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How a B.C. native band went from poverty to prosperity Add to ...

The Osoyoos Indian Band is arguably the most business-minded First Nation in Canada.
So what’s the secret to their success?

The first thing that strikes you about the Osoyoos Indian Band is the postcard setting of its reserve. Deep in British Columbia’s southern Okanagan, it’s surrounded by weathered mountains and mirrored lakes. This is the hottest and driest part of Canada, a northern extension of the Sonoran Desert, where rattlesnakes inhabit sagebrush canyons and noonday summer temperatures can hit 38 C.

The Osoyoos Indian Reserve, in British Columbia's southern Okanagan, spans some 32,000 acres.

The second striking thing about the Osoyoos Indian Band is that it’s not poor. In fact, it’s arguably the most prosperous First Nation in Canada, with virtually no unemployment among the band’s 520 members. Job-seekers from elsewhere flock in to work at the band’s businesses, which last year saw $26 million in revenue and $2.5 million in net profits. Meanwhile, the reserve’s impressive school teaches native heritage and the Okanagan language.

The third singular thing about the Osoyoos Indian Band is its hard-ass leader, Chief Clarence Louie. If you ask for an appointment, he sets the tone right off the top. “Be here at 9 o’clock sharp,” he texts. “No Indian time.”

The remark is typical. The curt, outspoken chief has been known to scold other aboriginal leaders who drift into meetings a few minutes late with coffee cups in hand. Louie doesn’t have time for diplomacy or political niceties. He makes it clear to everyone he meets that he expects them to either lead, follow or get out of the way.

How did the Osoyoos band become so prosperous while hundreds of other Canadian First Nations wallow in despair? Is there a way to franchise Louie’s model and export it to other reserves? These are urgent questions. After decades of social engineering, ineffective self-government and billions of dollars of federal spending, everyday life in remote First Nations continues to be deplorable. And judging by demographic trends, conditions are likely to go from bad to worse—unless someone like Clarence Louie has a better idea.

Critics of Louie’s success often say that he’s merely lucky—the band owns a fabulous piece of real estate. As you drive 20 kilometres down the narrow winding highway from Oliver to Osoyoos, just about everything you see out the driver’s side is Indian land: Of the band’s 32,000 acres, a good third of it is rich valley bottom bristling with vineyards. But not very long ago, the Osoyoos reserve was plagued with the same problems of poverty, crime and family violence common to other First Nations across Canada.

Joe McGinnis remembers it well. An Osoyoos elder, he’s a quiet, composed man with a baseball cap tugged down low, a wispy beard and the demeanour of a mountain ascetic. He’s one of the few remaining speakers of Okanagan.

He grew up in the 1950s, in a community wracked with booze and violence. “There was nothing to do,” he says. “There were no jobs, no band office, no local government, no school. There was an Indian agent up in Vernon who would show up once a month to hand out welfare cheques. That was about it.”

McGinnis was shipped to residential school in a livestock truck at the age of 5 and only saw his parents in the summer. “It was very lonely to be taken away from your family at such a young age,” he says. “It takes many years to get over something like that.” At the age of 15, he ran away from school. “There was lots of work in the orchards of the Okanagan but the people here wouldn’t hire Indians, so I crossed the line into the States and rode the rails and picked fruit across Washington and Oregon.”

The nurturing of native culture on the Osoyoos reserve includes school trips to collect wild food.

Louie was younger than McGinnis, so he managed to miss residential school. But his sister, Mona, says he had a difficult childhood anyway. “The reserve was a rough place in those days. There were no jobs and the main recreation was drinking and fighting. Clarence was a small kid and we both got picked on a lot, especially on the school bus. I just dreaded getting on that bus.”

At the age of 19, Louie attended what is now First Nations University in Regina, then went on to log two years in native studies at the University of Lethbridge. At the age of 23, emboldened by the Red Power movement of the 1970s, he ran successfully for chief.

“It’s the same story all over Canada,” Louie says, sitting in his office beneath portraits of his heroes Muhammad Ali and Nelson Mandela. “They gave the best land to the European newcomers and stuck the Indians back in the bush and gave them bread and water and a Bible.

“As I grew up and studied our history, I became convinced that the remedy to most of our problems was economic development. We needed to close the circle and reclaim the power that we had before white people came along.”

