Is the Osoyoos Indian Band really a financial success?
Is the Osoyoos Indian Band really a financial success?
An examination of Indigenous dependence
By Pim Wiebel (an anonymous researcher and former Indian Residential School teacher)
Clarence Louie, Chief of the Osoyoos Indian Band, is widely lauded for his business acumen and for leading his band to financial independence. The Chief’s accomplishments are given ubiquitous press, from interviews and articles in the mainstream media; to an Amazon book review of his memoir, Rez Rules, which describes the book as a history of “How the Osoyoos Indian Band—’The Miracle in the Desert’—transformed from a Rez that once struggled with poverty into an economically independent people”; to an article in a winery blog from which we learn that “The Nk’Mip Cellars [an Osoyoos Indian Band partnership with Aterra Wines Canada] are one of many business, health, social, educational and municipal initiatives that have earned the Band financial independence.”
Does the experience of the Osoyoos Indian Band (OIS) present the possibility of a First Nation achieving economic independence while operating under the dependency-fostering regime of the Indian Act? Is the experience of the OIB a template for other First Nations striving for self-sufficiency and sovereignty? Chief Louis harbours no doubts that it is so. In Rez Rules, he writes, “The Osoyoos Indian Band proves that when a First Nation is not dependent (in a welfare state) but independent (in a business state) while contributing to the local, regional, and national economy, it is good for all of Canada and the United States.”
Some moderation of the enthusiasm is in order.
A paramount consideration in determining a First Nation’s, or any nation’s, level of independence would be the degree of its fiscal self-reliance. A review of OIBs financial statements for the year ending March 31, 2021, shows that Chief Louie’s band has a long distance to go. Transfers and grants of government funds to the OIB in that fiscal year totaled $13,623,121, or 55.8 percent of total band revenues of $24,400,389. The government support amounted to over $27,000 for each of the OIBs approximately 500 band members.
It is curious, given that OIB is purported to have eliminated poverty, that revenues received by the OIB in 2021 included a $25,000 grant from the Province of British Columbia for poverty reduction. Over one-fifth of the OIBs expenses reported in the 2021 financial statements are for “social development” and “social housing” (as distinct from other human services such as health, education, and childcare).
The Fraser Institute published a study in 2017 titled Bending the Curve, in which it discusses the progress some First Nations are making towards financial independence through business and resource development. In the case of OIB the curve is unfortunately bending in the wrong direction. In the fiscal year ending March 31, 2016, OIB revenues from governments were $4,638,100, or 39.7 percent of total revenues of $11,669,588, compared with the 55.8 percent of total revenues they represented five years later. The government dollars received by OIB in 2021 were, astonishingly, three times greater than the amount received in 2016.
OIBs increased level of government support in 2021 was not an anomaly related to pandemic spending. The trajectory had begun turning upward prior to Covid, with the share of government dollars having risen from 39.7 percent in 2016, to 47 percent in 2019.
It is important to note that OIB members and businesses residing on reserve are largely exempt from provincial and federal taxes, including the GST/HST. The tax exemptions OIB enjoys are, in effect, subsidies that must be factored into an analysis of the band’s level of government dependence. Despite the exemptions, the band is served by tax-funded “big ticket” assets – high school, hospital, recreational facilities, police, roads – located in the adjacent city of Oliver and funded primarily through municipal, property, provincial and federal taxes paid by the citizens of Oliver, British Columbia, and Canada. (In the case of off-reserve schools, the government provides tuition subsidies to school boards to cover costs for First Nation students. In some cases, the monies are passed through the FIrst Nation, and in others they are provided directly to the boards.) In addition to these local amenities and services, OIB members benefit from provincial and federal projects such as parks, transportation and national defense.
Chief Louis, aware of his stature in the world of First Nations entrepreneurship, eagerly gives advice to poorer First Nations that depend even more heavily than OIB on government largesse. In Rez Rules, he writes, “Too many First Nations communities bypass jobs in favour of government grants, federal transfer dollars and ‘per capita’ handouts for band members…If you want to call yourself sovereign, you’d better be economically and financially strong. Operating year to year on grants won’t cut it and Indians have gotta stop looking for that free lunch. There’s far more Rez pride in running your own operations and making your own money, than operating and running government funded programs.”
Oh, the irony!
To be fair to Chief Louie, although OIB continues to be heavily dependent on government transfers and grants, his enterprise-friendly policies have helped the band generate significant own-source income through business development. OIBs equity share of business income ing 2021 was $5,445,129, representing a commendable, though modest, 22 percent of total revenues. OIB businesses have, in addition, created significant employment for band members and non-First Nation workers.
