AAND Committee Meeting

STANDING COMMITTEE ON ABORIGINAL AFFAIRS AND NORTHERN DEVELOPMENT

COMITÉ PERMANENT DES AFFAIRES AUTOCHTONES ET DU DÉVELOPPEMENT DU GRAND NORD

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, May 12, 1998

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[Translation]

The Chairman (Mr. Guy Saint-Julien (Abitibi, Lib.)): We have quorum and we will start now. Today, in accordance with Standing Order 108(2), we are continuing our study of Aboriginal economic development.

Our witnesses today are representatives of Groupe Cleary: Mr. Bernard Cleary, President; Mr. Guy Beaudet, Vice-President; Mr. Luc Lainé, Vice-President; and Mr. Vincent Poulin, Business Director.

Mr. Cleary, do you have an opening statement?

Mr. Bernard Cleary (President, Le Groupe Cleary): Yes, I have a short statement lasting about 15 minutes.

The Chairman: Very well. You may start.

Mr. Bernard Cleary: I would like to start by thanking you for inviting us. We are very pleased to be here today because we feel that the committee has taken an excellent initiative by deciding to meet with Aboriginal businesses. Of course, we will take your mandate into account, which, we believe, is to assess government programs aimed at promoting economic development for Aboriginal people.

I will concentrate on three specific aspects that have enabled us to develop with the help of certain government programs. These three aspects are: the development of our company; government programs which have been successful from our point of view and the supply strategy that has clearly helped our company develop and develop partnerships; and, finally, the information highway.

I must tell you that the company started in 1990. It started out very small with a small economic development project; I worked alone and later there were one or two other people involved. The company was founded through my personal involvement in communications, teaching and Aboriginal matters.

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The company thus went through the normal stages of development and grew steadily. The company was founded on professionalism, which I feel is extremely important, on flexibility and on effectiveness and efficiency.

The company did not develop extremely quickly, but it acquired all sorts of important aspects piece by piece. It was really in 1995 that the company grew significantly because it was at that time that a certain number of questions were asked. What was going to happen to the company owing to the fact that the founder was getting older? Thought had to be put into developing the company differently if it was to outlive me.

This was an important shift in direction and I must say that it had an impact in terms of the people working for us. I'm thinking first and foremost of my daughter, Chantal, who is Vice- President of the company and who did not necessarily feel ready to take over from her father. She wanted to develop the company in a very specific direction. That was when we started to recruit a certain number of people whom I will introduce to you and who are with me today.

Guy Beaudet, on my right, worked for the National Assembly. He has been with us for two and a half years now and works mainly on promoting partnerships and business development. Luc Lainé, on my left, is a Huron Indian. He has been working with me for two and a half to three years. Luc worked for the Royal Commission and had an opportunity to go across Canada to meet with Aboriginal groups. Luc Lainé works primarily in marketing for our firm. Vincent Poulin has come to our company recently after a career with the Department of Indian Affairs. He is more available now than he used to be. Vincent is therefore an important link for us with Ottawa. He works regularly for the company on a part-time basis. We consider him an elder who is helping the company out in an important way.

Our primary area of involvement has been information, which was what we started with and in which I had long career experience through negotiation and band support. Little by little, however, the company developed and now we have about ten permanent employees, five from Aboriginal communities and five Quebeckers. The company calls on numerous specialists because it does a lot of consulting. We try to get the people who have the best skills for every aspect we are involved in.

We have developed a certain number of specializations over the years and I will mention the main ones. In the energy sector, for example, we have been working for two and half years on energy self-sufficiency and mini hydroelectric generating stations. We are also working on European markets because we have been asked to help develop arts and crafts markets. The Leclair Stores are one of our clients. We have also been asked to do a number of fairs.

Another project is the launch of a native trade and cultural centre in Paris. We are also working to promote fine Native cuisine, which we feel has an extremely promising future. We are working on new information technologies, tourism, training and education regarding Native culture and, of course, negotiations with the government.

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As I said earlier, the team is in place and, by working with the younger employees, I have been able to instill in them a certain philosophy of work, that is the importance of a job well done and of professional, high quality work. We have thereby built a company which I feel has strong credibility.

We also have other partners. For some time now, we have been working across Canada, and an English-speaking Native partner, Ann Noonan, has been working with us on markets across Canada, especially in the West.

One of our company's goals is to promote understanding between peoples. A Native company has to make sure that it is as profitable as any other company. But we also have other important concerns: the company is working to promote all Native concerns.

On February 5th, 1997, Groupe Cleary made its debut on the information highway. I can tell you that this was not a very natural step for me, as you can see by my grey beard. Information highways were not necessarily familiar to me and the younger members of the team had to convince me to get involved in that area. I think that they were right to do so because I came around to understanding that it was indeed useful. We also realize that this has become an extremely important development for us.

The concrete results of this entry on to the information highway is what is now called La piste amérindienne. La piste amérindienne is not an ordinary Internet site. It is primarily intended as a reference on Native issues for Native people, those in Quebec for now. The site has been recognized by numerous organizations and has had good media coverage, at least valuable coverage for us. There are now 8000 to 10,000 visitors each month, which shows that there is definitely interest in these topics.

Even more interesting, in my opinion, is the fact that Aboriginal groups are very involved. Things started slowly, but the majority of major Native web sites in Quebec are now on La piste amérindienne and are working with us.

The other development happened very much by chance. A few months ago I was in a small community called Mingan and was visiting the school. How surprised and especially pleased I was to notice that the seven or eight children who were playing on the Internet—playing may not be a very nice way of describing what they were doing—or who were surfing the Internet were mostly on La piste amérindienne. That made me realize how interested Aboriginal people are in this new technology.

I personally felt I had reached one of my goals since one of the aims of La piste amérindienne was to enable native people to gain access to the information highway at the same rate as other Canadians and have them develop the project.

We are also working on what is called The Native Trail. Guy may be able to give you more information on that.

The other important aspect for us is partnership. We believe that our company has credibility and that it can build partnerships. We are using this method to the fullest extent possible.

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The Federal government's incentive policy in the area of restricted contracts has led us to broaden the company's expertise still further. Because of this expertise, Groupe Cleary can occasionally tender for major projects with other groups.

I will name only a few of our partners at the international level. We have recently taken steps to get involved in international development with the Canadian Co-operative Association, which acts as a sort of partner. We are working with Cossette Communications, which you are no doubt familiar with; this is a Canada-wide communications firm that we are partnered with. We are also working with CGI to prepare feasibility studies on Aboriginal Intranet. Our other partners include Groupe Roche et Associés, Groupe TS, GID Design, Vision technique internationale, the Canadian Museum of Civilization, Aliments Médina, CERFO, etc.

I would like to emphasize that this policy has made it possible for the company to continue to expand through partnerships and that in all its partnerships, even with firms as large as CGI, Groupe Cleary always has the necessary 51% majority. Groupe Cleary is not a dummy company, but one that collaborates with major groups.

I will end by talking about the future prospects for Groupe Cleary, which are very bright for those that will take over. We are positioning ourselves well and very strongly in the Canadian market as a whole, not only in the consulting field, but also in other sectors. One of these is program evaluation. We have submitted 12 bids and received 10 contracts across Canada. Since our company works in English and French, it is well-positioned for contracts across Canada.

Moreover, as I said earlier, we need to use the procurement strategy to the fullest extent possible because this is an important strategy for us. In passing, I think this is one of the best things that the government could have done to give a hand to native companies. First of all, it enables us to get a foothold in a market that is of significant size because it is a government market. Second, as I already mentioned, it enables us to work with other groups and thereby learn from firms that have more experience in other fields. For all native people, this is important.

Now, if you will allow me, I will ask Luc to say a few words and Guy to talk about The Native Trail, the English version of La piste amérindienne.

[English]

Mr. Luc Lainé (Vice-President, Le Groupe Cleary): Thank you, Mr. Cleary.

As Mr. Cleary mentioned, Le Groupe Cleary is an aboriginal company that develops business ties and partnerships with well-known Canadian companies in order to target the markets reserved for aboriginal companies as part of the federal government procurement strategy. Again as Mr. Cleary mentioned, Le Groupe Cleary works in both official languages, French and English.

I would like just to review quickly the main services offered by Le Groupe Cleary.

We offer communications and multimedia. As an example, Le Groupe Cleary satisfied the criteria of the federal government's procurement policy as a registered aboriginal supplier of communications, photography, mapping, printing, and publishing services. We are registered on the standing offer for the maritimes. Also, we are accredited by the Société québécoise de développement de la main-d'oeuvre, the Quebec Workforce Development Corporation.