When the Hudson’s Bay Co. first started doing business in the Pacific Northwest in the 1800s, the Okanagan nation (of which the Osoyoos are part) encompassed most of south central British Columbia and sprawled far down into Washington. According to the journals of early explorers, the Osoyoos were a well-respected, peaceful and prosperous people. Then came the gold-rush era of the mid-1800s, when thousands of prospectors and drovers with large herds of cattle traipsed north into Indian territory, provoking bloody fights with Okanagan warriors. In 1877, the Canadian government persuaded the Osoyoos to move onto the reserve where they reside today—a small portion of their original territory.

When Louie became chief in 1984, the land wasn’t being used to generate much in the way of jobs or wealth. The band was operating a campground and a vineyard but both were sloppily managed and in debt. Apart from government transfer payments, the only other income came from nickel-and-dime lease arrangements with non-native farmers and small businesses.

Louie’s first efforts at developing band-owned enterprises made little headway—in part because he had no business background and in part because, by federal law, First Nations cannot mortgage their own land. No collateral means no start-up financing from banks.

Louie lost his bid for re-election in 1989. When he was re-elected in 1991, he was determined not to repeat his rookie mistakes. “The band was insolvent and under third-party management,” he says. “We recognized that we needed outside help.”

He took advantage of a federal/provincial program called Industrial Adjustment Services, designed to help communities gain the skills required to run successful businesses. With the help of an experienced IAS “white guy” named Dave Sutherland, Louie introduced strict financial controls and accountability measures, some of which were unpopular with band members accustomed to the casual rules of earlier business ventures. “Mismanagement and general incompetence are big problems on the Canadian rez,” he says. “We wanted to let people know those days were over.”

The community launched a vision quest that sought to involve all the band members in a long-term development plan. The search arrived at an ambitious goal—total economic self-sufficiency by 2005. It seemed like a pipe dream—only a few band members were employed, and the rest of the labour pool were lacking in basic education, job skills and work ethic. “Outside experts like Sutherland helped us to get people trained,” Louie says. “Some of our people needed a pat on the back and some needed a kick in the butt. A hundred years of enforced dependency had broken our tradition of hard work and independence.”

Louie can be a tough SOB to work for. He doesn’t believe in the concept of ‘downtime.’
Chris Scott

Louie and his band councillors usually get most of the credit for turning his community around, but it’s unlikely they could have done it without partnerships with the outside business community. One of Louie’s key team members was another “white guy” named Chris Scott, who offered to help the band build a clean, streamlined corporate structure based on proven practices and personal accountability. Scott, who had built a successful fruit company in the Okanagan, didn’t need the work; he was motivated by a desire to help.

He wasn’t exactly greeted with open arms. “Some of the people on the reserve were understandably mistrusting of white men in neckties, and others were just opposed to any change of any kind. I’m a stubborn and fairly thick-skinned guy, but I was really unprepared for the hostility that greeted my arrival. I was criticized and threatened on a regular basis. One big guy had to be restrained from punching me out. Another guy walked into my office, laid a big bowie knife on my desk and said, ‘Give me one reason why I shouldn’t use this on you right now.’”

Scott says the main thing that kept him going was his belief in Louie and his long-term plan. “He can be a tough SOB to work for. He doesn’t believe in the concept of ‘downtime.’ He demands the impossible from his inner circle and rarely gives praise for someone’s extra effort or a job well done. He’s always focused on work, 24/7, and he expects everyone to go as hard as he does. But his heart is in the right place and I was convinced that we could make it work.”

Chief Clarence Louie (left), with adviser Chris Scott (right).

Ronny McGinnis, who has been married to Joe McGinnis for 33 years, recalls that when Louie and Scott negotiated a pipeline lease deal, there was tremendous pressure to parcel out the resulting income in per-capita payments to band members. “People wanted to buy new cars and whatever with the money and we were determined to reinvest it for the future of the community,” McGinnis says. “Well, I thought we wouldn’t live to see the end of the week. We were accused of stealing the money and everything else. But we had this new policy of transparency, so we could say to everyone, ‘Come and see the books.’ People were really mad, but when they saw the eventual benefits, they became believers.”

Meanwhile, Louie was busily educating himself on the workings of the outside economy. (“I think he’s read just about every business book ever published,” Scott says.) In 1995 the Osoyoos Indian Band bought out the lease on the Cherry Grove Golf Course and took over its management. Embarking on an aggressive expansion, it invested $2 million of band funds in the project, and renamed it the Nk’Mip Canyon Desert Golf Course, gambling that a world-class 18-hole course would draw traffic to the band’s other businesses, such as a neighbouring trailer park and condos. The band also asserted control over the taxation of non-native companies leasing land on the reserve—taxes formerly scooped by the province. It was a small initiative, but it added $750,000 in annual revenue.

