Canada's Indigenous communities, China poised to do more business

Canada Indigenous communities are ready to embrace more Chinese investments, according to an executive at a joint business group.

"The true road to self-sufficiency for Canada's Indigenous people is through economic development, and they are positioned to be full participants in the economy," Sarah Kutulakos, executive director and chief operating officer of the Canada China Business Council (CCBC) told China Daily.

Kutulakos made the comments following the recent release of a report — Preparing Indigenous Groups to Take On the China Market — co-released by Dentons Canada LLP and the CCBC.

The potential for economic activity between China and Canada's Indigenous businesses and communities is "immense", the report said.

China is Canada's second-largest trading partner. It has a large, growing middle class with an increasing demand for energy, natural resources, tourism and agri-food (including seafood), which Canada's Indigenous peoples have in large supply.

China could be a natural source of capital investment for Indigenous communities that need infrastructure to increase their goods output.

Clearwater Seafoods has a long history of successful operations in the Chinese market. As the first Canadian seafood company to open a sales office in China in the mid-1990s, it has generated significant revenue from its Chinese operations.

In 2020, the Mi'kmaq Coalition formed by Indigenous communities in Nova Scotia and Newfoundland and Labrador acquired a 50 percent interest in Clearwater.

Coast Tsimshian Resources owned by the Lax Kw'alaams Band is another example. The company started to sell logs to China, Japan, and South Korea after purchasing timber rights and Tree Farm Licence in 2005.

The company's annual revenues ranged from $12 million to $40 million in the following decade and it produced approximately 120 full-time jobs in logging, trucking, debarking and longshoring. A key part of its strategy was opening a trade office in Beijing.

LNG Canada represents one of the largest energy investments in the history of Canada, and it is a joint venture among several international oil and gas companies, including PetroChina Company Ltd.

The project places a priority on contracting and procurement with Indigenous-owned businesses as well as with local area businesses.

The report found that the cooperation opportunity between Indigenous communities and China lies in dynamic business growth, shared history and cultural affinity, and legal and political factors that provide greater Indigenous control over lands and resources.

There have been numerous trade missions between Indigenous businesses and China in recent years, especially with the "China Strategy" developed by the BC First Nations Energy and Mining Council in 2017. However, the report said, "this has so far been a largely untapped opportunity".

Only 17 percent of Indigenous businesses have clients in markets outside of Canada and US, and there has been only a limited number of successful business interactions between Chinese companies and Indigenous businesses and communities.

The report found that some challenges appear to be impeding Indigenous interaction with the Chinese market.

Despite a number of government programs providing loans and financial support to Indigenous businesses, lack of access to capital and financing is a major barrier to business development and growth in Indigenous communities. There are obvious language and cultural barriers that exist between Indigenous Canadians and their Chinese counterparts.

But none of those problems are "insurmountable", and there are readily available solutions, the report said.

"Although the ongoing discussion between two sides has been disrupted by the pandemic, there is great interest in Chinese investment that can help to build infrastructure, such as in telecommunications, clean energy, or oil and gas," said Kutulakos. "Such infrastructure investment can pay off in terms of improved economic outcomes for the local communities."

Kutulakos said her council plans to do more work to help Chinese investors understand some important elements of Indigenous communities, as well as to help them better understand Chinese culture.

"There are many parallels — for example, both cultures prioritize strong relationships developed over time. But just as in China, where there are regional elements to culture, Canada's Indigenous communities represent diverse cultures across Canada as well. There are different rules and laws if an investment is on reserve land," she said.

"Successfully engaging with the China market will take work, however, the growing and increasingly influential Indigenous business community is well-positioned to take on these challenges, and there will undoubtedly be many more success stories to come," the report concludes.