Lax Kw'alaams First Nation is now deciding on a billion-dollar LNG deal announced last week, but the aboriginal community on B.C.'s North Coast has already benefited from years of progressive economic development that has flown under the radar, experts say.
Art Sterritt, executive director for Coastal First Nations, said the Lax Kw'alaams's "straight-up business deal" to buy the logging rights to an area outside of nearby Terrace in 2005 eventually gave it the capital to diversify its economic portfolio, which now includes a handful of other businesses such as a helicopter charter company and a ferry corporation.
The band-owned Coast Tsimshian Resources bought the 518,000-hectare tree farm licence with a $9.8-million loan. When the recession started hurting Canadian lumber exports to the United States, band leadership targeted the East Asian market for its raw logs, travelling to China in 2007 to meet with companies there, and setting up a trade office in Beijing three years later.
Grand Chief Ed John, an executive member with the First Nations Summit, said it was very innovative for the Lax Kw'alaams to set up a trade office in China, something he said no other B.C. band has done.
"You have timber, you need to get it to market – how do you do that? Well, one of the objectives is to set up in the marketplace," Mr. John said.
Mr. Sterritt said the Lax Kw'alaams entered China "real early" and hired Chinese employees that gave them the expertise to navigate the market. "They're pretty fleet of foot – if one market has been difficult to deal with, they'll move on," Mr. Sterritt said.
The Chinese office has since moved to Shanghai, and Coast Tsimshian Resources has partnered with Tidal Coast Terminals to buy debarking equipment for its Prince Rupert log export terminal, allowing it to demand more for its raw logs. Now, it also exports to Japan and South Korea.
Logging brought in $26.2-million in the 2013 fiscal year and $22.3-million the year before that, according to federal filings. "They took a chance on it. It was an educated guess that they could make a go of it, and they've certainly done that in spades – they're one of the major economic drivers in the region," Mr. Sterritt said.
Profit from its logging became the "corner post" of its economic portfolio, and the band, which has about 3,600 people living mostly in the Prince Rupert region, had the flexibility to invest in other business ventures, Mr. Sterritt said.
The Lax Kw'alaams now have interests in five limited partnerships and shareholdings in 16 companies, according to its federal filings. No one from the nation returned calls or agreed to an interview Monday, but its website says the band has invested in a helicopter charter business, a real-estate holding company, the Cost Tsimshian Fish Plant and an Internet and cable TV provider.
Over all, the band was $5-million in the black after the 2013 fiscal year, according to the federal audited filings. Those partnerships have helped create jobs for members of the community and funds to reinvest in a new school, improving infrastructure on the reserve and installing a new pool and community centre.
The community is much healthier than about a decade ago, when high teen suicide rates made headlines, Mr. John said.
"The success is part of a bigger context where First Nations are actually taking advantage of the opportunities that are there," he said.
Members begin voting Tuesday on the $1-billion deal with Petronas, which would pay them over 40 years for their consent to the construction of an LNG terminal within their traditional territories. Voting, done by a show of hands, finishes at a May 12 meeting.