In 1998 the band opened a gas station and convenience store—a modest venture but in keeping with Louie’s focus on creating long-term jobs for band members. His belief that “the economic horse pulls the social cart” broke with the tradition on many First Nations reserves of relying on the leasing of land to outside companies, creating rent income that Louie dismisses as “rocking-chair money.” He wanted not just income for his members but what he calls “a reason to get out of bed in the morning.” But the inability to get mortgage financing hampered those ambitions.

On a national level, the controversial issue of band members using reserve land as collateral is gathering support from both ends of the political spectrum. It’s a favourite idea of Stephen Harper’s political godfather Tom Flanagan, and of native leaders like Manny Jules, who leads the First Nations Tax Commission, which is lobbying Ottawa to allow First Nations to take full ownership of their land and use it as collateral if they choose to do so.

With no access to bank financing, Louie, despite his inclinations, was obliged to lease more band acreage to outside businesses like winemaker Vincor International. That worked out well: The long-term security of the lease revenues persuaded banks to lend the band money. Never one to overlook a business angle, Louie also eventually parlayed the landlord relationship with Vincor into a joint venture, Nk’Mip Cellars and vineyard. (Nk’Mip means “valley bottom.”)

Business may be humming on Louie’s reserve but the band doesn’t seem to be spending the money on office buildings. A bumpy side road in Oliver leads to band headquarters—a modest place with the ambience of a construction-site office, complete with squads of efficient-looking white guys huddled over laptops and engineering drawings. Gym-trim and youthful-looking at 53, Louie tends to be a touch imperious with visitors, especially if any of his band councillors are watching. Staffers warn that it’s not a good idea to suggest “going for lunch” because Louie regards going for lunch as a baffling waste of time.

Louie is a serious sports fan and his small, cluttered office is plastered with crests, posters and memorabilia of teams like the Chicago Blackhawks and the Washington Redskins. “I like teams with Indian names,” he chuckles. His interest in sports and teamwork is also expressed in his approach to business and personal achievement. He’s emphatic that working co-operatively with the larger Canadian society is the best way forward for native communities, and he says he’s not hesitant to partner up with outside experts if they have superior credentials. “Some coaches are always talking about the process,” he says. “I’m more interested in the results. I want to see the numbers. I don’t care what colour someone’s skin is. If they can help us reach our goals, I want them on our team.”

People talk about running native businesses the Indian way, but there is only one way to do business and that is the business way.
Clarence Louie

In 1998, Louie and his council, at the urging of Scott, ratcheted the band’s professionalism by establishing the Osoyoos Indian Band Development Corp. Scott was named chief operating officer. Previously, the band’s businesses had reported directly to council. Now the band moved the corporation into a separate building to symbolize its independence from the ongoing fiscal demands of the reserve’s various payrolls and social agencies. As Louie puts it, “People talk about running native businesses the Indian way, but there is only one way to do business and that is the business way.”

The OIBDC hired a team of seasoned non-native business professionals to act as advisers, and the corporation began both expanding the businesses it already had and acquiring others. The roster includes golf courses, vineyards, a campground and RV park, and a gravel and concrete business. On a high ridge overlooking Osoyoos Lake, the OIBDC built the sprawling, elegant, desert-style Nk’Mip Resort. The accommodations portion of the year-round $100-million complex is co-owned and managed by an outside firm (Calgary-based Bellstar Hotels & Resorts). The resort features outdoor pools and a spa, a gourmet dining room and a golf course with a sweeping view of the valley.

Of the band's 32,000 acres, a good third is rich valley bottom bristling with vineyards.

In keeping with Louie’s insistence that all of OIBDC’s new businesses promote the culture of his people, the Okanagan language is employed as much as possible, even on traffic signs. Hikers on the resort’s trails come across a tule-mat teepee, a pit house, a sweat lodge, and signs describing the terrain, wildlife and history of the Okanagan people. Another attraction is Nk’Mip Cellars, the OIBDC majority-owned partnership that has received many prizes for its wines. In 2012, Wine Access magazine named Nk’Mip Cellars the best winery in B.C. and the second-best in Canada. The winery is 49% owned by Constellation Brands Inc., the world’s leading wine producer. (Constellation took over the band’s original partner, Vincor, in 2006.)

“The creation of the OIBDC and the band’s good working relationship with outside investors helped to launch and manage all these businesses,” says Scott. “Separate bookkeeping helped the band see where its revenues were coming from and where its expenditures were going. That not only made it easier to keep track of the money but it dramatically increased accountability and transparency, and allowed us to evaluate each business as a stand-alone entity.”