OIBs vineyard and winery business is among its most significant ventures. The vineyards were established in the late 1960s, with the installation by the Indian Affairs Department of an irrigation system, and the initial planting of 9,000 grapevines (Department of Indian Affairs 1968-69 Annual Report, p. 8). The first crop was successfully produced in 1970, with 115 acres under cultivation (1970 Annual Report, p. 100). To his credit, Chief Louie repositioned and expanded the business in 1996 through a partnership agreement with Vincor wineries in which Vincor leased the land and received 49 percent ownership along with control of the product. Arterra Wines Canada recently replaced Vincor as the land lessee and winery business partner.
OIBs largest share of business equity income does not come from band enterprises per se, but from land leases to outside businesses and entities. A provincial corrections centre that was established on OIB land in 2016 brings in hundreds of thousands of dollars of lease income annually. In another of his ironical judgements, Chief Louie disparages the heavy reliance that many First Nations have on lease income. In a May 29, 2014, Globe and Mail article, “How a native band went from poverty to prosperity”, he is quoted as dismissing easily obtained rent income as “rocking-chair money”.
Chief Louis predictably offers up the legacy of the residential schools as an explanation for First Nations poverty and dysfunction. In Rez Rules, he asserts that the government “legalized the tormenting, abuse and killing of Native children”, that the schools “caused intergenerational grief, alcoholism, hatred, mistrust, and community and family breakdown”. Louis makes these assertions, despite the fact that only a small minority of First Nations children ever attended a residential school, and that it has been demonstrated that the residential schools had largely positive impacts for those who attended.
Alternatively, Chief Louis has some surprising and what may be considered “politically incorrect” opinions on the causes of poverty and dependency in struggling First Nations. The Chief is quoted in a National Centre for First Nations Governance case study of the OIB, as stating, “To run successful businesses, you must deal with the people where they are. The majority of our people are not ready to compete. Get the people who can make the business a success, whatever race they happen to be.”
The case study cites another astonishing internal assessment of the band workforce: “The OIB has observed that many of [the businesses’] best workers are over 60 years old. They learned how to work when they were young and came from an era where there was no welfare and employment insurance.” It is highly likely that many of those industrious elders are products of Indian residential or day schools. Louis has had several decades as Chief to develop the OIB workforce and access to hundreds of thousands of federal dollars annually to provide job training. Nevertheless, in a recent address to the Penticton, B.C. Rotarians, he continued his complaints about band members’ work skills deficits and their reliance on social assistance.
So, on the one hand, Chief Louis invokes the long-ago disbanded residential schools and their legacy, as the root cause of First Nations social and economic malaise; and then, on the other hand, he hypocritically blames First Nations underdevelopment on their reliance on government support and “rocking chair” rent money, and on their unmotivated workforces.
For First Nations people trapped in a cycle of soul-searing dependency and poverty in the vast majority of reserves that are geographically isolated and resource-poor, Chief Louis’ admonitions to pick oneself up by the bootstraps must be seen as a fool’s errand. The small number of Canada’s 634 First Nations that have reached anything approaching financial independence are almost all located on or near a population centre, or on resource-rich land that can be leased or readily developed through partnerships with outside enterprises. Some large, strategically located First Nations depend overwhelmingly on government support. The Six Nations of the Grand River, situated on rich agricultural land within a short driving distance of several southern Ontario cities, receives 90 percent of its income from government sources.
Located on 32,200 acres in the heavily populated Okanagan Valley, one of Canada’s premier agricultural and tourism regions, OIB is blessed with opportunities far superior to those possessed by the vast majority of First Nations. And yet, despite all its natural advantages, the OIB continues to function on a foundation of government support.
Holding out the OIB as a model of independence, as Chief Louie and those who champion him do, is misleading and gives false hope to First Nations looking for self-reliance and sovereignty. And continually spouting rationalizations such as the legacy of residential schools as the cause of failure, can only serve to foster a sense of victimhood and dampen the forward-looking mindset that is fundamental to progress.
Whether Canada’s First Nations can achieve genuine sovereignty and address social dysfunction while operating under the Indian Act and reserve system as they exist, is an open question. Over the past many years, the federal and provincial government response to First Nations underdevelopment has been to prop up their economies and social systems through massive and exponentially increasing spending on “Indigenous Priorities”, including, as we have seen, on priorities at the Osoyoos Indian Band. Meanwhile, crime, incarceration, suicide, child foster placement, and diseases long-ago eradicated elsewhere in the developed world, are on the rise in First Nations and Indigenous communities.
Chief Louie offers a surprisingly frank suggestion concerning the approach that needs to be taken to address one of the most serious problems facing Indigenous communities: the hugely disproportionate and continually growing rate of Indigenous incarceration. He is quoted in the 2014 Globe and Mail article referenced earlier, “If I have to go to one more jailhouse sweat lodge, I’m going to puke…It’s not about spiritual wholeness, it’s about the economy. Inmates need to learn carpentry and plumbing and other skills that will help them make a living when they get out.” Corrections Canada unfortunately continues to prioritize cultural accommodation at the expense of vocational training. It is unsurprising that the Indigenous proportion of the federal prison population has risen to 33 percent, up from 23 percent in 2014, when Louis made his comments.