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We offer training sessions of different lengths. The sessions can be based on existing contents or can be tailored to the particular needs of clients. I would like to mention that we also offer learning and awareness workshops on aboriginal culture to government departments and agencies as well as to public and private businesses.

Le Groupe Cleary is also able to evaluate the aboriginal programs offered by the government. Our knowledge of aboriginal issues and of the political, economic, and social life of Quebeckers and Canadians forms the basis of our expertise. Our company is unique in its ability to analyse situations while taking into account the particular concerns of aboriginal peoples.

Also, Le Groupe Cleary, in partnership with TS, for example, manages all aspects relating to the implementation of environmental characterization studies, the development and implementation of restoration and decontamination projects, and the application of specialized environmental expertise.

We are able to pilot the full negotiation and mediation file. We can make all the necessary analyses, draft any additional documents required, prepare your positions clearly and advantageously, and build an argument, all according to your needs. Or if you prefer, we can simply advise you on your own actions and decisions.

Furthermore, Le Groupe Cleary can act as a consultant in comprehensive and specific land claims negotiations.

Finally, Le Groupe Cleary has entered the era of international development in many ways. The difficulties experienced by Canadian aboriginal communities are similar to those of certain developing communities abroad. So Le Groupe Cleary internationally, in partnership with public organizations such as CCA, for example, is currently positioning itself in the following areas of international development: institutional support, training and development, environmental, engineering, communications, and multimedia.

[Translation]

The Chairman: Thank you.

Mr. Beaudet.

Mr. Guy Beaudet (Vice-President, Le Groupe Cleary): As Mr. Cleary mentioned earlier, Groupe Cleary has moved on to the information highway, both to equip itself as a company with these new work tools and to play a role in promoting native peoples in Quebec and Canada at the national and international levels.

La piste amérindienne, The Native Trail started with coverage of the 11 native nations in Quebec. We present the 11 nations and the 54 communities. There is an information page that gives native current events and presents issues with their background and regular features. This is an educational tool for young people. We are targeting young people in particular, and the site includes educational question-and-answer games on Native culture and a Native chat line, where young Native and non-Native people can talk using this new communication tool.

La piste amérindienne is also a promotional tool for native companies, a vast collection of tourist information on native businesses, a business directory of native companies and now a collection of native Internet sites across Canada.

The first phase, which is now complete, brought an average of 10,000 visitors a month to the home page. There are now over 1.5 million hits a month on this native Internet site, which currently exists in French only, and contains 250 Web pages.

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This site has enabled us to develop partnerships with Aboriginal Business Canada, Heritage Canada, the Caisse de dépôt, Hydro-Québec, Tourism Québec and other organizations. We were recognized by the International Centre for the Development of the Information Highway in French for the quality of our Web site. About 40% of the visitors to our site are from outside Canada, which is excellent positioning for Aboriginal firms in the tourism industry.

In 1997, we got a five-star rating and were picked as one of the best 100 sites. We are praised in European magazines. In 1997, we also took part in the international information highway and multimedia market. We received the MISTAPEW award in the culture category.

We are now entering phase two of our project, that is the translation of the site, with help from Heritage Canada. We are currently translating La piste amérindienne, and will cover all 11 nations and 54 communities. The entire Web site will be translated and should be on line in the middle of the summer.

The third phase will be to extend this site—La piste amérindienne and The Native Trail—to cover all Aboriginal nations in Canada. Our goal is to present La piste amérindienne in Moncton in November 1999 at the Moncton Summit, where the 49 heads of states of countries in the Francophonie will be meeting.

La piste amérindienne has very important economic and social spinoffs for Aboriginal communities, especially Aboriginal businesses. At present, over 450 Native businesses and organizations in Canada are listed in The Native Trail—Répertoire de sites autochtones canadiens. We have become the reference for Native matters across Canada.

The site is also very important in terms of its economic impact, since it is in line with the current government's policy, entitled Gathering Strength, which suggests renewing partnerships. We believe strongly that in order to renew our partnerships, we must educate the general public, that is non-native Canadians, so that they have a better understanding of Aboriginal nations in Canada.

The site is also a wonderful promotional tool for Canadian Francophones. The concept of La piste amérindienne and The Native Trail is also enabling us to develop expertise in this area. We are currently in discussions with the Haitian Consulate General in Montreal, which has asked us to put together a similar concept in order to export it for the Haitian community involved in Quebec- Canada-Haiti relations, with a view to improving positioning and exchanges among Haitian, Canadian, Quebec and Aboriginal businesses.

This opens a door for us in the field of international development, in that Groupe Cleary is involved in using Aboriginal expertise to help certain international developing communities.

By the end of the summer, we expect to receive 25,000 Internet visitors a month owing to the translation of the present site and 50,000 visitors to the home page when The Native Trail is finished, thanks to the support, of course, we are expecting from the Department of Indian Affairs to design the content.

With respect to government programs, we were supported by the Quebec government for the first phase, through the Fonds de l'autoroute de l'information, and we have recently applied to the Department of Indian Affairs for support to develop the content on all the First Nations in Canada.

The Chairman: Thank you, Messrs Beaudet and Cleary for this excellent presentation on the work done by your group. Mr. Cleary, I think you have a final word for us.

Mr. Bernard Cleary: As I close, but not as the conclusion, I would like to emphasize something. We said something about it, but not as specifically as we should have. If we're at that point today, it's thanks to the help provided by someone and that came from somewhere. Otherwise, it would not have been possible for a business like ours to develop this fast. Canadian Aboriginal Business was very supportive to us in the development area. The Department of Indian Affairs also gave us very valuable help and will be helping us again for the translation of the site, as well as Heritage Canada.

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We also said that the Fonds de l'autoroute de l'information du Québec had helped in our growth. I wanted to point this out personally because it is of some importance. If it had not been for their help, we wouldn't be where we are. We would have grown, but a lot more slowly. That's all.

The Chairman: Thank you, Mr. Cleary, for this excellent presentation on the Groupe Cleary. I would also thank your team. We really appreciate your presence.

We'll now go to questions.

Mr. Konrad.

[English]

Mr. Derrek Konrad (Prince Albert, Ref.): Thank you very much.

I found your presentation so clear and so detailed I can hardly think of any questions to ask. It sounds like you have quite a company.

You're still a private, family-owned company, as I understand?

[Translation]

Mr. Bernard Cleary: Yes.

[English]

Mr. Derrek Konrad: And you are looking at having an intergenerational lifespan for your company and obviously want to bring in other young partners. How do you plan to bring those partners in and where are you looking?

[Translation]

Mr. Bernard Cleary: We're right in the middle of restructuring and expanding. As of now, our objective is to get younger people than I interested in the business.

So first of all, we have to diversify our client base. Whether we like it or not, we'll even have to develop markets. To date, all the markets we've developed were also developed by the people with us. That's a first point. I for one think it's important to have a diversified team made up of competent people who will be in a position to take over.

Let's talk about finances. We're moving towards shareholder ownership. First, we have to see to it that this business will always remain in Native hands. It's a business which, today, is fully Native and whose equity is also entirely Native. The objective is to have this business remain a Native business. That's the first element and an important one.

[English]

Mr. Derrek Konrad: Okay. Can I ask you a supplementary question? I still have some time here.

When you say “aboriginal”, are you talking Inuit, non-status, status, and Métis? And how do they become partners in your company? Do they buy in or work in or develop a new product or...?

[Translation]

Mr. Bernard Cleary: For the time being, our partnerships go more towards, for example, Ann Noonan and Associates which is an anglophone business from out West working with us to establish partnerships with other businesses. You will understand that we'll soon need to work with communications firms out West, in Ontario and in the Maritimes. That's the kind of partnerships we're establishing.

So in some more specific cases, like The Native Trail, our interest is to get into partnerships with the stakeholders. But we're still at the development stage. Now, will our shares be available on the stock market soon? That's different and we haven't thought about it yet. That's for later on.

As for the shareholder aspect, it will clearly become more and more important as the business develops. We're just at the beginning of our expansionary phase.

Mr. Beaudet might add something.

Mr. Guy Beaudet: About our partnership policy, as a Native business, especially within the context of the federal government's supply strategy, which supports and suggests certain markets reserved for Native businesses in the area of calls for tender, especially in the context of MERX, we think that partnership with non-Native firms, in a minority position according to the rules of this policy, could bring us a major knowledge transfer in future years.

