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Long before its multimillion-dollar deal to co-own Clearwater Seafoods, the Membertou First Nation in Nova Scotia made historic strides toward economic and territorial growth – and its plans for a brighter future are just beginning

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Since 1984, Chief Terry Paul has led the Membertou First Nation, an urban reserve neighbouring Sydney, Cape Breton's largest city.Photography by Darren Calabrese/The Globe and Mail

There was a time when taxis, pizza delivery drivers and even the police refused to cross the boundary of Membertou First Nation.

The urban Mi’kmaq reservation, on the southern edge of Sydney, N.S., used to be the kind of place many in Cape Breton avoided. It was seen by outsiders, unfairly, as rough, poor and unwelcoming to business. Chief Terry Paul, a residential-school survivor who grew up here in a home without running water, knew it differently. It was his home. And he imagined a better future.

Today, if you want a pizza, or a Vietnamese banh mi, or even sea scallop risotto, you don’t have to leave the reserve. Taxis line up outside the Membertou Trade and Convention Centre and bring a steady stream of visitors to the community’s hotel, casino, health and wellness centre, bowling alley, gaming centre, geothermal-heated arena and dozen other businesses. The Cape Breton Regional Police are here, too, with a detachment stationed in the community.

“When I was growing up, there were absolutely no stores here at all. Everything we got was off the reserve. ... It was so bad here, even the police had a hard time coming up here,” said Mr. Paul, who has led Membertou since 1984. “They all used to avoid this place. Now, they’re all here. They have businesses here. Even the taxis wait for their fares.”

This month, the remarkable four-decade-long transformation of the community reached a new milestone with Membertou’s co-ownership of the largest shellfish producer in North America, Clearwater Seafoods. Mr. Paul orchestrated the $1-billion deal to buy the Halifax-based company on behalf of seven Mi’kmaq First Nations along with Premium Brands Holdings Corp., a specialty food company based in B.C.

The purchase, in quiet development for years, places Membertou and the other Mi’kmaq communities on new footing in the Atlantic Canadian seafood industry. The First Nations coalition, which invested $250-million, will control Clearwater’s coveted offshore fishing licences and get access to jobs and other opportunities that would have been unimaginable a generation ago.

The blockbuster deal, celebrated as the largest investment in the seafood industry by any Indigenous group in Canada, comes at a critical moment for First Nations communities in the region with tensions still high over Mi’kmaq treaty-based fishing rights.

The agreement is part of a generational shift in the way Indigenous communities create economic opportunities for their people. Significant business deals involving First Nations in Canada – from Squamish Nation’s 6,000-unit residential development in Vancouver to Henvey Inlet First Nation’s $1-billion wind farm project in Ontario – show Indigenous leaders are looking to new, long-term revenue sources for their communities.

In Membertou, it’s no different.

“It’s one of those things that changes the entire conversation in the country, forever. It changes the way non-Indigenous people see Indigenous folks in a very positive way,” said Ken Coates, a senior fellow in Indigenous rights and economic development with Ottawa’s MacDonald Laurier Institute for Public Policy. “Membertou has said, ‘We’ll do this ourselves. We’ll create our own opportunities, our own jobs, our own prosperity.’ But you have to look at these deals collectively, because it’s well beyond Membertou. ... I think First Nations have realized the path to equity and prosperity comes from buying back Canada.”

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A Mi'kmaq-language stop sign stands in Membertou. Older residents remember a time when few outsiders would come to this community.

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The Membertou Sport and Wellness Centre includes a public skating rink and indoor walking track, which have been open with physical distancing in place during the pandemic. Nearby is Membertou's conference centre, a hotel and dozens of other businesses.

Chief Paul, a gregarious, grandfatherly figure who was recently re-elected for a ninth term, can’t walk through Membertou without people wanting to shake his hand and talk. And no wonder. Many in this community of approximately 1,700 in northeastern Cape Breton credit him with turning the place into a bustling economic hub.

And while Chief Paul has dreams that a Mi’kmaq CEO may one day sit in the executive suite at Clearwater, his vision for a new Membertou First Nation is already well under way. Between the band operations and more than a dozen community-owned commercial enterprises ranging from the fisheries, hospitality, tourism and casinos, Membertou employs more than 600 people – making it one of the largest employers in the Cape Breton Regional Municipality. It’s also one of the largest property tax payers in the area, and has doubled its land base since the 1980s.