Band-aids in the form of individual settlement payments that come with a short shelf-life, and superficially appealing social projects, have not reversed the trend towards increased First Nations and Indigenous malaise. The time for the government and Indigenous leadership to recognize this reality and give consideration to more comprehensive and incisive solutions, is long overdue.
Most Canadians wish for the First Nations people to find their just and equal place in our country. But without broad and deep reforms to business as usual, the prospects remain distant and dim.
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Thanks for reading. For more on indigenous issues read - The Special Interlocutor of the Aboriginal Industry
Thank you, Pim Wiebel, for this honest and revealing (and courageous) article. I've read Rez Rules and found it interesting and helpful in explaining what chiefs and councils are up against in terms of rez politics (his chapter on the per capita issue is particularly enlightening). For those who haven't yet had a chance to read it, I recommend it (available at libraries), but be aware that there's a mix of honesty AND toeing the narrative line (especially, as Wiebel mentions, with respect to scapegoating residential schools). You can understand why Chief Louie had to do that, and it's even evident in his subtitle: Rez Rules: My Indictment of Canada’s and America’s Systemic Racism Against Indigenous Peoples. He MAY have been genuinely captured by the narrative, but it's more likely he just has to maintain good relationships with his fellow band members. Who can blame him? I think he's trying to push the envelope, but he has to stay alive to continue to make a difference.
He does get quite bold in the following paragraphs relating to residential schools (which I realize is a little off the topic of economics, but I want to make these excerpts available to folks who don't have ready access to the book):
p. 101 (and onward)
"I have talked to many residential school survivors and have found that, of course, not all of their experiences were the same. Some have told me their residential school experience was not as bad as if they’d stayed at home, where there was a lot of alcoholism and kids were left hungry and cold. Some were glad to get away, and some parents were glad to be rid of their responsibilities, actually dragging their kids to the train or cattle truck that would take them away. For the vast majority, however, residential school was the worst experience of their lives.
"Growing up on a Rez where a majority of the adults had suffered residential school abuse, I did not know or understand at the time where their anger, jealousy, and rage were coming from. The constant drinking, the thoughtlessness of parents leaving their kids for days, sometimes weeks, to fend for themselves. Today we look on this lack of parenting skills as the obvious result of the residential school experience: these people could not possibly have picked up such skills, as they were taken from the parents who might have passed them on. The post-traumatic stress is undeniable. Parents today would be arrested if they treated their kids with the kind of neglect that was happening on the reserves in the 1950s, ‘60s, and ‘70s. . . .
"But although the Canadian and American governments were responsible for the cultural genocide, a question that is seldom asked is, Why didn’t Native leadership or the parents do more to prevent their kids from being taken away? Mohawk journalist and residential school survivor Doug George-Kanentiio addressed this issue following the completion of the Truth and Reconciliation Commission’s report. The Commission, he wrote, failed in this important area “because it left out the active participation of the Band councils in removing the children from their homes.” He continued:
[This paragraph is George-Kanentiio being quoted:] No Native person, then in authority, has ever been questioned about why they went along with these removals or why they never, to my knowledge, asked what was being done to the children in those schools. In all those bitter months as an inmate at the Mohawk Institute (located on Six Nations land in Brantford, Ontario) no Native official of any kind bothered to investigate our situation. The Cree and Mohawk boys and girls would sit near the windows looking down that manicured driveway for some adult to come to our aide [sic] yet no one did. The last we saw of the Band councils was their hiring of someone to place us on those trains and expect us, as ten-year-olds, to find our way 350 miles from home to the Institute. We wanted to know why the Commission did not hold Native officials culpable … it was disturbing to us that the Mohawk people, the chiefs and others, did nothing to stand in defence of their children, that which is most sacred to any community.
[Back to Clarence Louie’s commentary:]
When I asked my gramma what she remembered about kids being sent to residential school, she said, “I would see some parents dragging their kids crying to the train or bus and pushing their kids away.” I asked, why would parents do that to their kids? My gramma replied, “So they could go drinking.” I know some parents were threatened with jail if they didn’t send their kids to residential school in the early years, but in the later years that was not the case. I know most of my people were poor and had trouble putting food on the table. Some parents wrongly thought their kids would eat better and get a better education in residential/boarding schools.
[me again:] Sorry, this got to be rather a long comment! I had transcribed some of these passages before returning the book to the library last fall, in case I wanted to refer back to them.
Until now, I had no idea that the amount of money paid by hardworking taxpayers to support Indian bands was so enormous. This only raises my level of disagreement over the need for reserves at all.
These people have no pride in asking for and accepting the dough. What a disgrace. Thanks for the eye-opener.