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Therefore, we target certain markets. Together with an environmental engineering firm from Quebec City, we have established a joint venture plan to access government engineering and environmental contracts. However, our group retains a majority interest in this joint venture. As a result, we can take a few years to develop expertise which we do not currently have in certain areas. This will enable us to develop and acquire new knowledge. A recent example of this was a call for tenders by the Department of National Defence.

The Chairman: Thank you.

Mr. Crête.

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): I noted with interest that you are pointing out certain aspects of modern aboriginal life. I think this is an interesting model in that regard.

Among the constituents in the riding I represent are a group of Malecites. I would just like to give this one example. I would be grateful if you would explain to me how aboriginal businesses can overcome problems involved in the start-up process, such as a lack of capital or advanced technological equipment.

You seem to have succeeded. You referred to that briefly, but I would like more information with relation to other groups who have not achieved the same degree of development but wish nevertheless to set up a business. What is needed for such an undertaking to succeed, both within the business itself and outside?

I would like to ask my second question immediately, so as to give you time to answer.

The Quebec government recently announced, as part of its new Aboriginal affairs policy, the creation of a $125 million investment fund, and they would like the federal government to allocate the same amount. What is your view of this policy direction by the Quebec government in the area of Aboriginal economic development? And what would your priorities be if you had the responsibility of distributing a $250 million budget among various Aboriginal communities in Quebec?

Mr. Bernard Cleary: In answer to the first question I would say that it must be clearly appreciated that Aboriginal economic development is still in its very early stages. You just have to visit those communities located outside major centres to realize that economic development projects are still in their infancy.

The other point which also seems important to me and which we must not be afraid to state is that not anyone wishing to become a business person can do so. I think the government must take that into account. In my view, therefore, governments should first try to identify certain individuals who have what is needed to become business people. They should then help to train them in business and work with them to build business plans. Lastly, they must ensure that those people obtain funding and try to establish the necessary structures for them to obtain venture capital. As you might expect, in Aboriginal communities there are very few people with the money needed to set up a business.

Furthermore, I believe very sincerely that what is referred to as business incubators must be established. That is all well and good, but government or rather governments have a responsibility toward Aboriginal business people who are just starting out in this area, namely to provide assistance and training through such facilities. From my experience, I would say that this approach would lead to fewer failures.

It's sad when a business is established and then fails because of lack of experience or some other requirement. That often puts a premature end to certain worthwhile experiments and careers, not necessarily because the people concerned were incompetent, but often because they didn't have the necessary experience or training.

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Therefore, in my view, giving money will not in itself resolve the problem of funding Aboriginal businesses. Money is an important factor, but just as important is everything that should come with funding, that is training, assistance and support, etc. That is how I believe governments should support entrepreneurship.

As regards your second question, like anyone else I also heard that the Quebec government had announced its policy in this area. But this policy has not yet been defined. Like all Aboriginal business people, I would say that we are in favour of government investment, to the greatest extent possible, in economic development projects. Given what I've said, such an approach can only help everyone involved in development.

But here also, we must be careful to ensure that such projects are not developed separately or independently from one another. In my view, they should be developed together. There is no point working separately, on two different things. I believe that Aboriginal Business Canada and the kind of development sought by the Quebec government should move forward together, so that the Aboriginal people can benefit from these undertakings to the greatest degree possible. I'm not saying this for myself. Nor am I saying it because some people might pull one way and others another. That's not what is important. In my view, what is important is to build a strong entrepreneurship structure. As far as I'm concerned, that's how I see the future.

Mr. Paul Crête: Part of my question dealt with priorities. If you were in charge of distributing the $250 billion, what would be your priorities?

Mr. Bernard Cleary: I think I referred to that briefly earlier.

Mr. Paul Crête: The priority would be entrepreneurship.

Mr. Bernard Cleary: As far as I'm concerned, priority should be given to the training of business people. The priority should not be distributing money. For me, that is the main point. That applies to everyone. That applies both to Quebec and to anyone else involved in this issue. The priority should therefore be to ensure that business people develop as they should, that results are produced. You cannot achieve a final victory if you move from defeat to defeat. Tangible results must be achieved in the area of entrepreneurship. The same thing applies in the case of Aboriginal people or anyone else.

Therefore, as entrepreneurs what we want to achieve are tangible results. As regards the issue on which we are working at present, we believe we have achieved something, but we started very small.

I spoke to you earlier about the assistance we've received, some of which was significant and came from the federal government and other sources, but we did not get that initially. In fact, that was given a few years ago. Why? Because we had reached a stage of growth where we were able to develop along those lines.

As regards Aboriginal economic development, I believe that we have to begin slowly, with assistance and support, on small projects so that we can learn. Practice makes perfect. This is true also in the case of Aboriginal economic development.

There is a whole process which we tend, although not deliberately, to ignore. It is not an easy matter at all. I myself believe that is an important point. It is my actual experience which has showed me that we need that for Aboriginal development. We need that, far more than money. Money doesn't solve every problem. When you're in business money does solve most of the problems, but not all.

Mr. Vincent Poulin (Business Manager, Le Groupe Cleary): I would just like to add something concerning the financing of businesses, given that I spent 22 years in the Department of Indian Affairs and 22 years as a loan fund manager.

Mr. Paul Crête: But that doesn't add up to 44 years in all.

Mr. Vincent Poulin: No, not at all.

Mr. Bernard Cleary: No, it's not cumulative.

Mr. Vincent Poulin: Therefore, the area of funding is really my specialty.

The federal government procurement policy certainly helped. There were many opportunities for Aboriginal entrepreneurs to set up a business. There still are. The policy even increased the number by setting aside a market for them and to some small degree forcing non-Aboriginal business people to merge or associate with businesses to develop Aboriginal human resources.

Funding remains a particular problem. First, Aboriginal businesses, not deliberately but accidentally, do not have access to all government programs. For example, they don't have access to small business loans. That was not intentional, but the wording of the legislation... For example, the Act says that in order to be eligible, guarantees are required. It has to be realized that on a reserve it is very difficult to get guarantees.

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Therefore, because of the wording of the Act, most Aboriginal businesses are excluded from the program. Also, when subsidy programs are reduced, access to financing is automatically reduced because an Aboriginal business is generally financed 20% through equity, 30% through contributions and 50% through guaranteed or direct loans.

If the 30% in contributions is removed, that means that loan financing is also removed because such loans are no longer eligible. Therefore, an enormous amount in investments is lost. From what I have studied and on the basis of my own results, I would say that generally one dollar invested in the form of contributions brings in $4 in investment to the community.

So a lot of money is being lost, when you remove one dollar from business assistance programs, you are taking away an enormous investment from Aboriginal communities and you're not helping them to take charge of their affairs. Financing is still a problem, as is access to programs.

The Chairman: Thank you, Mr. Poulin.

Mr. Cleary, do you want to say something?

Mr. Bernard Cleary: Yes, there are two small points I would like to add to what Vincent said. Obviously, funding of Aboriginal businesses requires government support, whether you like it or not. I forgot to mention that people living on reserves cannot mortgage their houses. But what do you expect? Banks are so used to having an endorsement from the federal government. When you want to discuss something as equals—which obviously we cannot do—they immediately want an endorsement from the federal government, although we haven't yet begun to show that we could be credit- worthy and that we are able to pay our debts.

Once they know that it is an Aboriginal business, that's what happens. I must say that places us in a difficult position, there are many companies which would prefer not to have to have an endorsement from the federal government whenever they want to obtain a loan. This is something you have to realize when you're dealing with any kind of economic development.

Furthermore, I would say that contributions are important. Don't forget that when Aboriginal Business Canada contributes 75% or, in the case of other programs, contributes 50%, the business also has to provide 50 per cent. The business is not always strong enough to do so.

Last year was very difficult financially for our group, for the simple reason that we had to cover all these costs. In the case of the highway, we received $165,000 but we had to put in $165,000. We received $75,000 and had to put in $75,000, with the result that over the year two shareholders, by the names of Bernard and Chantal Cleary, had to put in $284,000 to cover the amounts allocated. That is not an easy matter. You can tell us that we should not have moved forward, that we should have waited. That may be true, but the highway is in operation today.

Our goal was not to develop the information highway six years after everyone else. Therefore, a wide range of factors have to be considered. The other point, and this will be the last one I will make before answering your questions, concerns the international situation. We are moving into the international area. We know that people want Aboriginal groups to develop. I believe in fact that Aboriginal Business Canada is part of this policy.

We are a firm of consultants. In my view, we have some expertise. We have expertise we can export because working with Aboriginal groups is often similar to working with disadvantaged countries. I won't go through all the structures involved now.

