controversial figure. But he played an important role in the development of Canada and in the protection of the rights and culture of the Metis and Francophones in Canada.”

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20100219/Riel_PMO_100219/20100219?hub=Canada

So Goldring stands alone in his vilification of one who many regard as a revolutionary. Though Manitoba was eventually taken over in the formation of Canada a struggle continues for the peoples of aboriginal heritage to preserve and build on their cultural and national identity. It must be remembered though that respect and rights only exist if people are prepared to continuously stand up for them.

If Canada’s aboriginal peoples are ever to achieve true self-reliance and self-government, they simply cannot allow the INAC Loan Loss Reserve Initiative (LLRI) to go forward as offered. A court action as launched by AFI’s must proceed.

The recent double cross of aboriginal financial institutions (AFIs) by the federal Conservative government demonstrates how misleading they are in dealing with aboriginal interests. While extolling the virtues of AFI’s in public, they have been exposed at simultaneously plotting against those very same groups behind closed doors.

Chuck Strahl at the Empire Club touts the value of AFI’s. In his own words

“Going back 20 years, Aboriginal entrepreneurs had great difficulty getting commercial loans from conventional sources. Provisions in the Indian Act, which prevented these entrepreneurs from pledging assets, were largely responsible. These budding entrepreneurs also lacked track records as successful business people and had yet to acquire proven business expertise. Thanks to partnership, the situation is much different today. In addition to helping found AFIs, the Government of Canada has invested more than $200 million to capitalize them. The AFIs have done the rest. Using this capital and rolling it over many times, AFIs have invested $1.2 billion in the Canadian economy via more than 30,000 loans to Aboriginal entrepreneurs. This access to capital has been—and continues to be—critical to long-term Aboriginal economic self-sufficiency.” – May 15, 2008

http://speeches.empireclub.org/details.asp?r=vs&ID=65980&number=2 , The Honourable Chuck Strahl, Partnership, Consultation, Education, May 15, 2008

Yet INAC proceeds with launching the Loan Loss Reserve Initiative (LLRI) and offers it to non-AFIs only.

“Even as Canada showcases its native heritage at the Olympics, Alan Park, CEO of Tribal-Wi-Chi-Way-Win Capital, [TWCC] says his and other aboriginal financial institutions have been lopped out of a federal loan-guarantee program they helped design.”

http://www.intelligencer.ca/ArticleDisplay.aspx?e=2449686 , Aboriginal lending program in jeopardy, Christina Blizzard, Belleville, Intellegencer, February 14, 2010

It is through the direct efforts of aboriginal business that success has been achieved while non-aboriginal small business loan programs have been a massive failure.

“Steve Morse, the chief operating officer of the National Aboriginal Capital Corporation Association, said its members have a very respectable loan loss rate of about seven per cent. It has recently been reported that a national, mainstream small business loan loss program has generated a loss rate of about 40 per cent over the past 10 years.
Morse said businesses the Aboriginal Capital Corporations (ACCs) lend money to have a 58 per cent success rate, compared to a national rate of about 33 per cent.”

http://www.winnipegfreepress.com/business/loan-plan-irks-aboriginal-group-80885092.html Loan plan irks aboriginal group, Martin Cash, January, 7, 2010

The realization that aboriginal business development is a reliable and profitable sector of the Canadian economy, the federal government has sought not only to simply hijack it, but to do so in a way that would exclude aboriginal financial groups from fair competition in the marketplace. In brief, non-AFIs are guaranteed against loan loses by Indian and Northern Affairs Canada – using aboriginal money no less – while denying AFI’s the same guarantees.

Effectively this takes aboriginal funds to defeat aboriginal growth and business expansion.

Regardless of Strahl’s flowery presentation at an exclusive luncheon, his actions appear to portray a government intend on preventing the evolution of aboriginal self-reliance.

The basis of any self-reliance is the ability to develop and sustain an economic foundation. If aboriginal peoples continue to be manipulated economically, they can never hold a voice in their own future. Until now INAC has been able to limit the aboriginal peoples potential but the philosophy by which that control has been exerted is archaic. It still assumes that aboriginal peoples, like livestock, have no inherent ability to exist in society without continuous external management. This must be changed radically and preferably eliminated and replaced with full human rights recognition.

On the road to the future perhaps one of the harshest obstacles has been alcohol and drugs. Although not restricted to aboriginal peoples, they have been more susceptible to the devastating personal and social effects, particularly when combined with poverty, a dysfunctional family structure, and depressing living conditions.

The life and death of Tracie Owens is tragic and not unique. But the organizational and financial problems of the communities involved aggravated her chances for proper treatment. No, there probably could not have been any happily ever after scenario but there could have been a more manageable situation and a positive quality of life outcome.

One of the observations in a 72 page inquest report in 2008 concluded that

“keeping kids in the community, a community with resources, and to provide support to the family is the longterm answer. Parallel with this, obviously, is the need for the necessary community development – economic, housing, education, training – to make the community well so it can raise a healthy child.”


Report on Inquest of The Honourable Judge John Guy, January 11, 2008

It takes a lot of conscientious organization and a lot of funding to provide not only Tracie Owen but the hundreds of other children that face similar threats in society. For that professional and well administered programs are vital.

A further major concern comes from a more recent review this past Thursday. The report indicates that in addition to the complexity of treating those at risk, there was lack of proper oversight and diversion of funds by members of the Southeast Resource Development Council. At this point the tribal council chiefs are reported to be split on findings of the review and how they will respond needs to be clarified

Regardless, it is clear that the system was lacking at the time and any suggestion that funds vital to such a complex program is to be taken seriously by the members of the community. Underfunding is almost a given, as with most aboriginal programs but was there questionable management and misappropriation of resources away from their intended purpose?

The lives of our children, all of our children, are too important to allow them to be used as fodder for internal power struggles. The aboriginal peoples cannot allow their future be sacrificed as a result of poor organization and management. Without responsible behaviour by chiefs and councils, there can never be a strong self-government, either at the local or national levels.

The issues that led to the loss of Tracie Owen reflect a broader need for focused oversight and, more importantly, disciplined and responsible leadership.

Copyright 2010 Peter Warkentin