News & Events
TWCC cuts string to sever tie to government
April 4, 2010
My grin was so wide that people probably thought I had a coat hanger stuck in my mouth when I let the government know it could take its money and ... well, you know.
I am referring to the letter I signed last month as chairman of Tribal Wi-Chi-Way-Win Capital Corporation (TWCC). We had just placed 12th on the list of Manitoba's fastest growing companies and decided we would get out of a federal government support program.
Government support is, at best, a mixed blessing. It can be useful, but usually comes with conditions and restrictions that limit business growth. A lot of energy can be wasted jumping through hoops to satisfy government.
Some non-Aboriginal corporations benefit magnificently by lapping at the public trough - after all it is their governments that set the rules - but for First Nations enterprises, often the objective is to keep us dependent on Big Brother.
TWCC started in 1993. It had a staff of three people and provided financial resources to Aboriginal entrepreneurs who belonged to member Tribal Councils. By 2006 it had 28 employees by early this year TWCC and its two subsidiary companies had more than 120 employees.
One thing that turned me really sour on government involvement was the $15.5 million in loan loss guarantees that Indian and Northern Affairs Canada provided to five hand-picked banks and credit unions. TWCC and other Aboriginal Financial Institutions (AFIs) were excluded from this package.
The loan loss program, which enabled lenders to provide loans to high-risk Aboriginal borrowers, provided non-Aboriginal lenders with a risk-free path into the Aboriginal market. This was especially appalling when money was given to credit unions that have shunned Indigenous borrowers.
The program was brought in quietly, so we have to speculate about the government's reasoning. There were suggestions that AFIs were excluded because they only make small loans, less than $250,000. That argument, however, was untrue. A number of our institutions can loan more.
In this respect, the government's argument is doubly appalling. Not only are non-Aboriginal institutions given an advantage, but they are supposed to use this advantage to concentrate on larger borrowers. It is as if the Indian Affairs wants non-Aboriginal institutions to skim the cream off of the Indigenous business market.
A loan loss program allows lenders to take risks by lending for projects that look good, but could be risky for a variety of reasons. That is the nature of business for entrepreneurs. Usually, if something is a sure thing somebody would have done it already. Entrepreneurs have to be bold businesspeople.
It is also very important that lenders understand the situations of entrepreneurs and the markets in which they do business. This gives Indigenous financial institutions an advantage when dealing with Indigenous entrepreneurs. TWCC has deep roots. In addition to me, TWCC has five board members. Each is a representative of the member Tribal councils: Keewatin, Island Lake, Interlake, Swampy Cree and West Region. Five independent First Nations also belong to TWCC.
The banks and credit unions don't come within a million miles of having these kinds of roots. It is easier for them to deal with one large application than a half dozen smaller applications, because they are not coming from a position of knowledge.
The bottom line is the government wants to put us in a ghetto where we will be treated forever as a lender of last resort. TWCC has shown that it is much more than what had been envisioned and that doesn't sit well with government and Indian Affairs.
They want to us to be children, setting rules for us, not wanting us to grow. Not only can we get along without government support, we will do that and continue to thrive, helping Indigenous entrepreneurs achieve their dreams.
It is worth noting that this attitude may not be universally shared within government. The Conservatives' Aboriginal caucus, which consists of a half-dozen Members of Parliament and Senators, were upset that AFIs had been left out of the loans loss program.
Our approach is the approach that is good for First Nations. Any profit that we don't put back into our business goes to our First Nation members. Banks, meanwhile, channel their profits back to shareholders around the country and beyond.
The letter I signed declining federal funding was for a business support officer program, which TWCC will now operate through its own means. TWCC and other Indigenous businesses must keep working to expand their boundaries.
Grand Chief Morris J. Swan Shannacappo of the Southern Chiefs Organization