Therefore, we have an Aboriginal approach which we developed and is appreciated. Countries such as Tchad, Haiti and others consider our aboriginal approach to be an interesting one. People are inclined to work with those countries in the same way as they work with Aboriginal groups, that is in partnership, far more than other big businesses. I am not criticizing big business, but often large companies behave as if they are in a conquered country and want to show everyone how things should really work. That's what happened in Haiti. We, however, work with the people concerned, and the countries involved seem to like this approach.

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We have expertise and are able to work, but there is a problem. To be accepted by CIDA, for example, you need three years' experience. How can you acquire three years' experience if you do not get a chance to begin? So there's a problem.

Obviously, we have got around that problem, but I am talking rather here about other companies. We have got around the problem by linking up with the Canadian Co-operative Association, which acts as something like a sponsor for us. We move from one sponsorship to another. We're looking forward to the day when we no longer need a sponsor.

What we want is for the government to help Aboriginal businesses to obtain contracts from CIDA so as to enable them to meet that three-year requirement, In order to do so, you have to start somewhere.

In this regard, I must say we felt pretty discouraged. We felt discouraged because things were not moving. We, in the Aboriginal community, address the problem indirectly by cooperating with the APAC.

If you want Aboriginal businesses to develop and establish international contacts, you must realize that contracts offered by CIDA are also of interest to Aboriginal peoples.

The Chairman: Thank you Mr. Cleary.

Mr. Guy Beaudet: I will be brief.

The Chairman: Please be brief, because members are waiting and they have a number a questions.

Mr. Guy Beaudet: As regards encouraging Aboriginal businesses with CIDA, it should be remembered that the procurement strategy applies to all government departments and agencies subject to the Financial Administration Act.

Even if CIDA is not required to, it is still requested to comply with this policy. If only 5% of CIDA contracts were offered to Aboriginal companies, it would provide them with an opportunity to acquire a necessary experience.

What we are proposing is that this be done in partnership with non-Aboriginal businesses or as co-ventures, thus making it possible to transfer knowledge from non-Aboriginal businesses to Aboriginal ones over a three-year period, so as to provide the latter with the qualifications and experience they require.

Aboriginal businesses could subsequently serve as incubators helping to establish Aboriginal companies.

The Chairman: Thank you, Mr. Beaudet. Mr. Earle.

Mr. Gordon Earle (Halifax West, NDP): I would also like to think the Cleary Group for its excellent presentation. The information is very interesting.

The Chairman: Your French is excellent, Mr. Earle.

Mr. Gordon Earle: Thank you, Mr. Chairman. I am going to practise it a little more.

The Chairman: That's good. Keep on practising.

Mr. Gordon Earle: Did I understand correctly that you only have 10 employees?

Mr. Bernard Cleary: Yes, that is correct.

Mr. Gordon Earle: Five aboriginal and five non-Aboriginal employees.

Mr. Bernard Cleary: Full-time, but we work a good deal with consultants and self-employed people.

Mr. Gordon Earle: You are doing a lot of projects and you have a lot of activities. How do you manage with so few employees? Is it through partnerships or technology?

Mr. Bernard Cleary: I'll brag a bit. I won't tell you that I get up at 4:30 a.m., although I do, because I do other things as well. I'll brag by telling you that the Cleary Group demonstrates its commitment through its experience and its involvement in society. This grey beard is an indication of 30 years' commitment and more in Quebec and Canadian communities across this country.

I have had numerous contacts with people who are extremely skilled and very happy to work with the Cleary Group on certain issues. Outside experts are called in by the Cleary Group because 10 people can't do everything. It's just not possible.

But you can't go and hire 100 people either. Our company's philosophy is to use the right people at the right time, so that we provide a top-quality product and maintain the kind of quality- price ratio that companies like.

• 1205

I don't want to complain about major corporations again. However, you must understand that our rate is $550 a day, except from mine, which is a little higher, probably because I don't want to work as much. Age does make some demands on us. However—we work for $550 a day, and in our opinion offer our clients an excellent quality-price ratio. Some companies that are much larger and less streamlined than ours charge $1,200 to $1,500 a day.

We prefer to hire specialists on a given issue when we need them. That is the way we work. That might of course change some day, I don't know. But that is why we can achieve what we do now.

Mr. Gordon Earle: Thank you. I have another question for you, but this time I'll ask it in English. It is a question on youth.

[English]

You mentioned that youth is very important, and I agree with you. It is very important because young people are in fact our future. I'm just wondering how you engage the young people of the aboriginal community in your activities. How do you involve them so they can learn some of the things that you are doing and carry this on into the future?

[Translation]

Mr. Bernard Cleary: There will be two parts to my answer, and I will go a little further. According to Aboriginal philosophy, younger people are taught by their elders. This philosophy, or principle, is extremely important in the company I manage.

Some of the things I try to impart to the people I work with are my skills, my contacts, all my knowledge, professionalism, tenacity and fighting spirit—I still have that, even though I'm not as young as I used to be. I consider it an important obligation as an elder, or certainly as someone who is older than they are, to teach them these things. However, as I do so, I try to draw as much as I can from the diversified education of these young people, who arrive with a vast range of skills. That is one important principle.

Second, when it comes to skills we need for the work we have to do, two kinds of situations tend to arise. When we focus on the advancement of communities, we are dealing with people we provide some structure for, and we try to help them learn.

Specific projects like a communications project are different. I have been teaching communications at the university level for 13 years. So I do know how to teach young people. We provide them with some form of training, and this gives them an opportunity to know how it feels to do a job well, and to experience other important things.

The result of all this is that a great many competitors have been created. The number of Aboriginal consultants in our area is growing impressively, and they have won many contracts in our field.

We also hire experts among Canadians and Quebeckers, who work with our young people in our areas, as well as researchers who work on the issues at hand.

We try to improve quality as we make progress with people. We also try to lead by example. Among the Montagnais—that's my background—the success of this company serves as an example. We can show the young people growing in our communities that they can succeed elsewhere. That is an additional impact, which is very positive.

So that's where we are. We aren't very rigidly organized, but I have given you an overview of the ideology underlying our operations.

[English]

The Chairman: Thank you.

[Translation]

Thank you, Mr. Cleary.

Mr. Keddy.

[English]

Mr. Gerald Keddy (South Shore, PC): Thank you, Mr. Chairman.

Just listening to your briefing, I just want to make sure I have clearly understood your theory of entrepreneurship. As I understand it, it's the same theory of entrepreneurship anywhere in the world.

• 1210

Say you have a company that happens to be an aboriginal-owned company where you have seen a niche market that no one else was into. You moved into it. Perhaps you were the first group, the first entrepreneur, to move into that area. Actually, what has happened is that this has created some competition.

As for Gordon's question of how you bring other people or other groups or other aboriginals into that area, I think you answered.

Once you enter an area, you lead by example. Someone else sees the potential for that market and they will all of a sudden be competitors, not employees or someone using your service.

The question I'm working around to—I want to know if what I'm saying is correct—is where's your headquarters, and does your web site provide a service in an aboriginal language? That's my first question.

[Translation]

Mr. Bernard Cleary: I'll begin at the end, because the last questions are always much easier to remember.

Yes, we do work in Aboriginal languages with people in the field, for example when we prepare an information campaign and we need to know what the community thinks. As I said earlier, that is why we always work very closely with people from the community, who can better express what we need to know in Aboriginal languages.

So on that point, I would say we could not consult Aboriginal communities properly without doing it in their own language, and then work in the community.

As for competition, I should point out that we have nothing against competitors. That is not what I meant. I just wanted to point out that, after working with us, these competitors had developed entrepreneurial skills, they had learned to work independently, and as a result were able to win a number of contracts in their community. Frequently, they come from the community itself.

Obviously, we might lose the occasional contract that way, but we get others elsewhere. We work differently, in other markets, and in my view competition is better for Aboriginal economic development. I don't think of these people as competitors, really. When I called them competitors earlier, I was just joking.

We have worked with young people who have learned how to be professional, how to be committed. As a result, they find this kind of work interesting, certainly interesting enough to become committed to it themselves. I think there are already four of five consultants making their living this way.

So, we have created a number of jobs indirectly. By encouraging these people, we have helped them become good at their jobs.

You also asked a question about our headquarters. I am from the community of Mashteuiatsh, in Pointe-Bleue. I worked as a journalist in Pointe-Bleue, but there were not many large newspapers there. So I went to Quebec City, and worked as a journalist there for many years. My company has its office in the Huron village. I live there, and they welcomed my company. So our office is in the Huron village. I also live in Pointe-Bleue. I am from Mashteuiatsh, but my office is in the Huron village.

