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COTTFN Economic Diversification

Community Development, Governance, & Culture

By Rolanda Elijah for Chippewas of the Thames First Nation

March 2016

CHIPPEWAS OF THE THAMES FIRST NATION ECONOMIC DIVERSIFICATION REPORT

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Disclaimer This Report is meant solely for use by Chippewas of the Thames and is not for circulation without express consent of the First Nation. This Report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of Chippewa of the Thames. Before acting on any advice or recommendation in this Report, individuals should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. This Report is based on information that is considered reliable, but the author does not represent that it is accurate or complete, and it should not be relied upon as such. Opinions expressed are our current opinions as of the date appearing on this Report. This report does not substitute for the professional advice of a lawyer or other duly qualified professional as it may relate to any topic discussed herein. This Report may not be reproduced, distributed or published in any form for any purposes without prior written approval of Chippewas of the Thames.


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Approaches to Economic Development at COTTFN Through its Comprehensive Community Plan (CCP), drafted in 2011 with community consultations, Chippewas of the Thames First Nation (COTTFN) articulated a broad and visionary Prosperity Development to address the socio-economic challenges that are unfortunately similar to most other First Nation communities. The Comprehensive Community Plan uses collectively and community voice to develop goals, priorities and long-term vision for COTTFN. It is a foundational document for COTTFN’s priority-setting process. Being situated in southern Ontario, there have been anecdotal observations at COTTFN that tobacco might be an area of profitability for the First Nation given the economic impacts that tobacco has had on neighboring reserves as a primary employer. In addition, the community is located on the outer edge of the sand plain growing region, known as the tobacco belt, and so community wonders why tobacco growing was never taken up by the community and suggests that given the recent federal tobacco transition program, of 2008, that the timing might be right to enter into the industry.1 For these reasons, and a young First Nation-demographic with high poverty levels, this has put increased pressures on the First Nation to create jobs and revenue and look at the possibilities, including tobacco. The Bear Creek Settlement Agreement and trust that was established in 2014, with settlement terms focused on economic development. This may provide COTTFN with a source of capital for investing in community projects and enable COTTFN to purchase additional land for agricultural use or other business ventures2. It is therefore important for COTTFN to ground truth the anecdotal and really examine the viability of the tobacco sector at COTTFN. As the First Nation moves toward increased independence and self-reliance, the First Nation would like to reduce dependency on government funding. The First Nation also identifies the need for increased capacity in economic development through the creation of a Business Development Corporation, but also to:

Support community members in developing their businesses

Engage in land use planning and strategic land use

Explore joint business ventures with experienced partners, in developing infrastructure

Explore the establishment of a financial institution to help attract investment and fund capital projects

1 In 2008, Agriculture Canada set aside $300 million to ‘buy-out’ farmers so that they would get out of growing tobacco and into other activities and this was aimed primarily at farmers in southern Ontario. 2 Confirm the extent to which COTTFN plan to self-finance the tobacco related activities being considered.


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Leveraging trust funds to finance business development initiatives

Provide incentives while removing disincentives for individuals to participate in business activity/gain employment, and

Develop a strategy in coordination with the Province that will help COTTFN realize revenue in areas such as the tobacco industry

It has been five-years since this work was first undertaken in the CCP and the current Chief and Council will be revisiting the vision and conversations around economic development during the 2015-2017 leadership term. The administration will be sharing what we have learned and developed in the five years of the CCP, and the tobacco technical table has created capacity and insights for the First Nation and this will be shared within that process. Therefore, this report has been written so as to be useful and informative to, not only the Tobacco Table with Ontario, but to begin to develop an integrated understanding of the larger community initiatives that are underway in COTTFN, such as the CCP. About the Economic Diversification Report Following on work previously done by the Province of Ontario – Chippewas of the Thames (COTTFN), in Phase 2, one of the key deliverables is to begin identifying other sectors beyond tobacco to formulate a case for a more general agricultural strategy to create economic benefits outside of tobacco. This report is therefore intended to be critical or perhaps re-cast the issue of tobacco and the approaches to economic development that may assist the First Nation in the refinement and re-examination of the Comprehensive Community Plan, by:

1. Identifying risks and analysis, at a cursory level, of the tobacco industry and to allow the First Nation to further examine the governance issues and the feasibility of the sector through further due diligence and rationale development

2. Introducing the work of the Harvard Project on Indian Economic Development and how this might relate to tobacco and/or the COTTFN CCP

3. Discussing the issue of agriculture, food production and distribution at both the local and regional levels; and

4. Sharing how the South Central Ontario Region Economic Development Corporation has begun its work on point 3.”


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DEFINING ECONOMIC DIVERSIFICATION


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Economic Diversification

Economic diversification is a term that comes directly from the economic sector usually when analyzing larger economies, macroeconomics, but the concept can be applied to the smaller economy, microeconomics, at Chippewas of the Thames.

Applying the concept of economic diversification at COTTFN would start with a description of the current COTTFN economy being driven by a few main sectors: government, retail sales of gasoline and cigarettes, and trust investments that are re-directed back to community through a pension supplement fund for Band Members aged 65 and over; and other grants to community.

Government Sector: Transfer Dollars

The Band Administration is the main employer at COTTFN with approximately 125 employees on the regular payroll and the Band regularly incurs expenses costs for goods and services; and through this spending then sustain other businesses. According to the last audit, for the fiscal year 2014-2015, the First Nation receives approximately $14 million annually in transfer payments and from own-source revenue.

Tobacco Sector: Cigarette Vending

The Marketing and Distribution Report prepared by COTTFN in January 2016 for the Tobacco Technical Table includes information that was gathered as a part of a 2015 survey of business vendors at COTTFN that are involved in the sales of allocation cigarette quotas. At a microeconomic level the cigarette vendors to contribute to the overall micro economy at Chippewas of the Thames by employing approximately 66 people. The Marketing and Distribution Report may be referenced for more specific details about the extent of cigarette vending and tobacco sector at COTTFN.3

3 Marketing and Distribution Report, Darrin Jamieson, Chippewas of the Thames, Tobacco Technical Table Report 2015-2016

DIVERSIFICATION

A strong, growing, sustainable economy is the goal of every nation in the world. A sustainable economy enhances a nation’s standard of living by creating jobs, encouraging the development of new knowledge and technology, and helping to ensure a stable political climate. Having a diverse economy—that is, based on a wide range of profitable sectors, not just a few—has long been thought to play a key role in a sustainable economy. Booz & Co.


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Leakage As a Driver to Diversify

At this point a leakage study has not been prepared by the First Nation and so it is not known how much of this money generated by the two sectors is being recaptured. The current estimate is that it may be approximately $17 million of First Nation funds is being spent in surrounding communities, and not captured by COTTFN businesses.4 Ideally there would be some recapture of these dollars by other businesses that are First Nation-owned; but, it is suspected that there is significant leakage of dollars benefiting neighboring communities and municipalities.

Shifting & Expanding Our Thinking

The leakage of dollars into surrounding communities, points the need for diversification. To stop leakage, as a key goal of its economic strategy, the First Nation will have to continue economic planning and begin to engage in other sectors and activities to create a better foundation for its overall economy.

This requires a shift in our thinking and perhaps expanding on current thinking or strategies that are already being utilized at COTTFN to put us on the right economic track where we can start addressing leakage and moving towards economic diversification.

a) Income Stabilization

COTTFN has been taking on a more proactive role in creating its new economic future by negotiating and settlings its recent Big Bear Creek Land Claim Settlement Agreement. In this agreement, the First Nation voted to accept a reduction in the usual per capita distribution payments to Band Members, in the range of $10,000.00 to $20,000.00 for similar claims by other First Nations, and instead create longer term economic objectives.

