Challenges erode Asian-market allure for First Nations

Initial momentum for overseas business relationship has slowed to a near standstill

Back in 2011, it looked as if business links between B.C.’s First Nations and Asia – particularly China – were about to get a lot stronger.

That was when then-Assembly of First Nations national chief Shawn Atleo led a delegation to China on a trade mission to drum up export business. The delegation included a strong B.C. presence, and First Nations representatives developed their first strategy for cultivating a relationship with the Chinese market, envisioning annual trade missions and long-term engagements.

Seven years later, the initial burst of First Nations interest in exports and other direct business connections with Asia appears to have slowed to a crawl.

The Canadian Council for Aboriginal Business (CCAB) has shifted its focus this year to a new procurement strategy of embedding First Nations companies in Canadian supply chains. A search of the CCAB’s website revealed few references to China, and even fewer mentions of Asia as a market.

In B.C., even some of the earliest adopters of the Asia strategy, such as the Lax Kw’alaams Band near Prince Rupert, have reported little activity or growth in the trade relationship between First Nations and Asian markets like China.

“There’s not much going on,” said John Helin, chief and mayor of Lax Kw’alaams, which owns the Coast Tsimshian Resources LP that holds two forest tenures with an annual allowable cut of 550,000 cubic metres. “The log shipments are still happening, and that’s maybe all that’s happening between us right now.… We’ve got the Prince Rupert container port right here, but other than the goods that are going by containers, there’s not much happening between our community and China.”

Even the log shipments have been declining, although interest from China and the First Nation itself is far from being the problem, according to Helin.

First Nations communities, he said, are not integrated well enough in the Canadian economy to have access to the commodities to sell to a market like China in the quantity that’s being sought.

For example, Lax Kw’alaams annually produces more than five million pounds of groundfish through the community’s fish plant. But besides a small quantity of mackerel, the community has virtually no access to valuable fish like salmon due to commercial fishing regulations off the B.C. coast. In addition, Ottawa’s proposed oil-tanker ban is hindering the band’s ability to pursue resource-sector businesses.

The Asia Pacific Foundation of Canada has been working on the portfolio as an invited partner with Indigenous stakeholders for the last few years. Program manager Scott Harrison said conversations about doing more business with Asia are ongoing, but he noted there are challenges.

“One of the key challenges is that no one is systematically looking at the Asia-First Nations relationship full time,” Harrison said, noting the complexity of First Nations governance in Canada.

Harrison added that funding for such programs remains a challenge, and, because most First Nations businesses are small and medium-sized enterprises (SMEs) whose fortunes tie in closely with the financial and social well-being of the communities where they originate, many such companies are risk-averse toward foreign markets.

“The domestic focus is right, because you do need to build up capacity before you can go international,” Harrison said. “That’s no different than other Canadian SMEs. And when it comes to scaling up, there appears to be a point where companies reach a plateau.… It’s clear that Asia is a market where you can get that investment to scale up successfully, but a business has to be ready.”

Interest remains high among First Nations for doing business in China and other large markets like Japan and South Korea, said author Calvin Helin (brother of Lax Kw’alaams Chief John Helin), who has led several B.C. First Nations trade missions to Asia.

The biggest challenge, he said, is that First Nations are still just beginning to get accustomed to the Indigenous rights affirmed by the landmark Tsilhqot’in Nation vs. British Columbia decision in the Supreme Court of Canada in 2014. Among them is the right to be consulted by any company or government wanting to proceed with natural resource development on First Nations land.

“The court says the First Nations have a right to the economic benefits of their traditional territory, and they have the right to manage those territories,” he said, noting that most B.C. First Nations have not negotiated separate treaties with Ottawa and therefore still hold Aboriginal land titles. “So that’s a very, very powerful means of pursuing trade and economic development, and I think a lot of First Nations are in a transition period of figuring out how to monetize those rights.”

He added that the potential, once First Nations leadership is able to fully realize the opportunities available to it, could be enormous.

“The situation in a lot of First Nations communities and their leadership is that they have to figure out how to holistically create development within their territory in a way that also protects the environment, and people are figuring out how to do that. If you look at a similar sort of development with the Maori in New Zealand, in 1991 they had about $8 billion in commercial assets. Today, they have $50 [billion] to $60 billion, and something like that is already in full swing here.”

He said the most lucrative way for B.C. First Nations to attract business from Asia might not involve going to Asia at all. He pointed to the model of the MST Development Corp., a partnership that incorporates members of the Musqueam, Squamish and Tsleil-Waututh First Nations, which has pursued real estate development on 160 acres of prime land, valued at more than $1 billion, in Metro Vancouver.

Similar development of Aboriginal land might be the quickest way for First Nations to maximize business relations with Asia, he said.

In the meantime, Chief John Helin said he is looking for ways for Lax Kw’alaams to develop value-added businesses locally with lumber exports to China or, eventually, exports of fish products to Asian markets. But the next big break may come when a large liquefied natural gas project finally takes shape.

“I think you always have to be optimistic, and hopefully some of the regulations that they impose on us – like that tanker ban they’ve imposed without consulting us, that really doesn’t help us – maybe they can take another look with our input,” Helin said. “Where we’re located, we are the closest port to the Asian market, so that just makes sense.”