The Chairman: Mr. Beaudet.

Mr. Guy Beaudet: In answer to your question on Aboriginal languages, we are currently planning to have our web site translated into English. That will make it possible for us to reach the 60% of Aboriginals in Quebec communities whose second language is English. We can already reach the 40% whose second language is French. Our third step will be to cover all of English and French Canada.

• 1215

With regard to content and promotion in Aboriginal languages, you will soon be seeing texts written by communities themselves posted on our web site. Aboriginal languages have an oral tradition, and that sometimes creates a problem when it comes to writing or grammar, but we will certainly get far enough to foster and promote Aboriginal languages.

What we would eventually like to do, and soon, as soon as we can, is to add sound—voice recording with a fairly small program. Since Aboriginals have an oral tradition, we will soon be able to record highlights in important speeches, such as a speech by Phil Fontaine on a given issue, or a message by Jean-Charles Piétachau, the Mingan chief, which might have spiritual meaning or be directly addressed to his own community.

Technology now allows us to play texts on the Internet that would otherwise be read. We will be working on this project later on.

Mr. Bernard Cleary: Regarding languages, I would also like to tell you about a project that we've been toying with, that we've been working on. I'm not saying that's going to happen tomorrow morning. But we are working on it, with a university organization called AUPELF-UREF, which is an association of French-speaking universities. We would then like to work with the Association for Canadian Studies and the Canadian Museum of Civilization. We work in partnership with the Museum of Civilization quite a bit.

There is a site on the Internet that is called The Native Trail, and we would like to offer a virtual research centre on Aboriginals throughout the world on this site. Using The Native Trail, we would like Canada to become a virtual research centre on Native peoples throughout the world. We think this would be fairly easy to do. Of course, we were thinking of making this a millennium project, but I think we are going to miss the deadline for the millennium because we have too many things on the go.

This project would be very interesting. It would help protect Native languages. Thanks to this virtual research centre on the Internet, we would be able to protect Native languages. We are well aware, for instance, that the Canadian Museum of Civilization has done fantastic work in this area, and we would try to become part of that.

I must tell you that Japan has asked us to translate part of our site into Japanese. We aren't going to do that tomorrow morning, but it does show just how much interest there is in the site. You can see from such a serious request that there is a lot of interest in The Native Trail. The Japanese are trying to find partners to translate the Native Trail, particularly the areas dealing with tourism, which shows just how interested they are.

English will certainly be of great use to us, because many Japanese people speak English. English will help us once the translation is completed. But we are very pleased that part of The Native Trail may be translated into Japanese.

The Chairman: Your project is truly unique and important. Thank you.

Mr. Finlay.

[English]

Mr. John Finlay (Oxford, Lib.): Thank you, Mr. Chairman.

A very interesting presentation, Mr. Cleary.

I have a question from page 9 on your brief. You say:

The group clearly intends to position itself within the new dynamic established in the recent aboriginal business acquisition strategy, developed for all federal departments and agencies.

You're convinced this measure will have a very positive impact. Would you expand a little bit how you see that working well with the aboriginal economy, and with aboriginal business?

I'm sorry, it's the third paragraph on that page.

• 1220

[Translation]

Mr. Bernard Cleary: We said that we want to position ourselves everywhere in Canada because the procurement strategy allows Native companies to respond to certain calls for tenders.

There are two kinds of contracts. There are what I would call minor contracts, small local ones, and then there are contracts that are national in scope. For example, the army may have contracts that extend to all of Canada. The same thing holds true for Health Canada.

To respond to the demand, because we wanted to have people, we have had to... I should also stress that one of our advantages is that we can work in both English and French. So, we have an advantage over other Aboriginal entrepreneurs. So much the better. It's one of our advantages. We can work in both languages. It's to our benefit.

Furthermore, we favour co-operation with other companies, for example, in the case of a national contract from Health Canada, to fulfill the part of the contract located in Western Canada, or in another region. Of course, we retain control over the entire contract, because we are responsible for it, but as much as possible we try to work with local companies that can help us attain our goals in a professional way. It's also a question of costs.

We don't necessarily want to set up shop everywhere, rather, we are trying to respond to one requirement of the procurement policy. In other words, people don't want to work with five different companies for one single contract. They would rather have one company responsible for the entire contract.

The other thing that Mr. Beaudet stressed, and this is very important for us, is that when we ask other Canadian companies to join us as minority partners and respond to this particular need when it comes up, we can flesh out our own expertise.

It is in our interest to get a contract as lead company because it allows us to learn. Furthermore, this way we also meet the criteria in the procurement policy that says that one supplier can substitute for another, as long as the new supplier offers quality services.

That is why we wrote the paragraph that says we would like to work further afield. We would like to respect the policy and collaborate with other companies. On many, many occasions we have met people from other Canadian Aboriginal companies, and as a result, we can work with them on a number of files.

The Chairman: Mr. Beaudet.

Mr. Guy Beaudet: Let me give you an example, Mr. Finlay. Last week, the government asked us to respond to a call for tenders to evaluate a program for a number of communities in Manitoba.

The federal government chose the Cleary Group after we registered with the inventory of suppliers that Aboriginal Business Canada maintains. It is also found on Strategis, one of Industry Canada's sites. There's an example of an interesting possibility.

It's up to us, the Cleary Group, to respond to this request. Of course, the Canadian partners that we can look for to co-operate with us and bid with us may be in Ottawa, Toronto or Manitoba. That's one specific example.

The Chairman: Thank you, Mr. Beaudet. Mr. Finlay, thank you very much.

Mr. Konrad.

[English]

Mr. Derrek Konrad: Thank you, Mr. Chairman.

I have a quick comment about the team you put together of aboriginals and non-aboriginals, and non-aboriginals not being allowed to buy into the company or anything like that. I'm just wondering if that causes resentment. That's just a comment, and you may want to respond to that.

You talked about the attitudes of bankers and lenders toward aboriginals because of the inability to realize on collateral that might or might not want to be put up. I wonder if you'd like to see amendments to the Indian Act or see the Indian Act scrapped. I wonder if that would help.

• 1225

We talk about aboriginal corporations, but really corporations are neither aboriginal, Christian nor anything else. Corporations are corporations. They are owned by different types of people, including aboriginals of course.

Consequently, does that affect how you manage your company? I understand, of course, aboriginals have different taxation regimes than do the remainder of the Canadian population. Does that affect how you manage your company, and would it be improved if there were changes like that?

[Translation]

Mr. Bernard Cleary: I must have misled you. In the future, Quebeckers and Canadians will not be prohibited from buying shares in the company. I was trying to be very clear that the company will still be mainly owned by Aboriginals. In other words, Aboriginals will continue to hold a majority of shares, let's say, 51%, and Canadians would hold 49%. That is how the company sees ownership of the shares.

Moreover, as an entrepreneur, I don't see how we could profit from incentive programs for Aboriginal companies—I use the word "profit" in a positive way, I don't mean taking unfair advantage of the programs—so, from all the work aimed at furthering economic development for Aboriginals, and then transfer the company to all Canadians by means of some kind of minority partnership. You said that corporations are not Catholic or Aboriginal, and so on, but even so, the main objective of the federal government's incentive program is to develop Aboriginal business. There are also programs to develop Canadian or Quebec business.

We mainly take advantage of programs to develop Aboriginal business. So, I'm not telling you that we want to remain an Aboriginal business because I don't get along with Canadian entrepreneurs. That's not at all what I'm trying to say. Quite the contrary, I get along with them very well. We told you about CGI and Cossette Communications, whom we deal with as equals. Just because a company is large, that doesn't mean that the Cleary Group doesn't work with it as an equal. That has nothing to do with anything as far as we're concerned.

We are Aboriginals, we have an Aboriginal business, our company was built by Aboriginals, and we would like it to stay that way. However, I don't think the procurement policy that provides incentives for us is all that bad. On the contrary, it allows non- Aboriginal companies to benefit from advantages that are granted to Aboriginal companies. At this particular stage—we'll see how things go later, and it will be up to the government to do the necessary analyses to see whether the policy has paid off—this policy helps a company such as my own, which can then sit down with companies such as CGI, for example, and say, "That's too bad, but if you want to work with us, you will have to be the minority partner." What do you expect me to say? That's how it works. I think it's a good policy.

[English]

Mr. Derrek Konrad: Okay. I just want ask whether the Indian Act is a hindrance to economic aboriginal development, particularly section 89. Could these things be amended or scrapped? Would that help?