The First Nation membership accepted a lower per capita distribution payment of $ 7,500.00, and was able to create its own type of tax-free pension payment fund to its membership aged 65 years and over. Instead of referring to it as a pension, it is called an income stabilization fund and demonstrates the thinking at COTTFN that the nation must take control over and act no differently than other governments that may be creating pension funds for its vulnerable and elderly citizenry.

4 This estimate was shared in October 2014 as part of the Asset Management Workshop held at COTTFN.


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b) Ethical Investment

COTTFN has another trust, Thunderbird Trust5, the trustees have recently taken the approach to investment of trust dollars that there needs to be some attention paid to ethical investments. While this is being undertaken by the trust, it has generated some discussion within segments of Chippewa of the Thames First Nation about what ethical investments might look like for a land claim trust. The objectives of the trustees are to uphold the trust and investments for membership, and there has been some discussion about what publicly listed companies do to the environment or in developing countries to earn money on behalf of our First Nation.

Questions have been raised by our elected trustees, about our role as an investor, in promoting good ethics and best practices, and whether or not our investments are fitting with the values of our community and our people. Since 2012, Thunderbird Trust advanced the idea that our values should be incorporated into our investments. This is relevant to the area of tobacco because similar questions are raised about how we want to be involved in that type of industry from a communal and investment perspective.

c) Asset Management

“A strong case has been made for strategic thinking as essential to

nation building. The definition includes the systematic analysis of

assets and opportunities within the contexts of priorities and

concerns. Strategic thinking encourages the transition from reactive

thinking to proactive thinking. Reactive thinking has characterized

tribal decision making in the absence of sovereignty.”6

October 2015 was the first time that the three land claim trusts at COTTFN, along with the Chief and Council, Senior Management and the Chippewa of the Thames Business Development Corporation met to begin to get a comprehensive overview of the assets at Chippewa.7 This has been the historical trend at Chippewa because as we have identified, most economic activity at Chippewa has been through transfer payments from other governments, and so the First Nation has never used a coordinated asset management approach to how it views the various Band entities.

The entrenched ways of looking at assets in many First Nation communities is based on the idea of Contribution Agreements which allows other governments to make

5 Formerly known as the Clench Fraud Trust. 6 King and Begay. “Promoting Strategic Thinking in American Indian Leaders” Indigenous Nations Studies Journal, Vol 4 No. 2, Fall 2003 p. 55 7 The three land claim trusts are Chippewa are: the Land Claim Trust, Thunderbird Trust, and Big Bear Creek Trust.


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transfers of resources to the First Nation, but these financial resources must usually be spent within a fiscal year and as per the agreement or program guidelines of another government. This is why government is a main economic activity sector at COTTFN.

In the October asset management session, tobacco was discussed as a possible activity area for the future, but it was emphasized that we need to be focused on community-based outcomes with a strategy. Community progress and prosperity requires that we look at our communal resources as vehicles or tools; and that we have not yet viewed these assets from the figurative 40,000 ft. level, to begin to shift our thinking. When we begin to shift to that viewpoint with realistic and longer term timelines to achieve our goals, we realize that what we cannot do individually, or as individual band entities, we may be able to do on a more coordinated and collective basis. It is the dialogue, capacity, strategies, communication and continuing to meet as a collective that will be important to maintain our momentum in this direction.

d) Own-Source Revenue Capacity

One of the outcomes of the Tobacco Project between Chippewas of the Thames and Ontario was a Tobacco Forum in London, Ontario, in May 2014, hosted by COTTFN. Member nations of the Union of Ontario Indians and other participants were invited and were in attendance to hear from different First Nation and Tribal Governments in North America on the issue of cigarettes and taxation.8

One valuable insight that was shared at the 2014 Tobacco Forum, was by Cowichan First Nation, who generates their own-source revenue in a tobacco arrangement with the Province of British Columbia. What Cowichan First Nation shared at the tobacco forum is that once First Nations engaged in a band-owned entity or activity that generates own-source revenue, there is then the need to develop capacity and policies and priorities around the area of own-source revenue.

Chippewas of the Thames has had an own-source revenue process that is internal to the First Nation and has been used to administer the OLG dollars flowing from the First Nations Limited Partnership (OFNLP) Agreement. However, these dollars were usually administered based on an open-call for proposals and were administered based on applications received and issued as a grant to recipients in compliance with the overall OFNLP Agreement.

The example at Cowichan, and their own source revenue process, resulted in a take-away from Chippewas of the Thames because it started a dialogue at the level of Chief and Council about how we may have to begin looking at other models for own-source revenue spending. In our growth and development as a First Nation, we

8 A separate report from Kathleen Lickers has been prepared as a summary of the Tobacco Forum and the event was also video-recorded.


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need to use more strategic models for own-source revenue to accomplish our bigger goals, along with community grants. This was discussed and re-iterated again at the Asset Management workshop in October 2015.

For instance, under the current Big Bear Creek Land Claim Trust settlement agreement, the agreement identifies that own-source revenue generated by the interest on investments of the trust, is to be redirected back to the band administration. Leadership and administration continues to work with community through engagement to identify the best way to use own-source revenue as a way to achieve broader community objectives and outcomes that are identified in its Comprehensive Community Plan.9

This process is new for Chippewa of the Thames and has also started to shift the community’s thinking from spending and reporting to other levels of government; and how we approach our own assets, spending, investment and reporting back to community as a point of accountability.

e) Planning Process and Cycles

The introduction of the Comprehensive Community Planning process in late 2011, has led to the process of dialogue, community engagement, and documenting of community objectives in the CCP.

Tobacco was mentioned in CCP as an idea that could be pursued by the First Nation to address poverty. However, bringing that idea to reality is a more challenging. At different times, the COTTFN Technical Table participants were asked by leadership and community about what practical steps were being taken to determine feasibility in moving toward a raw leaf operation or manufacturing site.

What these questions led to was the creation of a spin-off of the COTTFN Tobacco Technical Table. This is a cross-sectoral table that COTTFN is now referring to as the PLEES table. PLEES is simply an acronym for an internal administrative body at COTTFN that is comprised of Public Works, Lands, Environment, Economic Development and Social departments and it is to examine feasibility of engaging in the tobacco sector.

As was stated previously, that there is strong anecdotal discussion about the viability of Chippewa growing raw leaf tobacco on its reserve lands. The PLEES group combines the capacity of contributing departments at COTTFN to engage in planning toward the necessary steps in economic development including land zoning, land designation, land acquisition; and infrastructure and capital planning to support such a Band-owned enterprise. The PLEES group has met to discuss the development needs of COTTFN, on the basis of technical expertise, to begin to get

9 Chippewas of the Thames Comprehensive Community Plan 2012-2020, July 2014. http://COTTFN.com/wp-content/uploads/2014/03/COTTFN.CCP-Draft.Final_.pdf


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a better idea of the information and land requirements of growing raw leaf tobacco. This information would be used to provide Chief and Council with a better idea of what kind of investment dollars, partnerships, planning, policies and decisions might have to be made to support such an endeavor; including the need for any third party feasibility studies.10

The PLEES group continues to meet to discuss the way forward for in economic development projects and how we might better create a better system for due diligence and project consideration. This type of discussion has been able to happen because COTTFN had already made the shift to housing Lands, Environment and Economic Development into the same building site.

f) Tobacco Diversification

Through the tobacco project we were able to arrive at our current policy in administering the tobacco allocation quota. In preparing for our 2015 submission to the Facilitators of the Allocation Review, we realized that COTTFN is already using diversification as a strategy in the area of tobacco.

One of the criteria in COTTFN self-administered policy is that any Band Member wanting an allocation of cigarettes under the quota system must:

a) be a recognized business with the First Nation through a Band Council Resolution; and

b) that to be a recognized business the person or outfit must sell products or provide a service other than tobacco.