The band, through its corporate division, is one of the most important developers in Cape Breton, using gaming revenues and First Nations financing programs to fund new commercial real estate projects that lure medical and financial services tenants to the community. One of its most ambitious projects is Churchill Crossing, a sprawling shopping and commercial district still in development near the Cape Breton Regional Hospital.

As recently as the 1980s, Membertou was a very different place. People from Sydney didn’t enter the reserve, and its Mi’kmaq residents rarely left, life-long residents say. Even though the reserve is within city limits, there was an imaginary line that divided the two communities.

“That was taught in the homes. We were taught you don’t go into town, and they were taught you didn’t go up to Membertou,” said Graham Marshall, 42, a councilor with the First Nation.

“I remember being young and seeing non-Indigenous people walking on Membertou Street. We were all looking at them, like ‘What are they doing? They’re crazy.’ ”

The racism and mistrust was instilled in people over generations. Mr. Marshall’s cousin is Donald Marshall Jr., the Indigenous fishing rights pioneer who spent 11 years in prison for a murder he didn’t commit in the 1970s. His wrongful conviction exposed, in plain terms, the bias against Mi’kmaq people that existed within the Sydney police and local court system.

Today, Graham Marshall’s teenaged son is best friends with a white kid from town – something he says wouldn’t have happened when he was a child. As economic lines have blurred between Membertou and Sydney, so have the long-standing social barriers.

“It just warms my heart. I have this little white boy coming over to my house and he’s like part of the family,” he said. “That’s the progression that we’ve made.”

The Clearwater deal is the latest step forward, he said, and sends a signal to Mi’kmaq that anything is possible. Suddenly, the people of Membertou have a major ownership stake in the seafood sector, changing the whole dynamic in the industry.

“Back in the day, our parents would say, ‘The sky’s the limit, and you can do whatever you want.’ But being Indigenous, you also knew you could only go so far,” Mr. Marshall said. “Today, we can actually tell our kids the sky is the limit, and there’s no more barriers. There’s no more ceiling.”

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Chief Paul stands next to a new commercial development on the reserve.

Mr. Paul was just a five-year-old boy when he was sent to the Shubenacadie Indian Residential School, a notorious Nova Scotia institution where children were subjected to physical and sexual abuse, poor living conditions, forced farm labour and punished for speaking the Mi’kmaq language.

The experience shaped the rest of his life, but it’s not something the 68-year-old chief likes to talk about very much.

“I know when I try to look back to that time, it just opens up really hurtful and emotional memories,” he told the Cape Breton Post in 2008. “I just remember the little child, the five year-old there, and it’s me. That child in that memory will never grow up.”

The community he returned to after the residential school was racked by unemployment and poor management, with dirt roads and crumbling government houses. Its residents feared the police, had few job or educational opportunities and understood their place in Nova Scotia society. “The only time the police came up here was to arrest somebody,” he said. “We all knew that. I was taught that we always had to run from them. I once asked, ‘Why are we running?’ ”

In the early 1970s, he left Membertou to work for the North American Indian Center of Boston, a non-profit that provides health, job and other social services to Indigenous people. He learned critical administrative and financial management skills and became the group’s director of finance while still in his mid-20s.

He was eventually promoted to the organization’s president before returning home to Membertou. He became the band’s economic development officer in 1981, and then its chief by the age of 30, beginning an uninterrupted political run that has brought stability to the band council for more than 37 years.

As chief, he took over the First Nation with an $8-million budget – and a $1-million annual deficit – with poor accounting to show where money was being spent. He was determined to defy stereotypes about poor, mismanaged reserves.

“I said, ‘We need to get away from operating this way,” he said. “The most important thing in any organization, I feel, is its management, its administration.”

Last year, Membertou reported revenue of $67-million, including money from its fisheries division, property rentals and commercial sales. More than $19-million came from federal government transfers – something the Chief says he hopes can eventually be reduced to zero. He’s among a growing number of First Nations leaders who are trying to get away from a reliance on government funds, Dr. Coates said.