[Translation]

Mr. Bernard Cleary: In my opinion, the Indian Act injures us. Basically, it really injures us because it does not allow us to mortgage anything at all on a reserve. If I have a house or some other asset with $100,000, I can't use it. Since the asset cannot be seized, I can't use the assets that I have accumulated for economic development purposes.

Aboriginals have been talking about this problem for a long time. Something has to be done so that young entrepreneurs can do the same things as everyone else. What is the exception? There are methods. At one particular time, the Mohawks were experimenting with a rather interesting mechanism.

• 1230

I don't think we should totally rewrite the Act, but if we want to put a mortgage on something, we should be able to do so with our consent. The legislation would have to reflect that. I'm not in favour of doing away with immunity from seizure, but if an entrepreneur wants to mortgage his house or any other asset he should be allowed to do so. He should be able to say, "If I don't meet my obligations, you can seize this asset." In my opinion, this would help aboriginal economic development and would allow us to build things like factories, which normally are of some value in business. If a factory cannot be seized, it will never have any true economic value. So, if we want economic development on the reserves, the things we have been developing will eventually have to become assets in our organization.

[English]

Mr. Derrek Konrad: Thank you very much.

[Translation]

The Chairman: Thank you, Mr. Konrad. Mr. Crête.

Mr. Paul Crête: I just have a very brief question. You have made great strides when it comes to the electronic highway. Could you tell me whether similar things should be done for all the Aboriginal nations of Quebec? Could we significantly improve use of the information highway? Should the government offer a program or take other measures to provide easier, more user-friendly access to the Internet for Aboriginal communities? Do you think that would be a good road to take, or do you think that you've already covered that territory with The Native Trail?

Mr. Bernard Cleary: No, I don't think that we will cover the entire territory all by ourselves. First of all, I think that would be a bit much, and secondly I think it would be pretentious to try, at the very least. On the other hand, I don't think there should be 25 different sites, because we would end up going off in all directions. Of course, I'll start by talking about my own interest, and then I will say a few things about other people's interests. At present, it is impossible for a company like ours or any other company to develop anything at the forefront in the area of the Internet without government assistance. I'm not an expert in this area, but I don't think it will be possible to make a profit on something like The Native Trail, that is to say sell advertising which will generate income, before 2002 or 2005. So, as a private company, we can't develop that, because it is very, very expensive. That's the first thing.

The second thing is that Aboriginal Business Canada is already helping us with development. The Native Trail was set up thanks to funding from Aboriginal Business Canada and the Department of Indian Affairs, who understood what we were trying to tell them, namely that we are well ahead in this area and that's important.

However, some satellite sites will now have to be created, because it's important to be able to access all Aboriginal sites in the same place, which is what we wanted to do with The Native Trail.

We have been partly government funded and we put on our web site, free of charge, things like reserves or economic development projects involving outfitters and we make the link free of charge so that we can become the reference centre. When you are in Europe, say, in Paris, and you are thinking about Native issues, you can get on the Internet and look up La piste amérindienne and everything is there. It was mentioned earlier that 450 firms are listed on our web site. Our numbers are becoming significant.

• 1235

This means that there are 450 Aboriginal organizations that are either located on our site or linked to it. When you visit The Native Trail, you now have access to 450 sites divided into categories such as tourism, etc. We are becoming a sort of web, like La toile du Québec, and as a reference centre we can provide a place for everyone.

This is how we need to develop the Aboriginal file right now. But there is another aspect that will have to be focussed on soon, and we are now working on it with CGI. It is what is called an Aboriginal Internet. There are actually a host of services that could be provided through the Internet. Very soon, it will be possible to link the dispensary at Natashquan with a university or a hospital somewhere else. It is important to know that it is possible already to give training on the Internet through the Aboriginal Intranet. We are currently working on a feasibility study to develop an Aboriginal Intranet to enable the various Aboriginal nations to be as up-to-date as possible regarding self- government issues.

We cannot do everything alone. It is not up to my company to study whether an Aboriginal Intranet would be of interest or would provide a good return on investment. I am quite willing to believe that the desire and ability to do this exists, but...

This is how governments need to get involved in the Internet right now. When the government says that it will enable as many Canadians as possible to be connected to the Internet, this is an example. We want to work to bring that about, but we cannot get all Aboriginal people on the Internet by ourselves. It is impossible.

The Chairman: Thank you, Mr. Crête. Mr. Earle.

Mr. Gordon Earle: Thank you. Do I have enough time to ask two questions?

The Chairman: Yes, go ahead, Mr. Earle.

Mr. Gordon Earle: Thank you.

[English]

First of all, you have spoken quite favourably about the manner in which the federal government has been able to assist you with your business. Have you found any particular barriers, anything you feel we can help you with, in terms of promoting the business? Are there any particular problems?

[Translation]

Mr. Bernard Cleary: There is no doubt that there are some problems. Aboriginal Business Canada, for example, has several times given me an opportunity to take part in meetings with business people and make some remarks. I can tell you that my proverbial frankness has resulted in my saying what I thought from A to Z.

As I said earlier, it is good to discover entrepreneurs, to help them, to train them and bring them along. I feel that that aspect has not been developed enough. That is my personal opinion and that is why I brought it up earlier and am bringing it up again. It is fine to give money, but money can fall into a black hole if you do not know how to use it properly. Rather than having that money fall into a black hole, it might be better to put something in place to keep it from falling. I feel that what will break the fall is support for these entrepreneurs, direction, etc.

I understand that you cannot have officials doing that from start to finish or there would be no end to it. But there are ways of doing this now, including business incubation. It exists and it works. I know an excellent company that would be prepared to do this and that does so on occasion; it is called Group Cleary. We are ready to give this kind of a hand up to enable young entrepreneurs to develop. Obviously, there are costs. And the aim of all this is to create successes.

People often say that among Native people that there are not many success stories. Why do you think that is? We are not more naive than anyone else, but we have not had what we had needed to succeed up to this point.

• 1240

In order to succeed, there is a need for financing, but also for the support of real professionals so that entrepreneurs can develop confidence, become what I call true entrepreneurs and taste success. It is true that companies exist to make profits, but they are not there just to be greedy.

When I see young people at our web site, I feel a great deal of satisfaction as an Aboriginal person. I see that we have done something that is giving results. When a company tells me that it has received 10 calls from people in France or Belgium who want to visit Canada, I feel good. That leads to success. People want to make money, of course, and our company is not a charity, but there are other things that are important as well.

From my point of view, success is an important aspect of economic development. To succeed, people need to learn and know that economic development is not about waking up one morning and saying: "If I could get government funding, I could start a business". That isn't the way it works. That leads to failure, and when people experience failure and disappointment, what do they do? They get into drugs and so on.

I think that it is preferable to do less economic development with companies, but to do it in a more solid way. That is how I see Native economic development. In order for this development to be solid, it has to be done through incubation and support, and not through paternalism. I would not want a government official to go in there and act in a paternalistic way. What is needed is someone who can show people how to go about it. People would probably be surprised by the level of success that brings. I am telling you that if this was developed—and I am saying this sincerely—there would be more successes than one might think. And then people would have a taste of something positive: success.

The Chairman: Thank you, Mr. Cleary.

Mr. Earle.

[English]

Mr. Gordon Earle: You mentioned you receive funds from the Department of Indian Affairs and Northern Development for certain projects. Does the department require you to give a consolidated audit, or a comprehensive audit of all your business undertakings to account for those funds, or is there any special kind of audit that's required?

[Translation]

Mr. Bernard Cleary: I should first tell you that we have unfortunately not obtained funding from the Department of Indian Affairs, but that we are expecting some. As far as Aboriginal Business Canada is concerned, it is clear that there must be accountability. In any case, even if we were not asked, I would say to them: "What are you doing? It does not make any sense to give us money without asking us what we are doing with it".

I can state that we are being asked to be accountable and to submit reports and other documentation as fully as possible each time. Our experience with Aboriginal Business Canada has been a positive one. They are not continually after us. On the contrary, they have acted very properly and it must continue in that way. It would not make any sense for governments to be sending money somewhere and not ask those who receive it to be accountable for it. It is a normal part of economic development. That aspect must continue and be strengthened. I was talking earlier about support and all that, but things must be taken a step further. In my experience, every time we have had access to funding, we have been required to show what we have done with the money.

Mr. Gordon Earle: My question was perhaps not very clear. When you are given funding for a special project, is the project subject to a special audit, or does the audit cover all of your business activities?