Upon further reflection of this practice at Chippewas of the Thames, the Technical Team came to the realization that this COTTFN policy has helped to control the upstart of random smoke shops throughout COTTFN.

10 PLEES continues to meet and to date has not presented its official findings or recommendations to the Chief and Council about raw leaf tobacco.

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Furthermore, this sends the message to Band Members that as a community we already have expectations of community members and businesses that we want them to do other activities besides selling tobacco. This was also verified by the COTTFN vendor surveys that were carried out by Darrin Jamieson and these findings are discussed and available under a separate report.11

g) Development, Governance and

Culture

The COTTFN CCP is going to be re-examined in the next year. The Tobacco Diversification report and some inclusion of ideas promoted by the Harvard Project on Indian Economic Development and economic development research completed by other First Nations may be incorporated into the newly revised CPP.

The Harvard Project on Indian Economic Development links the ideas of community-context, governance and economic development. Harvard’s research into these topics has shown that that success in economic development is dependent upon finding the right approach that is specific to each tribal community.

Community members at COTTFN have been intuitively making these same linkages between good governance and community-context. In recent discussions through the Governance Committee at COTTFN and other discussions that the First Nation has been engaging, a sentiment is being shared that community and governance development should be occurring in such a way that we allow ourselves to restore our indigenous values even in all sectoral areas of community development.

COTTFN was host to a residential school and our families have been deeply affected by in terms of cultural continuity and survival. Perhaps the most frequently expressed concern in our community development work to date, is that by engaging in community development activities we do not want to facilitate or further the assimilation process, or renew it, by our own design. We want to be critical and self-reflective of the direction that we are going and economic development should also

11 Chippewas of the Thames First Nation (COTT) CMO Business Model, Marketing & Distribution by Darrin Jamieson, January 2016.

One of the most important things Native nations are doing in the development arena is making certain their governance environment can support development—whatever the form or ultimate goal of that development may be. Research from Indian Country and around the world indicates that one of the key factors in development capacity is governance: the rules that human communities put in place that determine how they organize themselves and how they interact with each other and with outsiders"

Begay et. Al. “Native Nation Building”


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be subjected to a community process with safeguards— and promote who we area as a people in a positive manner.

While this thinking is emerging at Chippewas of the Thames, and has been raised in the difficult discussions around tobacco regulations, to date we have no clear communal process of how we would begin to have a conversation on how to integrate development, governance and culture.

“How do you keep those in power from using their power for their own ends and forgetting the nation in the process? How do you protect the community from occasional mistakes in choosing its leaders? What will maintain order in the face of disruption? When crises occur, how should they be addressed? Is there an established way of resolving disputes, one that everyone understands and respects? Who should make which decisions? When someone breaks the rules, how should the community respond?12

Photo Credit: Darrin Jamieson

The issue of self-regulation of tobacco has forced us to ask the tough questions that have already been identified by researchers such as Manley Begay and the Harvard Project on Indian Economic Development. Development, governance and culture are connected and so our processes should draw upon or reflect our Anishinaabeg culture and values.

In 2013, COTTFN engaged in a Traditional Land Use study to capture both historical and current land use by members of our First Nation as Anishinaabeg people. Within this traditional land use study, aspects of our traditional land use economy were captured by the researcher. The mapping prepared for the Traditional Land Use study documents how we make use of local resources as part of our

12 Begay, Cornell, Jorgenson, Kalt “Development, Governance, Culture: What Are They and What Do They Have to

Do with Nation Building” in Rebuilding Native Nations: Strategies for Governance and Development, Ed. Jorgenson, University of Arizona Press, 2007.


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subsistence economy (See Figure 1.1). When looking at that mapping, we can see that our land use is diversified. We provided the researcher with information on different plants, animals, fish and trees that we utilize on our current-day reserve site. We do not just rely on one element in nature, such as fish or deer. To this date, our people are diversified in how they use the land as our ancestors were.13

Utilizing some of the concepts from the Harvard Project on Indian Economic Development will be important for Chippewas of the Thames because once we better document our economic values and traditional values, we can begin to integrate and adapt these views into our current economic strategy and outcomes.

Any process outcome should allow all interested Band Members to be on the same page about how we see the future; and for membership to know that a space was created for them to help shape the future. This will position the First Nation to take action and allow us to balance economic development with our own values and identity. This will solidify the broad-based community support that is needed for larger economic development projects.

Related to this topic, the Chief and Council continue to develop their own capacity on these issues of planning and how that may related to governance. In January 2016, the Chief and Council attended a Governance Workshop in Aamjiwnaang First Nation territory, Sarnia, and spent three days learning about how planning is tied to governance functions of Chief and Councils, as well as in boards where the Nation holds a Director seat. 14

13 Enbridge Pipelines Inc. Application Pursuant to Section 58 of the National Energy Board (NEB) Act

Line 9B Reversal and Line 9 Capacity Expansion Project NEB File Written Evidence of Chippewas of the Thames First Nation National Energy Board OF –Fac – Oil -E101-2012 -10 02 14 A copy of the workshop materials from the January 2016 session is available from COTTFN upon request.


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Figure 1.1 “Traditional Land Use” taken from Preliminary Traditional Land Use Study. Chippewas of the Thames First Nation, James N. Tanner, 2013.


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PRELIMINARY

IDENTIFICATION OF

INVESTOR RISKS

IN THE TOBACCO SECTOR


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I. IDENTIFICATION OF RISKS In the fall of 2015, the COTTFN – Ontario Tobacco Technical Table had produced a number of reports that were intended to inform the work of the group by way of research leading to, at a broad level, law making options at COTTFN, negotiations and an agreement between the parties. At times, throughout the project, it was voiced informally that tobacco is an industry that is waning due to increased public health initiatives that have communicated the risks associated with smoking, second-hand and third-hand smoking. As well, in the popular media, there have been a number of class action lawsuits and litigation that has been decided against the major manufacturers due to the production of cigarette products, and damages awarded to claimants that have suffered directly or indirectly through smoking exposure. It is therefore important for COTTFN or any First Nation government considering entering into this industry beyond cigarette vending to other sector activities such as manufacturing need be aware of the various risks and uncertainties of the risks that can have real-world consequences. Cigarette smoking can cause cancer and this activity is associated with a list of health problems and complications. This information is widely published and advertised, and the COTTFN Health Department and those in the health field will continue to educate and inform the public on those issues, and are not under direct discussion here. The issues identified in this section are those that may relate to either financial, legal, policy, or ethical issues that First Nations might consider, given that tobacco is a regulated product and the jurisdictional and capacity challenges that may be unique to First Nations. These risks may help First Nation decision makers and leadership decide whether or not to help promote this industry, and to pursue economic diversification so that First Nations are not solely engaged in tobacco as an economic endeavor.

A. Uncertainty of Provincial Law On-Reserve

i) Raw Leaf Tobacco

Agricultural activities taking place on reserve lands are subject to First Nation authority and control; and there is may be some measure of federal jurisdiction. We can look to the historical provisions under s. 32.1 of the Indian Act, which have now been repealed, and the lack of provincial authority is demonstrated where:

“Subsection 32(1) of the Indian Act states that ‘a transaction of any kind whereby a band or a member thereof purports to sell, barter, exchange, give or otherwise dispose of cattle or other animals, grain or hay, whether wild or cultivated, or root crops or plants or their product from a reserve in Manitoba, Saskatchewan or Alberta, to a person other than a member of that band, is void unless the superintendent approves the transaction in writing.’