“I’d like to be financially independent from the government, and I’d like our people to be able to look after ourselves. The best example of that would be when we get offered that government cheque, and we can say, ‘We don’t need it. Give it to another community that really needs it,’ ” Mr. Paul said.

To change the community, the Chief and council started restructuring the band’s administration, adopting the principles of efficiency and openness from the corporate world. Membertou became transparent with its finances, and aggressively pro-business, seeking opportunities wherever they appeared. It publishes its financial statements on its website so anyone can see where and how the band spends money.

Mr. Marshall describes the era before Mr. Paul as “like a lost time for our people.” The community was staggered by chronic deficits, overwhelming poverty, substandard housing. The then-young chief began the transformation by altering the way his people approached those fundamental challenges.

“He always envisioned Membertou at its greatest potential, to show that we can do it, and we are capable of doing it on our own,” Mr. Marshall said. “We’ve never liked the word ‘can’t,’ because we’ve heard it all our lives. Instead of just pointing out problems, we’re looking for solutions. He’s been spearheading that for decades.”

Improving education has been a big part of the band’s success. When Mr. Paul took over in the 1980s, high-school graduation rates in the community were about 30 per cent. Today, they’re more than 90 per cent.

Mr. Marshall, who quit school in Grade 10, went to night school as an adult to complete his diploma. The former truck driver says his graduation from Cape Breton University in 2019 was one of his proudest moments. He was the first Mi’kmaq person to sit on the university’s alumni board of directors.

Education is a priority for many families here, but so is being community-minded. As much as Mr. Paul promotes financial sustainability, he and his council also promote programs to help families and preserve the Mi’kmaq culture and language.

“I’ve always told my kids they can be whatever they want to be when they grow up, whether it’s a doctor or an engineer. But they need to contribute to their people, too,” said Mr. Marshall, a father of four whose eldest daughter is now studying engineering at CBU. “They need to leave something behind.”

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A new housing development is under construction on the Membertou First Nation.

As it pursued business partnerships, the band created a separate corporate division with an office on Halifax’s waterfront. It received coveted International Organization of Standards (ISO) status – becoming the first Indigenous government in Canada to be ISO 9001 certified, establishing its credibility in the business world.

To address the housing problem, the band established its own mortgage lending agency, allowing community members to finance renovations and home construction, while building equity. Today, the community is flanked by rows of modern, new bungalows.

Under Mr. Paul, the band also reformed its hiring practices. He began filling Membertou’s payroll with the best people he could find, people with MBAs, commerce backgrounds and law degrees. He didn’t care if they were Indigenous or not. About half of the band’s 600 employees are Mi’kmaq.

One of the most symbolic developments in Membertou’s evolution didn’t happen on the reserve at all. It came in 2015 when the band bought the Sydney Medical Arts office building on nearby Kings Road, and became the landlord to a group of tenants including a pharmacy, medical professionals, a hearing loss clinic and plastic surgery clinic.

A century ago, that building’s land was part of the Kings Road Reserve, the predecessor to Membertou. That historical Mi’kmaq community on the edge of the Sydney Harbour was deemed inconvenient by the city’s planners at the time, and relocated by the federal government to its present-day landlocked location farther up the hill.

The purchase – which once again gave the community access to the water, something it once had for centuries – sent a message to many Sydney residents about how much Membertou’s status had changed. Still, the community’s expansion, particularly land acquisition for development, is sometimes met with opposition, the Chief said.

“We have a lot of people who are suspicious of what we’re up to. It’s always people who aren’t from the reserve,” Mr. Paul said. “We try to buy land, and people say, ‘Yeah, but you don’t have to pay tax.’ We do pay tax, lots of it. And we don’t have a problem paying that. It comes from revenues we made ourselves.”

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A monument marks the spot where the original Kun'tewiktuk - Kings Road reserve stood before its Mi'kmaq inhabitants were made to move away from the waterfront. Now, the Membertou First Nation's real-estate endeavours have brought back some of that land.