• 1245

Mr. Bernard Cleary: It is for the project for which we have received money. If we have received funding for La piste amérindienne or for the development of a particular sector, we report on the particular project. When we apply for the funding of a project, we set out the reasons for our application and provide other related details. We are required to indicate the heading under which the funds will be spent and to submit invoices. For example, if consultants are hired, this must be noted. Each item of the project is then audited.

A comprehensive audit of the business is not required since we do not apply for funding for the business as a whole but for particular projects.

Mr. Gordon Earle: Thank you.

The Chairman: Thank you, Mr. Earle. Mr. Finlay.

[English]

Mr. John Finlay: Thank you, Mr. Chairman. Your concern, sir, and your passion are catching with respect to aboriginal industry businesses.

I just want to follow up on Mr. Earle's question with a specific one, please. Do you or any of your clients or partners access the services of the FBDB, not necessarily for money, although I suppose that's possible too, but for planning and business plans or the assessment of some of the development ideas people come forward with?

[Translation]

Mr. Bernard Cleary: We have not had access to such services from the Federal Business Development Bank because we have not asked for them. We prepare business plans both for our customers and for our business when we undertake development projects. To a large extent the business plans are developed by us, they are filed, audited etc.

We do our banking with the Bank of Montreal. As I mentioned, when we go to the Bank of Montreal for a loan or some other kind of service, the problem of endorsement comes up. Whenever we go to the Bank of Montreal, it asks for endorsement from the federal government. That means we have to demonstrate to the bank that our project is profitable for the bank to agree to fund it, even though it is endorsed by the Government of Canada. If the bank got involved in a project that didn't make any sense, it seems to me the Government of Canada would refuse.

So that is the kind of thing we have to do. As I said, we try to limit as much as possible our applications for funding, not because we don't want money but because we want to do this as seldom as possible. We make applications for projects as important as The Native Trail or La piste amérindienne, projects that are too large for our company alone to support. In other cases, our philosophy is to carry out a feasibility study for each individual case.

Let me give you a precise example. We once came up with the idea of getting involved in mini hydro-electric power stations. I know some very competent people, including a Hydro vice-president, with experience in this field and I asked him to come to work with me. We started our first studies some two and a half years ago and slowly we began taking action. We started working on a small contract, then a second one, etc. This was a kind of feasibility study through action by taking on one contract, then another etc. We were paid as consultants and at the same time we acquired some expertise in this area. That is how we did our feasibility study. As I told you, it often happens that we start getting slowly involved in projects. That is the way I built the Cleary Group, slowly but surely.

• 1250

In the case of gourmet Native cuisine, for example, we've started something fantastic. Nestlé and our company are looking into to frozen products. We started discussions with KLM and First Air on the possibility of offering gourmet Aboriginal cuisine in first class and business class. We've slowly built some momentum. We're also working on this with the Canadian Embassy in Paris. The market is developing piece by piece. We often do our feasibility study this way working on it at the same time as we carry out a contract etc., etc.

That is why I say that we do not invest a great deal in that. Vincent can perhaps give you some clarification, being a specialist in the matter. It's something I started to get involved in rather late.

Mr. Vincent Poulin: Thank you, Bernard. Previously someone asked a question about the attitude of bankers, different opportunities or problems and the Business Development Bank of Canada. Over the past several years, there has been an obvious change in the banks. They are now more positive, having certainly observed that the Aboriginal market is just as profitable, in the same way as deposits are particularly profitable with all the money from land claims in circulation. They are very interested in having a lot of deposits.

Most banks now have an Aboriginal vice-president, including the Canadian Business Development Bank of Canada. Unfortunately bank culture itself has not changed. Their attitude to Aboriginal clients is still the same. The Aboriginal client will always be compared with the non-Aboriginal client and the Aboriginal business with multinational businesses with their lawyers, accountants etc. Access to bank funding, including the Business Development Bank, is unfortunately not easy. It is as difficult as it used to be. As soon as an Aboriginal business starts having some difficulties, people do not limit their remarks to this particular business but say that all Native businesses are having trouble. They're put in a separate category and that is the end of it, they're not successful and there goes the credibility of the Cleary Group, along with the others.

That is when they rely on the crutch of a government guarantee. But it is a crutch for the business because whenever it wants to obtain funding, it has go through two processes, that of the bank and that of the government guarantee. It can take between three and six months, the opportunity passes by and then they say the business wasn't successful. But it wasn't able to get any support when it needed it.

Shouldn't banks be required to reserve a certain part of their funding for Aboriginal businesses? Could they be forced to invest 5% or 3% of their funding? It could be something like the federal procurement policy and the decision to set aside a part of government contracts for Aboriginals. At the end of the year, they could be asked to report on the number of businesses they financed. That might give them a push in the right direction.

The Chairman: Thank you, Mr. Poulin.

Mr. Beaudet, in conclusion.

Mr. Guy Beaudet: To come back to Mr. Finlay's question, I'd like to talk about our experience in certain development projects, including a tourism development project with partners in the Quebec City area. It is not a matter of course for an Aboriginal business to apply directly to the Canada Business Development Bank in the case of such a project that met the general guidelines of the Canadian Tourism Commission, with an overall envelope of 500 million dollars available for tourism development in Canada as a whole. Generally speaking, we are quickly referred to Aboriginal Business Canada, with a more restricted mandate in terms of financial support to Native businesses.

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Aboriginal businesses are going to have to learn to deal with other government programs than those exclusively reserved for Aboriginal businesses. There are a great many programs available to business and it would definitely be to the advantage of Aboriginal business to obtain some guidance in how to use these programs that are as much for their benefit as for that of the Canadian businesses. There are some good programs. We may have to do something to bring them together.

The Chair: Mr. Cleary.

Mr. Bernard Cleary: I think that limiting Aboriginals to a particular small program here and another small program there ends up marginalizing them. I think that was the point Mr. Poulin was making.

We have been marginalized in the banking sector for a long time, and I think that may remain the case for a long time yet, unless and until we get strong support from the government. That does not mean...

The Chairman: Are you going to call on Mr. Michaud?

Mr. Bernard Cleary: Yes, I'm prepared to call him. It's not as though the poor banks are not making any profits. I think that their profits are such that they could afford to spend a little money in other areas, without running any great risks.

The same is true even at Aboriginal Business Canada. It is always the same story. We often go through the same procedure. They must think I come to see them often to present projects. For us, the procedure is always the same, whereas for IBM, there are 25 different options available for all sorts of things.

If, for example, we want to go to Haiti to take part in a mission, we have to go through Aboriginal Business Canada. If we want to attend another event, once again we must go through Aboriginal Business Canada. In other words, we are always going through Aboriginal Business Canada.

The point Mr. Beaudet was making earlier is important. As the Economic Development Agency does for the regions of Quebec, I think that Aboriginal Business Canada must be able to tell us to go and knock on a different door. I think that could be one of the roles of Aboriginal Business Canada—namely, directing us to the right place. Since it is part of Industry Canada, they must be more familiar with the programs than we are. That could be very helpful in promoting native economic development.

The Chairman: Thank you, Mr. Cleary.

Mr. Beaudet.

Mr. Guy Beaudet: I would just like to add that the Economic Development Agency is working for us at the moment to find funding for a project we have submitted. Its purpose is to find out what programs are available from the Quebec government and the federal government.

My point is that the Economic Development Agency is not necessarily the best place for a Native business to go to seek information. Consequently, I think that Aboriginal Business Canada should provide us with guidance, unless the Economic Development Agency improves its program for Aboriginal businesses.

The Chairman: Thank you.

Is that all, Mr. Finlay?

[English]

Mr. John Finlay: No, thank you very much. Merci beaucoup.

[Translation]

The Chairman: In closing, I would like to ask you a brief question, Mr. Cleary. Do you have any dealings with the Inuit in the North West Territories, Nunavik in New Quebec?

Mr. Bernard Cleary: I must confess that, unfortunately, we have less regular dealings with them. At one time, we worked with their Montreal office, with the Makivik Corporation. But that is one of our shortcomings. We are going to try to gradually begin dealing with them and particularly try to... Usually we like to meet with people in the community before getting involved otherwise, first of all, because program implementation is easier when we are familiar with the community. In the case of the Inuit, I must acknowledge that that has not yet been done.

The Chairman: But you were mentioning First Air a few moments ago. As you know, First Air is owned by the Inuit.

Mr. Bernard Cleary: Yes, of course. We had one meeting with First Air. We have had contacts with them previously. We told them that it would be quite normal to serve Aboriginal food on the First Air flights. They found that most appropriate, and the meeting should produce some conclusive results in the next few weeks. So, to that extent, we are working with them.