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In addition, section 33 of the Indian Act provides that every person who enters into a transaction that is void under subsection 32(1) is guilty of an offence.”15

Then, in 2014, it was the federal government that repealed these archaic provisions of the Indian Act and highlights the lack of provincial authority to restrict or govern agricultural products that are grown on an Indian reserve. Many agricultural sectors in Ontario and Canada, have been heavily influenced by self-regulating marketing boards that have overseen the production, marketing and distribution for raw produce, eggs, and dairy industries and tobacco has been no different until very recently. Moreover, there has been some institutional inequity within these marketing board structures as they were generally not inclusive of First Nations in the distribution of quotas and subsidies as a general societal trend in most public institutions.

Prior to January 1, 2015, it was the Ontario Flue-Cured Tobacco Growers' Marketing Board, an industry body, which had oversight of raw leaf agricultural activity in Ontario for areas other than Indian reserves and federal land. Given that the Indian Act is the primary legislation governing Indian reserve lands; and that the provincial sector has been industry-led it has been very difficult to monitor raw leaf production on reserve. Conversely, any raw leaf product produced off-reserve and brought to a reserve-based manufacturing facility was also difficult to monitor. In relation to raw leaf tobacco, raw leaf tobacco product that is grown in the Province of Ontario is not taxed, and so it is not subject to the Ontario Tobacco Tax Act for the purposes of tax collection. The raw leaf tobacco industry, however, is still subject to the Act and falls within the jurisdiction of the Ministry of Finance as of January 1, 2015. According to their website, the Ministry of Finance requires raw leaf producers to “register” and acquire a registration certificate to be able to grow the product, and there are some exemptions.16 This same application is used to register as a dealer, if a person or business intends to sell their product in Ontario. In order to sell the product in Ontario, raw leaf product can only be sold to a provincially recognized and registered dealer or exporter. This is because the regulator wants to be better positioned to monitor the product and to limit product diversion toward outfits that may be engaged in what it sees as provincial tax avoidance activities within the cigarette manufacturing sector.17 Notably, however, most of these outfits are situated on First Nation territories or Indian reserve lands within the meaning of the Indian Act.

15 http://ca.vlex.com/vid/bands-operation-section-indian-exempting-76479696 <Accessed: January 5th, 2016> 16 http://www.fin.gov.on.ca/en/tax/tt/rawleafproducers.html <Accessed: January 5th, 2015> 17 Note that this is one of the points of contention between First Nations and the province of Ontario. Cigarette manufacturers on-reserve may be compliant with federal law, namely the Excise Tax Act, by virtue of being situated on federal land and case law. Cigarette manufacturers on reserves may be paying federal taxes. With regards to provincial taxes, First Nations would argue that provincial laws and taxes do not apply to cigarettes on federal lands because it is not subject to provincial jurisdiction.

http://ca.vlex.com/vid/bands-operation-section-indian-exempting-76479696

http://www.fin.gov.on.ca/en/tax/tt/rawleafproducers.html


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Now that the industry body, the Flue-Cured Tobacco Grower’s Marketing Board, is obsolete as an oversight agency for raw leaf; and has been directly placed within the jurisdiction of the Ontario Minster of Finance, there are some new uncertainties. For instance, s. 88 of the Indian Act still appiles, which may be used to import the newly enhanced provincial laws, whether or not First Nations agree. Under s. 88 of the Indian Act, it reads:

88. Subject to the terms of any treaty and any other Act of Parliament, all laws of general application from time to time in force in any province are applicable to and in respect of Indians in the province, except to the extent that those laws are inconsistent with this Act or the First Nations Fiscal Management Act, or with any order, rule, regulation or law of a band made under those Acts, and except to the extent that those provincial laws make provision for any matter for which provision is made by or under those Acts.

First Nations had a better argument to challenge provincial authority when government had a less direct role in the industry, under the marketing board oversight. Now, however, a stronger argument can be made, in the absence of any First Nation developed laws about the application of provincial jurisdiction. In particular, those aspects of provincial law that cover the activities that result in the movement of raw leaf product in any off-reserve geography has been somewhat strengthened for the province in an adversarial context. Analysis:

Any real or perceived economic advantage, regarding non-taxation or oversight of the tobacco industry on a reserve, is subject to some risk due to jurisdictional uncertainty stemming from these new changes to the Tobacco Tax Act for the oversight of raw leaf. While the legal debates between First Nation and Ontario are ongoing, it is expected that Ontario will continue to conduct searches of consumers on the outskirts of First Nations which sometimes leads to seizures of the movement of non-provincially registered, certified, or designated raw leaf.

While there is a compelling argument to be made here about jurisdictional authority vis-à-vis First Nations and other levels of government, at the time of writing of this report, COTTFN does not have widespread raw leaf production occurring, and may have no immediate financial interest to fuel any particular legal dispute or challenge. Other First Nations may be more compelled and have those vested economic interests and factual circumstances to move in that direction more immediately than COTTFN.

The issue of economic diversification is important, in terms of examining other agricultural production besides tobacco, because the tobacco industry has become more regulated, not less regulated, with inherent legal risks. There are other agricultural production activities that are not as heavily regulated as tobacco, not to mention labour-intensive and needing of high

https://www.canlii.org/en/ca/laws/stat/sc-2005-c-9/latest/sc-2005-c-9.html


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capital costs to enter the industry, and First Nation producers may have an easier time marketing these other products.

ii) Anti-Smoking Legislation & Public Awareness The World Health Organization (WHO) is one of the leading international organizations on the issue of developing effective tobacco controls to protect human health. The WHO Framework Convention on Tobacco Control is an international treaty between nation states on the issue of tobacco control. Canada entered into this Framework by way of resolution. In Annex 1 of the WHO Convention on this Framework Agreement, the introduction of the resolution reads as follows:

The Fifty-sixth World Health Assembly, Recalling resolutions WHA49.17 and WHA52.18 calling for the development of a WHO framework convention on tobacco control in accordance with Article 19 of the Constitution of WHO; Determined to protect present and future generations from tobacco consumption and exposure to tobacco smoke; Noting with profound concern the escalation in smoking and other forms of tobacco use worldwide; Acknowledging with appreciation the report of the Chair of the Intergovernmental Negotiating Body on the outcome of the work of the Intergovernmental Negotiating Body; Convinced that this convention is a groundbreaking step in advancing national, regional and international action and global cooperation to protect human health against the devastating impact of tobacco consumption and exposure to tobacco smoke, and mindful that special consideration should be given to the particular situation of developing countries and countries with economies in transition;18

This excerpt is important when we look at the issue of tobacco control and the prospect of First Nations creating a tobacco regulatory code, law or by-law that will mirror or equal provincial laws. It is this international framework and health evidence that is the international driving force for tobacco control, and this would include Canada and the province of Ontario.