The foundation for the Clearwater deal was laid more than two decades ago when Donald Marshall Jr. took his fight over Indigenous fishing rights all the way to the Supreme Court of Canada, Dr. Coates said. The landmark Marshall Decision gave the Mi’kmaq the right to hunt and fish for a moderate livelihood. That, along with federal financing for new Indigenous fisheries, created thousands of jobs and a path for Indigenous people to create their own companies.

That access to the commercial fishery allowed them to begin building partnerships in the business world, he said.

“Twenty years ago, the goal was participation in the economy. They just wanted jobs‚” he said. “Then it became ‘Can we get involved in business?’ They got into the work force and business community in a very substantial way, and now they’re getting into equity.”

The Clearwater sale is the latest in a series of transactions between Chief Paul and Clearwater, which was started out of the back of a pickup truck in 1976 by John Risley and Colin MacDonald. Today, the company is the largest holder of shellfish licences and quotas in Canada, fishing for scallops, lobster, clam, shrimp, langoustine, whelk, crab, and groundfish. It sold $616-million worth of seafood last year.

In March, 2019, Clearwater partnered with 14 First Nation communities, including Membertou, on the surf clam harvest, and agreed to send millions of dollars in benefits to those communities through revenue-sharing agreements. In September, the company agreed to sell two of its eight offshore lobster licences to the Membertou First Nation for $25-million.

Two months later, Clearwater confirmed it was being sold to the Mi’kmaq First Nations coalition, led by the Membertou First Nation, and Premium holdings, which will each acquire half ownership of the company. The deal, recently approved by Clearwater shareholders and expected to close later this month, is as much about good business as it is advancing “reconciliation in Canada,” Mr. MacDonald said.

With Clearwater, the Mi’kmaq will have every opportunity to get jobs, training and be promoted throughout the company, Chief Paul said.

“I’ve always said I want to hire the smartest people I can. I don’t care where they’re from,” he said. “With Clearwater, the opportunities for our community members will be from the deckhand all the way up to the CEO’s office. As long as they’re qualified, they can do that. And we can help get them there.”

It’s not surprising a company like Clearwater would want to sell to the Mi’kmaq, Dr. Coates said. Indigenous business is one of the fastest-growing areas of the Canadian economy. First Nations enterprises tend to reinvest locally, keep revenue in their communities and yet think globally, he said.

“They’re all long-term revenue producers. These are carefully calculated, long-term equity deals that will return very substantial amounts of revenue back to their communities,” Dr. Coates said.

Membertou’s people have long looked to the water to provide for their community. The band’s fisheries department now employs about 50 people, most of them in the inshore snow crab and lobster fishery around Cape Breton.

The community is also pursuing its own moderate livelihood fishery, a right affirmed by Donald Marshall Jr.’s Supreme Court fight. Mi’kmaq communities are seeking changes in federal and provincial regulation that would allow them to sell lobster caught under the Indigenous fishery, solving a problem for Mi’kmaq fishermen who say they’re being boycotted by most of the region’s seafood buyers.

If that happens, the Clearwater sale changes the power dynamics in the Atlantic fishery even further. For now, seafood buyers can only buy lobster from federally licensed harvesters, not bands producing their own licences under the Marshall decision.

“It’s still sinking in, what we’ve been able to accomplish,” Chief Paul said. “We haven’t made any decisions yet around the moderate livelihood fishery. We’re still maintaining that this is a commercial transaction. It’s a Canadian business that has international reach, and we feel we’re in a really good position as a major player in the Atlantic fishery.”

The Clearwater deal clearly opens doors for Mi’kmaq well beyond the boundaries of their communities, the Chief said, allowing them to look at the seafood industry without limitations. The company has operations in China, Britain and around Atlantic Canada, and is focused on growth outside of Canada.

A few years ago, the idea that a group of Mi’kmaq communities could have that kind of global reach in the seafood business might have been hard to imagine. Chief Paul thought differently. “I’d like to take a map of the world, and look at where the opportunities are,” he said. “That’s what good management does. The opportunities are worldwide.”

Photos of victims of the 2020 plane crash in Iran are shown at a memorial service in Edmonton. Chief Paul on what Indigenous leadership looks like

Karl Moore and Wáhiakatste Diome-Deer ask the leader of Membertou First Nation about the Clearwater deal, his upbringing and advice for Indigenous youth.

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