The Chairman: Thank you very much. That is all I wanted to ask.

Do you have any other questions, Mr. Konrad?

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[English]

Mr. Derrek Konrad: Oh goodness, I probably have 20 of them.

I have just a quick question on your web site. You have had, I hear, 10,000 hits on this thing. How does that line up with other web sites? Is that a good usage? How effective is it and how justifiable is it, given the federal government's input into it? Do you feel that was a good investment?

[Translation]

Mr. Bernard Cleary: I think this is an excellent investment for the government. Eight thousand to ten thousand visits to the Internet site is a significant number. Guy could tell you more about this than I, because he is crazier about the field than I am. For example, an ordinary site of a business such as ours might have between 1,000 and 2,000 visits each month. And that would be a large site. So that gives you a comparison.

Another even more interesting fact that shows how successful this is the number of visits or clicks...

[English]

Mr. Derrek Konrad: Just before he answers, there's one other question. Have any partnerships or any businesses actually developed from the hits? I guess that would be another way of answering that effectiveness question.

[Translation]

Mr. Bernard Cleary: Yes. For example, Hydro-Québec and the Caisse de dépôt et placement, which are senior players, not juniors, have become our partners, because our site is a model site. By the way, I would invite you to visit La piste amérindienne and The Native Trail and have a look at our home page. This is definitely a high quality site. I'm not saying that because it is our site, but rather because this has been recognized. In 1997 and 1998, our site was judged as one of the 100 best sites in Quebec. It is a model site which attracts many visitors and provides a great deal of information. It is a good product.

Guy could provide you with more information.

Mr. Guy Beaudet: To answer your question, The Native Trail is a site that promotes and provides information on aboriginal peoples. It introduces other Canadians to Aboriginal peoples.

I think the site is extremely cost-effective for the government because it tells non-Aboriginal Canadians about the Aboriginals of Canada. I am absolutely convinced of that. We hear a great deal of feedback which confirms that people learn more from an Internet site such as this one than they learned in the last 20 years by reading about Aboriginals in the newspapers. We present Aboriginals differently from what you might find in a newspaper report about the Oka crisis, the reaction of a particular community, Aboriginals who do not pay their taxes or do not do this or that. We present Aboriginals in a much more positive light. Visitors to this site get information that is totally different from anything they regularly see in the mass media.

Second, we worked on a site in co-operation with Cossette Interactif, a subsidiary of Cossette Communications. We developed some relations with these people when we worked on a graphic design, and as a result we established a joint venture and bid on federal government contacts for supplying such services and communications generally. The firm has offices in Quebec, Montreal, Toronto and Vancouver.

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This is a concrete example of a joint venture, of the high profile of The Native Trail and the credibility that this has brought to Aboriginal business.

In terms of cost-effectiveness, we are actually positioning some Aboriginal businesses at the moment. On the home page of The Native Trail, there is a logo called Waskak at the moment. An Attikamek CD-Rom will be officially launched on the market Thursday in Montreal, as part of the conference on the international information highway. We are positioning Waskak free of charge to make it known to all the multimedia people. We're sure that this will result in some spinoffs for the company.

Finally, I would like to mention one statistic. In February 1997, The Native Trail included a single Aboriginal tourist business with a web site. Today, there are hundreds of them. Thus we think The Native Trail, La piste amérindienne has helped make Aboriginal communities and businesses aware of the information highway. We hoped they would do that and they did. That is a good thing. This is an area in which, for once, the Aboriginals will not be behind.

The Chairman: Mr. Konrad.

[English]

Mr. Derrek Konrad: Thank you.

[Translation]

The Chairman: Mr. Earle.

[English]

Mr. Gordon Earle: I have nothing.

[Translation]

The Chairman: In conclusion, I have a question. Mr. Poulin was saying that one dollar in the area of tourism was worth close to four dollars. But the non-Aboriginal public in Quebec and Canada seems to think that we give millions of dollars to Aboriginals, without knowing what they do with it. There is one thing that I do know, and I wonder whether your group shares my perception: when we make a one-dollar contribution or grant in the North, be it in Nunavik, the Territories or elsewhere, the Aboriginals make purchases throughout the provinces. For example, in Quebec, when we invest a dollar for the Crees or Inuit from Nunavik, I've always considered that 95 to 97 cents come back to the south, because in fact, they purchase everything in the south. A loaf of bread costs from $1.10 to $1.19 here in Ottawa, or Quebec City, but it costs $3.20 in the North.

Mr. Cleary, in the context of economic development, could you tell us whether making a contribution to the Aboriginals is truly of benefit to all Quebeckers and Canadians?

Mr. Bernard Cleary: The truth of your statement is quite obvious. I have had many occasions to debate this subject. I'm thinking of the Attikamek who have a centre in La Tuque. At some point, there was a tournament—and you know how these things often happen—and people had been drinking and some of them had wrecked the room, like our Ontario residents do when they come to Quebec. That led to a fight. They asked me: "Bernard, would you come with us to meet the town representatives?" I answered: "Yes, with pleasure." I did go to meet with the municipal representatives and I told them that they should thank the Attikamek for being in their town, because the Attikamek of La Tuque constituted the second largest industry in the region. There was a forest industry there, and the Attikamek came and spent almost all of their money in La Tuque, when they stayed in their hotels, when they came to buy their Christmas presents, etc. I told them: "You should thank them instead of harassing them, because they represent huge economic spinoffs."

We had made the same point in Val-d'Or with the Cree. They came to realize that the Cree spent most of their money in Val-d'Or and were a major asset to the town. When the Cree decided to come to Val-d'Or less often, they were begged to come back.

Basically, what you are saying is correct. The money does not stay in the communities, and this is sometimes unfortunate. More of it should stay there, but that is not the case.

I come from Mashteuiatsh, and where do you think I spend my money? In Roberval. This is where everyone goes to buy their shirts and pants and jeans, etc. We Aboriginals are not great savers, this is where we spend our money. So then, we represent a real benefit.

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I will conclude by saying that the problem, as the Minister outlined in her program, is that people are poorly informed about Aboriginal affairs.

Each time I participated in negotiations in the past 12 to 15 years, I have always said that we should begin by informing the people in the area of what is going on. We are not cooking up privileges, but rather negotiating reasonable things that will have positive spinoffs in the regions where...

[Editor's Note: Inaudible] In my opinion, we have to insist on educating the public about Aboriginal affairs. I think that it will take five to six years to change Canadians' and Quebeckers' perceptions of Aboriginals, but it has to be done. And this can only truly happen through providing the correct information. How many people in Roberval know or want to know that we spend all of our money in their region, and that it is perhaps because of the Montagnais in the area that a young kid will have a job? How many of them know this? Not many, I would think, and they should know it.

The Chairman: Thank you, Mr. Cleary. Mr. Beaudet.

Mr. Guy Beaudet: I would like to say that this issue of informing and educating the general public will be extremely important in the coming years. The partnership will not be renewed if non-Aboriginals receive poor information about Aboriginals. I am living proof of that. Years ago, I knew nothing about Aboriginal affairs. By getting to know Bernard, Luc and the other Aboriginals in the Huron village and working with them, I have gained an understanding of Aboriginal issues. I got interested in the subject, and, today, I am promoting Aboriginal issues wholeheartedly, because I have become informed. If I had not had this opportunity in my life, I would perhaps have the same opinion that many Canadians may have about Aboriginal affairs.

This is why I think it is extremely important that governments support products such as The Native Trail, because it is also designed for non-Aboriginals. This is how we will inform the general public about these peoples who have been here for more than 3,000 or 4,000 years.

The Chairman: Thank you very much. Thank you, Mr. Cleary. Today you are going to be on the Parliamentary trail, because your comments will be broadcast on the Internet throughout Canada and the world.

I would like to thank you for having explained, from the Aboriginal point of view, the economic development that is being shared by Aboriginals and non-Aboriginals. I would like to congratulate you and your team for your statement here today, that will benefit all Canadians. We will follow the Native Trail.

Mr. Bernard Cleary: Thank you very much, Mr. Chairman, it was very kind of you to invite us. We have really enjoyed the exchange. If it is helpful, all the better.

I would like to point out that your kit includes a small item for internauts. It is a mouse mat, part of our promotional material that we are offering you as a gift. It shows the number of the Groupe Cleary and of the Native Trail. If you don't use it, give it to your secretary; she will enjoy it. It's really fun to use. Your folder also contains documents. Thank you, everybody. It was a pleasure.

The Chairman: Thank you, and have a good trip home. We look forward to meeting you again.

The meeting stands adjourned.