18 http://apps.who.int/iris/bitstream/10665/42811/1/9241591013.pdf <Accessed January 5th, 2015>

http://apps.who.int/iris/bitstream/10665/42811/1/9241591013.pdf


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The Smoke-Free Ontario Act19 is the most comprehensive legislative framework that the Ontario government has enacted to prevent smoking as a habit-forming addiction and to protect public health. Prior to the international approaches to tobacco control, workplace policies were the first forms of smoking prohibitions; and then municipal by-laws emerged with varying success. Provincial laws and municipal by-laws are geared towards smoking prohibitions in most public places and spaces. Under Smoke-Free Ontario Act there are even restrictions on smoking in private vehicles with children under the age of 16.20 Through the Chippewa and Ontario Tobacco Technical Table, the First Nation has learned a lot about how taxation levels under the Tobacco Tax Act, packaging practices regulated by the federal government, retailing practices, and age restrictions are also in effect under federal, provincial law and municipal by-laws. As a result of anti-smoking laws and prohibitions, and the increasing public awareness of the negative and morbid health effects of smoking, there is a general downward trend in smoking rates in the general public. Generally, the overall customer base and demand for cigarettes is declining and consumer behaviours and decision making is directly affected by government initiatives and intervention. Given that the provincial government is fiscally responsible for the health care system, government intervention is not expected to change because the negative effects of smoking will have an effect on the health care system. This is information and evidence that First Nations leadership and businesses cannot ignore over the long term in terms of economic planning. Analysis:

Cigarette sales and the tobacco sector, may have been profitable for some First Nations businesses in the past, the long-term trend may not provide any real growth in terms of a consumer or customer base in Ontario. As was pointed out in the report by Kathleen Lickers and Peter Griffin, two facilitators hired in 2015 to engage First Nations on the Tobacco Allocation system in Ontario, the economic advantage that First Nations have had in cigarette sales is that provincial levies or taxes are not being applied to cartons of cigarettes being sold on reserve, and this would generally apply to quota allocation cigarettes and native-manufactured cigarettes.21

This means that the major profit margin in the sale of cigarettes on-reserve is the price differential between cartons of cigarettes that are sold off-reserve with the applicable provincial and federal taxes. It is rational, therefore, that

19 Smoke-Free Ontario Act, S.O. 1994, CHAPTER 10 20 Ibid. 21 “Review of the First Nations Cigarette Allocation System in Ontario” Lickers and Griffin http://nebula.wsimg.com/53d9d4b481de9893886edff0de2d1e35?AccessKeyId=1960850144570F02FFA5&disposition=0&alloworigin=1 <Accessed: January 6th, 2016> p. 7

http://nebula.wsimg.com/53d9d4b481de9893886edff0de2d1e35?AccessKeyId=1960850144570F02FFA5&disposition=0&alloworigin=1

http://nebula.wsimg.com/53d9d4b481de9893886edff0de2d1e35?AccessKeyId=1960850144570F02FFA5&disposition=0&alloworigin=1


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First Nation leadership and business community look at other markets and business opportunities where there may be potential for real economic growth, as the current model is based on an existing customer base that is in decline and vulnerable to any reductions in provincial taxation levels. To further elaborate, any tax reductions made on behalf of the provincial government could reduce the price competitiveness of the First Nations’ sale of allocation quota sales to non-Status Indian persons and native-manufactured cigarette sales as well.

B. E-Cigarettes

E-cigarettes are electronic delivery devices that are relevant to the discussion area of

tobacco and smoking because it is an alternative way for nicotine to enter into a person’s

body instead of utilizing a traditional cigarette.

Raw leaf tobacco is not used in an e-cigarette. Instead, the smoking devices may resemble a cigarette but is actually shaped like a pen, with an open-ended tip for puffing the way that one would traditionally draw in smoke from a cigarette. The puffing actions triggers a small heating mechanism inside the e-cigarette to heat a liquid solution, called

“juice” which may or may not contain nicotine, and creates a vapour. The e-juice or e-cigarette solutions are made propylene glycol or glycerin, sometimes flavouring agents, and possibly nicotine.22 There are health claims in relation to e-cigarettes and vaping, versus smoking, because there is no combustion to create the smoking effect and so the claim is that they are safer to use than cigarettes. Some manufacture and sales claims have gone so far to state that e-cigarettes can be used as an aid to quit smoking or the better alternative to smoking.

To date, these claims have not been substantiated and at the moment there are few regulations. The harm reduction benefits are still being researched, but some U.S. studies have shown 2% reduction in the number of overall smokers and this is perhaps somewhat attributed to the e-cigarette, and this was mentioned in a March 2015 Parliamentary Report, entitled “Vaping: Towards a Regulatory Framework for E-Cigarettes”.23

22 http://www.tobaccoreport.ca/2015/TobaccoUseinCanada_2015_EcigaretteSupplement.pdf “Tobacco Use in Canada: Patterns and Trends Special Supplement: E-cigarettes in Canada, Centre for Population Health Impact, University of Waterloo <Accessed: January 15th, 2016> 23 http://www.nsra-adnf.ca/cms/file/files/412_HESA_Rpt09-e.pdf “Vaping: Towards A Regulatory Framework for E-Cigarettes” Parliamentary Standing Committee on Health, March 2015 <Accessed: January 16th, 2016>

http://www.tobaccoreport.ca/2015/TobaccoUseinCanada_2015_EcigaretteSupplement.pdf

http://www.nsra-adnf.ca/cms/file/files/412_HESA_Rpt09-e.pdf


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Analysis:

If there is some benefit to e-cigarettes, in terms of harm reduction or an alternative to traditional smoking, then there will be attempts by other levels of government, both provincial and federal, to regulate this product. This creates some uncertainty for any proponent of raw leaf tobacco or cigarette manufacturing that is relying on existing and/or new smokers to smoke regular cigarettes. The Parliamentary Report also mentioned that cigarette manufacturing and tobacco companies are in buying vape cigarette manufacturers as an economic strategy.24 This is perhaps a means of diversifying their own product mix. It is important for the First Nation to be aware of this trend and note the uncertainties of this market as a risk for entering into this industry as an investor or community investment. C. Civil Litigation & Lawsuits

a) Harms from Smoking and Addictiveness

In June of 2015 a Quebec judge ordered that the three largest cigarette producers were to pay out over $15 billion in damages: Imperial Tobacco ($10.5 billion), 20 per cent to Rothmans, Benson & Hedges ($3.1 billion) and 13 per cent to JTI-Macdonald ($2 billion).25 The claims against the tobacco companies were that the cigarettes caused harm; and that tobacco companies actively hid from the public the adverse health effects from cigarette smoking, for more than 50 years. This claim was heard along with claims from others seeking damages for the tobacco companies’ failure to disclose the addictiveness of smoking cigarettes. The decision was delivered in favour of those seeking damages from the tobacco companies, despite the defense from the tobacco companies that adequate warnings on cigarette packages have been appearing for over 40 years.

b) Provincial Legislation and Lawsuits

According to the Ministry of the Attorney General website, Ontario passed legislation in 2009, called the “Tobacco Damages and Health Care Costs Recovery Act”. This legislation allows Ontario to pursue tobacco companies for damages as the province of Ontario is the major contributor to the health care system.

24 Ibid. 25 “Judge awards $15-billion to Quebec smokers in landmark case against tobacco” Globe and Mail. giantshttp://www.theglobeandmail.com/news/national/judge-awards-15-billion-to-quebec-smokers-in-landmark-case/article24730833/ <Accessed: December 1, 2015>


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Ontario is seeking to recover $50 billion in damages “for the past and ongoing health care costs liked to tobacco-related illness, caused by a breach of duty on the par of the tobacco companies.”26 Ontario states, that, according to its Statement of Claim, that the tobacco companies:

“knew about the addictiveness of cigarettes and the health damages they caused

deceived the public by misrepresenting the risks

failed to warn the public about the dangers of smoking

promoted cigarettes to children and teens

did not take all available steps to reduce the risks caused by their products.” Ontario is going back to the year 1953 to present, and names 14 defendants in their suit and includes “companies that currently manufacture and sell cigarettes in Ontario or who have manufactured and sold cigarettes in the province over the period relevant to the action”. Analysis:

Cigarette smoking and second-hand smoking is harmful to human health. The tobacco companies raised the defense that there was packaging to warn consumers about the dangers of smoking; and that tobacco has been government regulated. The law is currently not in favour of tobacco companies. If COTTFN is interested in entering the industry, then it is important to be aware of the civil litigation and to keep abreast of the developments in the provincial law suit and assess where we are in relation to that law suit. If we become more involved in the sector, as a seller or manufacturer, then this may increase our vulnerability to becoming subject to a suit, or for failing to protect Band Members health.