All the businesses have been turned into limited-liability partnerships to minimize tax and liability risks, and each was required to obtain its own line of credit. “We didn’t want them running to the band every time they got in a cash-flow pinch,” says Louie. “Each business manager is expected to show profits and steady growth, and if they don’t produce results, they’re out the door, just like in the NHL.”

Louie regularly travels across the country, giving speeches and hawking his miracle cure of jobs and economic development to politicians, CEOs and other native leaders. He has enough of a profile in Western Canadian business and political circles that, like a Bono or Adele, he gets by with just one name, as in, “Do you know this guy Clarence?” Unlike other celebrities, he handles his own phone calls and appointments. He doesn’t hesitate to call journalists late at night and invite them to the Osoyoos Reserve so they can see the economic transformation for themselves.

Although that transformation is strongly identified with Louie personally, there is no obvious cult of Clarence adulation on the reserve. “I’m one of Clarence’s biggest critics,” his sister Mona says. “I think he’s too focused on business. But I’ve never doubted his idealistic motives. He’s really driven by the desire to help his people.”

Ronny McGinnis was first elected a councillor back in 1984, in the same vote that first made Louie chief. “He and I don’t agree about a lot of things. He’s bossy and stubborn. He’s too gung-ho on economic development and not enough about spiritual development, but his heart is in the right place. One of our boys was getting in trouble with the law, and Clarence would come around just when he needed support, take him to hockey games, take him up to the Fraser River to catch salmon for the community. He’s like an uncle to all kinds of young people.”

Nathan McGinnis testifies to Louie’s one-on-one help himself. Nathan says he “acted like an idiot” when he was a teenager and almost ended up in jail. The fishing trips with Louie came with a message, he says: Straighten up. “I looked up to Clarence as a role model and it made a big impression that he cared enough to spend time with me.”

With Louie’s support, McGinnis went into a difficult millwright apprenticeship program. At the age of 35, he says he now “definitely has his life figured out,” with two kids of his own and a good job with Constellation as a millwright.

That’s a theme one hears repeatedly at Osoyoos, and it goes some way to explaining why Louie commands respect.

Leona Baptiste, HR director for the band's businesses, is among the young people at the reserve mentored by Louie.

Leona Baptiste says she might have ended up “a complete loser” if it hadn’t been for Louie’s intervention. Like many teenagers everywhere, she ran wild and partied all night.

“Clarence knows every kid in the community. He’s always watching what’s going on. One day he said to me, ‘You’re better than this.’ He told me to come to Prince Rupert, where he was giving a speech to some other native leaders.

“It was pretty cool. I had no idea that Clarence was a widely respected leader. To me, he was just Clarence. But when I watched him speak in front of all these people, it really made me curious. I said to him, ‘Wow, how did you get to be you?’”

At Louie’s urging, Baptiste went back to school and interned at the OIBDC. “Chris Scott was unbelievable with me,” she says. “He didn’t have the extra time to teach a kid the basics, but he still mentored me and was quite stern when I deserved it. I’m so lucky they brought me in. I don’t know where I would have ended up otherwise.”

Baptiste now has her work cut out for her as the OIBDC’s HR director, riding herd on up to 600 employees.

Louie insists that young people need to be busy and active or they get in trouble. Unsurprisingly, the sports fanatic is keen on getting young people involved in athletics; the walls of the reserve school’s gym are appointed with slogans like “Being on Time Shows You Care!” and “Bring Back Our First Nations Working Culture!”

Most nights of the week, Louie can be found in the gym’s weight room, working out on the resistance machines and advising kids on diet and physical fitness. “It’s all about having a purpose in life,” he says. “I think people have it backwards when they emphasize social development over economic development. If you get people working, most of the social problems in a community fade away.”

The B.C. government is building a 378-cell, $193-million provincial prison on land leased from the reserve.

The latest (and biggest) project the OIBDC has attempted is a new $193-million, 378-cell provincial prison, which the B.C. government is building with the band on land leased from the reserve. Chris Scott served as the lead negotiator for the project, which Osoyoos won over a number of competitors. Construction began this spring, and it’s expected that many of the well-paid construction jobs will go to band members.

This project could be where the invincible Chief Louie finally sees his reputation dented. Louie’s campaign to host a provincial jail on Indian land raised eyebrows in native leadership circles across Canada, and some suggested that he’d gone too far in working with white society.