26 https://www.attorneygeneral.jus.gov.on.ca/english/tobacco_litigation.php <Accessed: January 8th, 2016>

https://www.attorneygeneral.jus.gov.on.ca/english/tobacco_litigation.php


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ECONOMIC DIVERSIFICATION:

Agri-Food and Southern Ontario


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Agriculture Activity at Chippewas of the Thames

The current land base of Chippewas of the Thames covers approximately 10,000 acres of land and the community has had an active history in farming and some lands at COTTFN are used for farming today.

Farming, as a main economic activity at COTTFN, has drastically declined in the last 25 to 30 years, and this is no different than the general societal trend in Southern Ontario of fewer and fewer families that farm. There are a number of reasons for this trend and

that is a separate topic for research and discussion.

What COTTFN Band Members did take note of, however, was the potential for an opportunity after the 2008 federal buyout of tobacco farmers in the area. This federal buyout was intended to reduce the supply of raw leaf tobacco because tobacco is a harmful product. This action by the federal government resulted in some interest at COTTFN to replace those tobacco farms as raw leaf producers, due to the market supply gap that was created by the federal buyout and connected to native cigarette manufacturing.

As compared to other agricultural products, tobacco does have a higher margin for profit, especially when combined with cigarette manufacturing activities. This interest in raw leaf tobacco growing led to market research being completed by Darrin Jamieson for COTTFN as a part of its Tobacco Technical Activity.27

This interest in growing raw leaf tobacco is related to potential profit but also likely due to the location of the Chippewas of the Thames which is situated on the Thames River. The river is a source of raw water for irrigation activities, and the reserve land base has various soil types, some of which would be suited to the growing of raw leaf tobacco, as it historically has been viable to grow other crops at COTTFN. However, the most ideal growing areas for raw leaf tobacco are on the COTTFN river flats, located near the Thames River, in addition to other COTTFN land holdings that are not in the flats.

There are some challenges with entering into raw leaf tobacco production, and those issues are discussed in the separate report that was produced for the COTTFN – Ontario Tobacco Technical Table. This section of the report is to provide the community with ideas about what is possible outside of tobacco growing, for diversification opportunities, and there resources that could support further COTTFN research should

27 Darrin Jamieson, COTTFN as a Grower/Early Stage Processor, Economic Models, 2013-14.

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the First Nation decide to move in the direction of the agri-food sector because ofhte natural agricultural features of COTTFN lands.

Food Desert, Access to Food and Food Security

We have previously introduced the idea of economic leakage, meaning that dollar for dollar, most of the wealth and income at COTTFN is spent in neighbouring communities. One of the strategies that could be used to stop economic leakage is to identify an area where a good or service could be provided at COTTFN so that Band Members or consumers are motivated to spend their money at COTTFN rather than in neighbouring communities.

One area that is glaring, and requires community capacity to begin to understand the seriousness of the issue, is that of a food desert and the need to provide membership with access to fresh fruit and vegetables and food. The importance of this is so high that the United States government has started to track and map out food deserts because of its relevance to quality of life and general well-being of people.28

The main criteria used to classify a community as a food desert is distance

from or concentration of nutritional food retailers. Distance is measured

from centroid of an area (by zip code, census tract, or block) to nearest

supermarket or grocery store. Standards of access and methods of

measurement vary among researchers to determine food deserts; some

researchers classify food desert areas as those one to ten miles away from

the nearest supermarket.[17] To meet the criteria to be considered a food

desert by the USDA standards are a "low-access community", at least 500

people and/or at least 33 percent of the census tract's population must

reside more than one mile from a supermarket or large grocery store (for

rural census tracts, the distance is more than 10 miles). The concept

behind this is if it’s reasonable for a shopper to be able to carry groceries

one walking mile.29

Based on this criteria, Chippewas of the Thames would qualify as a food desert because community resides more than 1 to 10 miles (1.6 to 12 km) from a large supermarket or large grocery store and do not have access to transportation. There are a number of families and individuals that are on social assistance and COTTFN has been operating a foodbank imitative called the Anishinaabeg Food Right, which is used to provide food to families in need and trying to incorporate cultural values in how we value food. As well, the social assistance department and community volunteers within

28 Why Introduce a New Mapping Tool? United States Department of Agriculture Economic Research Service. http://www.ers.usda.gov/data-products/food-access-research-atlas/why-introduce-a-new-mapping-tool.aspx <Accessed: January 21, 2016> 29 Wikipedia. Food desert. https://en.wikipedia.org/wiki/Food_desert <Accessed: January 8, 2016>

https://en.wikipedia.org/wiki/Food_desert#cite_note-17

http://www.ers.usda.gov/data-products/food-access-research-atlas/why-introduce-a-new-mapping-tool.aspx

http://www.ers.usda.gov/data-products/food-access-research-atlas/why-introduce-a-new-mapping-tool.aspx

https://en.wikipedia.org/wiki/Food_desert


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COTTFN have been regularly planting a community garden to assist families with access to food and encourage family gardens.

Historically, our people built their whole migration patterns and way of life based on the seasonal cycles and availability of food. This has been documented in the research completed by Professor Neal Ferris for the Big Bear Creek Land Claim and the Preliminary Traditional Land Use study by Dr. Jim Tanner in 2013, and based our own collective knowledge and memory.30

“This Study confirms that a seasonal pattern of land and resource use

continues to exist today. It confirms that COTTFN members harvest a

variety of locally and seasonally abundant resources, including several

species of fish, deer, muskrats, raccoons, skunks, rabbits, squirrels, birds,

medicinal plants, berries, fruits, nuts, and vegetables. Harvested resources

provide important sources of calories for COTTFN members. They are also

used for traditional and ceremonial purposes. Traditional harvesting

practices continue to be important features of COTTFN’s culture. It was

evident from my interviews that many of the interviewees maintain a deep

spiritual connection to the lands and waters in their traditional territory,

and their relationship with the environment continues to inform their sense

of self and how they view and relate to the world around them.31

It is important to link our past connection to food access, and agricultural production to the present-day needs. We need to plan for an approach that will result in local food sources but also as a more economically diverse community .

In the past we would have regularly migrated to various geographical areas carry out our seasonal customs as a means of accessing and securing food to ensure our survival. That tribal custom is more difficult because we are now geopolitically fixed at the current reserve site. We need to solve the problem of food accessibility for 2016 and beyond. An economic development initiative that seeks to fill a social need, but does so for a profit or to break even is called a social enterprise. These types of initiatives should be given consideration in addition to other initiatives such as the prospect of growing raw leaf tobacco or other cash crops.

Securing food for families in today’s context can be complex because we live in a

capitalist and global economy that only recently looks to sustainable development. The

World Health Organization states that food security means that a population has access

to “sufficient, safe, nutritious food to maintain a healthy and active life… commonly, the

concept of food security is defined as including both physical and economic access to

30 Preliminary Traditional Land Use Study. Chippewas of the Thames First Nation, August 5, 2013, Eagle Sun Consulting Dr. James N. Tanner, PhD 31 Ibid at 16.


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food that meets people's dietary needs as well as their food preferences. In many

countries, health problems related to dietary excess are an ever increasing threat….”32

Given our location, and socio-economic challenges, food security is an issue at

COTTFN. This is exacerbated because the First Nation also does not have an

emergency plan. If a natural disaster were to occur, such as an extended loss of

electricity, or transportation in North America, COTTFN would be very vulnerable. This

needs more consideration and economic development needs to be inclusive of social

enterprise but also consider the more fundamental issue of survival of the First Nation.

THE CHIPPEWA ANNUAL ROUND

Figure 1.3 “The Annual Round” taken from Preliminary Traditional Land Use Study. Chippewas of the Thames First Nation, James N. Tanner, 2013.

32 Food Security. World Health Organization. http://www.who.int/trade/glossary/story028/en/ <Accessed January 8, 2016>

http://www.who.int/trade/glossary/story028/en/


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Agri-Food Business and Research in Southern Ontario

There are invaluable resources available that can assist with community planning in

looking at fulfilling a social need, a need for access to food, with an economic

development venture.

i. University of Western Ontario, Ivey Institute

Directly from its website, the University of Western Ontario, Ivey Institute, has a research chair that examines agri-businesses topics from a research perspective.

Agri-food@Ivey aims to be Canada’s leading source of accessible and relevant knowledge about agri-food innovation and policy. We envision a competitive and sustainable Canadian agri-food sector where firms and farms contribute to society.

Agri-food@Ivey is a research unit under the Chair of Agri-food Innovation at the Ivey Business School at Western University in London, Ontario.

The website for Agri-food@Ivey, http://sites.ivey.ca/agri-food/about/, showcases a number of research reports that would be useful to COTTFN in supporting any concepts or proposals that the First Nation wishes to develop and to become better aware of the surrounding agri-food industry.

Some of the research at Western may be highly specialized but there are topics covered that we may find useful at COTTFN. A useful Powerpoint presentation by the Ivey Institute is entitled “Integrating health and agriculture considerations along value chains to meet food and nutrition security for all” and this was presented at a Health and Economic Convergence Think Tank in 2009. The concepts that would be relevant to COTTFN if we decide to move out of a food desert toward addressing food security goals.

Also of interest is another Powerpoint presentation “Translating Nutrition Research Into Economic Opportunities—Health Food Innovations, Media, and Agri-Food Chains”. This is a high level overview of food chains and connecting this to discussions around health and disease. This is highly relevant to the socio-economic issues of COTTFN; but also in looking at the possible solutions. COTTFN could create value food chains that incorporate aspects of culture in branding and health messaging while engaging in an economic development activity.


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ii. University of Guelph, Food Research

The University of Guelph has a website for The Food Institute, which conducts research and publishes information. The Food Institutes mission is as follows:

Our Mission

The Food Institute of the University of Guelph is to be a world leading portal for food knowledge and expertise through industry extension and training to drive understanding, innovation and action on local and global food issues with its partners.

Our Vision

To change and improve lives through food.

Our Purpose

The global food landscape is changing rapidly. The Food Institute of the University of Guelph will serve to:

Meet the increasing population growth’s appropriate need for food.

Assist and support the demand to find solutions in the increasing challenges of food and lifestyle related disease.

Assure the economic, nutritional and environmental sustainability of the food supply chain.

Support the need for governance to ensure trust, protection and integrity throughout the supply chain.

Some of the topic areas that may be relevant to any future work to be done at COTTFN may be covered by the Food Institute project areas, which are:

Consumer Behaviour / Consumer Protection

Food additives

Food Policies

Food Processing

Food Safety

Food Science

Food Security

Food Technology

Genetics 173

Health Foods

Microbiology / Toxicology

Nutrition

Quality Controls / Traceability


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iii. Ontariofresh.ca

There are numerous online resources available for research into locally produced food, even where you may be able to purchase it. Ontariofresh.ca is an online network and marketing service designed to help Ontario businesses buy and sell more local food. The organization connects the food value chain to get more local food to Ontario consumers and is funded by the Ontario government.

Food Value Chain The Ontario Ministry of Agriculture, Food and Rural Affairs, identifies an agri-food value chain as a designed network that seeks to:

“increase competitive advantage through collaboration in a venture that links producers, processors, marketers, food service companies, retailers and supporting groups such as shippers, research groups and suppliers.* A Value Chain can be defined as a strategic partnership among inter-dependent businesses that collaborate to progressively create value for the final consumer resulting in a collective competitive advantage.

The basic characteristic of a Value Chain is market-focused collaboration; different business enterprises working together to produce and market products and services effectively and efficiently. Value Chains allow businesses to respond to the marketplace by linking production, processing and marketing activities to market demands.”33

Value chains and their increasing use is in direct response to a competitive global food market, but also in response to consumer behavior and demand for local foods. The Ontario government also promotes value food chains, through legislation, the Ontario Local Food Act.34 COTTFN does not have to do all activities from A-Z, in terms of food production, but should begin to identify what produce it would like to grow and sell, and then which customers it could serve, like a local daycare, school, or long-term care facility, on a pilot-basis. Cultural-based perspectives could be incorporated into the business planning, marketing and branding. Alternatively, there are a number of retail outfits that serve as viable models, which could be used to generate a revenue stream for off-reserve consumers which could help subsidize COTTFN local food costs; for the First Nation could establish a similar retail facility to service the three communities of Chippewa, Munsee, Oneida; and

33 Value Chains in Agriculture, Food and Agri-Products Sector. “http://www.omafra.gov.on.ca/english/food/valuechains.html <Accessed: January 9, 2016> 34 Local Food Act, 2013, S.O. 2013, c. 7


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neighbouring non-First nation communities. These are also built on the concept of food value chains.

i. Farm Boy There are approximately three Farm Boy locations in London, Ontario. This food market focuses on fresh, organic, artisanal, local, gluten-free and grain-fed meat. The store is well-lit and features: a ready-to-eat and hot-foods section, salad bar, seafood, dairy, bakery and meat sections. Fruit and vegetables are a mainstay of Farm Boy. Farm Boy has its own brand of a number of products including condiments and a bulk food section. Food trends are featured in display and product packaging. To encourage a local community connection, Farm Boy has a Kitchen Cupboard, area where patrons may sit to drink their coffee or enjoy their purchased food products. Ontario produce and meats are actively promoted in the store, as grain-fed, and 100% Canadian beef.

Photo Credit: Rolanda Elijah

ii. Remark

Remark stores are located in London and Windsor Ontario. This food market has been in the area a little bit longer than Farm Boy so the décor is a bit more dated. The square footage is slightly smaller than Farm Boy, but focuses heavily on fresh fruits and vegetables. Remark features bakery, deli, seafood and a number of local producers for items such as condiments, canned foods and preserves that are either Ontario or Canadian made. Remark has its own-brand, heat- and-serve casseroles and dishes such as quiche and meatballs, with grain-fed poultry and beef, gourmet pizza and also has a small housewares section for ceramics, dishcloths and cooking utensils. Photo Credit: Rolanda Elijah


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iii. Sunripe

Sunripe is a fresh food store featuring fruits and vegetables with old-fashioned weigh stations for customers. There is a seafood, bakery section, and juicing section to the store. The stores features dips, sauces, and heat-and-serve dishes that it makes on site and sells under its own label. The store is well thought out because it has a dock loading area for shipments that are regularly coming in from the Toronto Food Terminal and local farms etc. A nice feature of this store is that it has a local jams and preserves section that is provided by an Amish family in the London area. Photo Credit: Rolanda Elijah

Potential Opportunities There are a number opportunities to be a part of a food value chain, as an alternative to tobacco, for COTTFN. COTTFN has the land base, soil conditions, transportation networks to move into agricultural, food and retail establishments through the creation of its own value chain; or to become a part of an existing one. There are also two active farmers markets in the area, and this the Western Fair Farmers Market and at the Covent Garden Market in downtown London, Ontario. This is because southern Ontario is a food growing belt for Ontario and Canada where local and grassroots projects are viable, but also larger scale economic development activities and investments. The agri-food business in southern Ontario is big business. The Ontario Federation of Agriculture commissioned a study in 2013, by researchers at the University of Guelph, and “according to this study, Ontario agriculture is well on its way. Agriculture supports nearly 158,000 jobs with $8.1 billion in wages and salaries. More than 75,000 of these jobs are attributed directly to primary agriculture and to suppliers where farm operators purchase goods and services such as feed, equipment and fuel. The remaining 82,000 jobs are produced in the overall provincial economy as suppliers restock supplies and workers spend their earnings on consumer goods and services.” While some food production facilities have been scaled back or closed down to re-align their businesses for global competition, such as the Heinz site in nearby Leamington, others are making investments because of the agricultural potential in the area. French’s, known for its mustard, recently announced in January 2016 that they will be


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contracting with local tomato growers in Leamington to produce ketchup.35 Some farms that used to supply Heinz are now going to be supplying for French’s. Private investors also are interested in this sector. In September 2015, Libro Credit Union announced that it will be investing in a professorship at the University of Guelph to focus on the agri-food sector and southern Ontario economy.36 Dr. Oetker, a German company, invested in London, Ontario, as a site for its pizza factory. In 2014, the Globe and Mail reported that “the $100-million London plant was built with $19-million in grants from the federal and provincial governments. The company is spending another $35-million completing the project with a warehouse and distribution centre that will serve North American markets and make 27 million pizzas a year.”