After all, there’s a long and troubled history between aboriginal people and the justice system in Canada, in which jails are seen as a symbol of white oppression. Aboriginals make up about 23% of the prison population across Canada—far more than their 4% share of the general population—and many native leaders say the disparity is driven by racism, police harassment and other systemic injustices. (As one Osoyoos councillor suggests, “It’s because white people can afford better lawyers.”) Cops, prosecutors and others working on the front lines of the law beg to differ, pointing out that aboriginal people commit more than their share of crimes and can’t blame racism when they find themselves in a courtroom.

In 1999, the Supreme Court of Canada instructed judges to look at alternatives to imprisonment for aboriginal offenders. In 2001, the federal government adopted this “supply-side” solution and vowed in its Throne Speech to reduce the number of aboriginal people in the criminal justice system until the percentages were in line with Canadian demographics. According to Correctional Service of Canada statistics, aboriginal offenders now tend to receive lighter sentences than non-aboriginal offenders for crimes of equal gravity, and a myriad of in-house cultural programs, from sweat lodges to native handicraft classes, are designed to make the prison experience more rehabilitative than punitive.

If I have to go to one more jailhouse sweat lodge, I’m going to puke.
Clarence Louie

But even with softer sentencing, the percentage of aboriginal offenders keeps rising. According to a report by Ottawa’s Office of the Correctional Investigator, there has been a 43.5% increase in the federal aboriginal inmate population since 2006. The new prison in Oliver is not designed strictly for aboriginal inmates, but Louie says it’s safe to assume that it will have the usual demographics. He doesn’t believe the prevailing approach to cultural accommodation will make any difference in the long run. “If I have to go to one more jailhouse sweat lodge, I’m going to puke,” he says. “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.”

Ronny McGinnis and Louie’s sister Mona both roll their eyes when Louie gets onto this subject. “He’s too macho,” declares McGinnis. “I know the prison scene, and I’ve always worked with people in trouble. I’ve visited enough jails to know that the average offender is not a bad person. They’re usually scared and lost. They don’t know who they are, and they need help and spiritual guidance before they are ready to get employment training. You need to heal people before you can expect them to hold a job.”

We’re a horse culture, and we’d like to get the inmates working with horses. I think it would be good for them to be outside, learning to deal with these beautiful animals that depend on them every day for food and exercise.

Clarence Louie

Louie shrugs off their criticisms. “They’re a little more touchy-feely than I am, but I partly agree with them, and we’ve been talking with BC Corrections about running some of our own cultural stuff inside the prison. I’m big on programs that teach responsibility, like taking care of livestock. We’re a horse culture, and we’d like to get the inmates working with horses. I think it would be good for them to be outside, learning to deal with these beautiful animals that depend on them every day for food and exercise.” (The idea is not written into the plan for the prison, but BC Corrections spokesperson Cindy Rose confirms that her department “welcomes Chief Louie’s ideas and we look forward to working with the band.”)

The prison will create about 240 full-time jobs, and Louie expects that some of the positions will be filled by his band members. He says he’s well aware that some people think a prison is a bad choice for a First Nations community, but he argues that aboriginal people should be involved in all levels of the justice system—as prison staff, judges, lawyers, police and all the rest. “We need our band members working in that prison as role models. The jail is going to produce full-time jobs, with good benefits and indexed pensions, and I’d rather see my people on the outside of the bars than the inside.”

Assume for a moment that the prison experiment works out and is added to the Osoyoos band’s string of successes. But so what? One of the most common dismissals of the Clarence Louie experiment is that it has no relevance for urban natives, whose situation is very different

By the same token, it’s obvious that most reserves are less naturally endowed than Osoyoos. No one is going to build a resort at Pikangikum or Shamattawa, where sexual assault, suicide and substance abuse define everyday life. But Louie says that every reserve has its own unique potential, and with accelerating development in the North, many First Nations are well-positioned to partner up with outside companies. “You have to exploit whatever potential there is in the area. If you are on the coast, it’s trees and fish. If you are up north, it’s mining and forestry. For us, it’s agriculture and tourism. You let your natural resources tell you what business you’re in.”

The jail isn’t even built yet, but Louie is already planning another project—a plush club and racetrack for car enthusiasts. The Okanagan region has no shortage of retired millionaires with sports cars tucked in their garages, and the proposed Area 27 Motorsports Club will give silver-haired boys a place where they can give their high-performance roadsters some exercise without worrying about a radar trap around the corner. The vice-president of the club, none other than racing legend Jacques Villeneuve, will design the asphalt circuit.

Louie, a car and motorcycle enthusiast himself, says he can’t wait to hear the announcer say, “Ladies and gentlemen, start your engines.”

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