Photo Credit: Rolanda Elijah

35 French's using Leamington tomatoes in all its ketchup. Yahoo News. https://ca.news.yahoo.com/frenchs-using-leamington-tomatoes-ketchup-200124288.html <Accessed: January 21, 2015> 36 Libro Credit Union and the University of Guelph Partner to Grow Prosperity. Libro Credit Union. https://www.libro.ca/Community/Media/Releases/20150930LibroandUniversityofGuelphPartner.aspxhttps://www.libro.ca/Community/Media/Releases/20150930LibroandUniversityofGuelphPartner.aspx <Accessed: December 27, 2015>

https://ca.news.yahoo.com/frenchs-using-leamington-tomatoes-ketchup-200124288.html

https://www.libro.ca/Community/Media/Releases/20150930LibroandUniversityofGuelphPartner.aspxhttps:/www.libro.ca/Community/Media/Releases/20150930LibroandUniversityofGuelphPartner.aspx

https://www.libro.ca/Community/Media/Releases/20150930LibroandUniversityofGuelphPartner.aspxhttps:/www.libro.ca/Community/Media/Releases/20150930LibroandUniversityofGuelphPartner.aspx


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DISCUSSION &

RECOMMENDATIONS


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Discussion Our traditional economies were diversified, so that if our fisheries collapsed, we had the skills to access deer and other wild game. Economic diversification, investment and strategic planning are the modern survival skills that we need. A positive shift in strategic thinking is taking place at Chippewas of the Thames in the past few years and the major factors for this shift is the Big Bear Creek Land Claim Settlement Agreement; the increasing financial planning and investment capacity of all of the land claim trusts; and internal organizational development that is occurring as a result of having moved from a reactionary-mode to proactive-mode through Comprehensive Community Planning; and Asset Management, to name a few. This diversification report is intended to encourage ongoing dialogue and strategizing by providing more information to create a foundation that helps us to connect governance, development and cultural processes. As well, to point out that it is not enough to have external consultants, experts, or in-house reports such as this, to give the community direction on whether to invest in tobacco as a way to create prosperity, to admonish us to stop economic leakage, or to tell us to provide access to food for our own people. What is more critical to our development as a First Nation is the governance aspects of our economic development. We are Anishinaabeg, we are a collective as well as a society made up of families, and individuals. As a community we have to strike the balance between the collective and individual interests. Most economic development processes do not speak to our collectivity. Once we are able to establish a community process and sufficiently demonstrate the benefits of an initiative to our larger collective, only then can we build an economy, which is just another means of social organizing. Until then, we may continue to struggle. One suggestion to build collectivity is for Chief and Council, and community to engage in a community-based and facilitated analysis about whether or not we would want to make the investments into these areas of tobacco and agri-food. A SWOT analysis or a variation of the PEST analysis could be used in a community and economic development discussion. The basic PEST analysis includes four factors: Political Factors (P), Economic Factors (E), Social (S), and Technological (T). PEST is useful when conducting an “external analysis when conducting a strategic analysis or doing market research, and gives an overview of the different macro-environmental factors that the company has to take into consideration. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.”37

37 Wikipedia, “PEST analysis” https://en.wikipedia.org/wiki/PEST_analysis <Accessed January 14, 2016>

https://en.wikipedia.org/wiki/Market_research

https://en.wikipedia.org/wiki/PEST_analysis


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From Wikipedia, the online encyclopedia38:

“Political factors are basically how the government intervenes in the economy. Specifically, political factors has areas including tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government aims to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bads). Furthermore, governments have a high impact on the health, education, and infrastructure of a nation.

Economic factors include economic growth, interest rates, exchange rates, the inflation rate. These factors greatly affect how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and would therefore to what extent a business grows and expands. Exchange rates can affect the costs of exporting goods and the supply and price of imported goods in an economy.

Social factors include the cultural aspects and health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. High trends in social factors affect the demand for a company's products and how that company operates. For example, the aging population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to social trends caused from this (such as recruiting older workers).

Technological factors include technological aspects like R&D activity, automation, technology incentives and the rate of technological change. These can determine barriers to entry, minimum efficient production level and influence the outsourcing decisions. Furthermore, technological shifts would affect costs, quality, and lead to innovation.

Expanding the analysis to PESTLE or PESTEL adds Legal Factors, Environmental Factors. A community workshop could be used to put some of the ideas that have been discussed here into a PEST–type of chart developed for our economic strategy, community projects and developments for consideration, and not limited to tobacco or agri-food. Increasing capacity and team work has already been started within the administration through the newly formed PLEES group, but there are limits to the internal PLEES group. For now, this group is internal to the administration and does not engage in community capacity development as is being suggested here. But, the COTTFN PLEES group and external consultants could be a resource in this type of workshop to

38 Ibid.


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help guide community members through a PEST-analysis that might be adapted to include cultural or indigenous worldview factors as well. The PLEES group might also consider and provide recommendations on how to adapt that analysis for COTTFN based on the Harvard research on Indian Economic development; and best practices that have been developed elsewhere.

AREA: Raw Leaf Tobacco Growing

ISSUE COMMENTS

Socio-cultural

Technological

Ethical

Environmental

Political

Legal

Environmental

Table 1.1 An Example of a PEST-type of chart that has been elaborated to STEEPLE . Developing this COTTFN approach is important because the asset management discussions of the First Nation requires a real community support base if we are ever to move to action and require community resources. For instance, the land claim trusts are separate entities and have their own legal requirements, and any community processes or decisions that may require financial cooperation of the trusts need to be mindful and respectful of the legal requirements of each of the trusts. COTTFN cannot make economic development decisions and achieve success in isolation of other factors, and based only on a hunch, or anecdotal information. The work around the Harvard Project on Indian Economic Development has shown that we need to also develop the governance models that will fit with our community development so that any actions undertaken by community have credibility and legitimacy, drawing upon our Anishinaabeg culture.


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Recommendations

1. Ensure that any future economic strategic planning for the nation includes a goal or outcome of economic diversification with a definition and rationale.

2. Use the tobacco project and the Diversification Report as an example to

introduce the idea of economic diversification into any future Comprehensive Community Plan revisions.

3. Review and present this report to internal committees of the First Nation and Senior Management for sectoral areas such as Lands and Environment, Economic Development and Public Works.

4. Engage the community in a facilitated process and workshop to:

a. Undertake a community SWOT or STEEPLE analysis for the tobacco industry (see Discussion Section)

b. Document and link economic strategies to our foundation as a people using historical research that has been done for land claims alongside our traditional values, ethics and land usage

5. Contact the University of Guelph and Western Ontario to inquire about community presentations on their research as it might be relevant to the First Nation.

6. Complete a Food Security Survey along with Health, Social Services, the School and Economic Development.

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