A prominent Canadian Mohawk chief once described Ronald Jamieson as having a moccasin in one community and a black dress shoe in another.
Jamieson is a Mohawk who lives on the Six Nations reserve west of Hamilton, Ontario, the steel-making center. His sister is the elected chief of the reserve. But Jamieson usually gets home only on weekends; during the week, he is at his desk at the Bank of Montreal in Toronto, where he is a senior vice president and in charge of the bank's Aboriginal banking unit.
PHOTO: THE NEW YORK TIMES
Canadian financial institutions are paying more attention to the nation's 980,000 native people, defined as North American Indians; Metis, or people of mixed blood; and Inuit, also known to Americans as Eskimos.
With help from billions of dollars in land-claim settlements and joint ventures with established corporations, these groups are starting more businesses in Canada. According to Jamieson, the Bank of Montreal's loans-and-deposits business with native communities has shown "double-digit compound growth, and we see this continuing."
Jamieson, 55, said there were many naysayers when he arrived at the Bank of Montreal in 1992 to set up its Aboriginal unit. Many of Canada's 600 native communities are in remote areas, accessible only by plane or boat. Most are mired in poverty, with towering unemployment and wrenching social problems, including high rates of alcoholism and suicide.
Part of the job is dealing with outsiders' misperceptions. The stereotype "of Indians being a lazy lot who can't look after their money just doesn't hold up," Jamieson said.
Financial institutions face an obstacle in the form of the Indian Act, the law governing native communities and their relations with outsiders. Under the act, people living on reserves are not permitted to pledge their homes or other assets as collateral for loans. Furthermore, few native people are willing to incorporate their businesses because, under the law, they would lose their exemption from income taxes by doing so.
But for Canada's big banks, these drawbacks are gradually being overshadowed by an awareness of the potential market. The native population grew 4.1 percent a year, on average, in the five years ending in 2001, five times the national average. More than two-thirds of native people now live outside reserves, and education and income levels are rising.
Several communities have also gained financial muscle as a result of payments by the federal government to settle claims over ancestral lands. These payments so far total US$1.2 billion and have spawned a number of sizable businesses, including airlines, construction companies and hotels.
Brian Gibbings, an investment management consultant in Toronto whose clients include the Inuvialuit Regional Corp of Inuvik in the Northwest Territories, said that Aboriginal groups "are much better advised now than 15 or 20 years ago."
"They're a match for the banks and the oil companies when it comes to negotiating," Gibbings said.
Typically, the land-claims settlements also grant communities a measure of self-government and part of the royalties from mines and oil and gas wells. Mining and energy companies operating in or near native communities are increasingly sourcing out work to local contractors. BHP Billiton Diamonds, which operates a large diamond mine in the Northwest Territories, estimates that it placed orders worth US$123.6 million with native businesses in 2002, an increase of almost 17 percent from the previous year.
Reflecting a more assertive approach among a new generation of leaders, Bernd Christmas, chief executive of the Membertou First Nation in Nova Scotia, said that "the reliance on government dollars can't occur anymore."
"We were once self-sufficient and self-governing, and there's no reason why we can't continue to do that in modern times," Christmas said.
The Membertou band employs 370 people in businesses that include fish processing, civil engineering and catering. The band has run a surplus on its budget since 1999.
Joseph Tokwiro Norton, grand chief of the Kahnawake band south of Montreal, said his community increasingly needed the banks and other financial institutions as partners for business projects, which include a company providing software for Internet gambling, a campus for technology businesses and plans for a port on the St. Lawrence River.
According to the latest national census, 27,000 businesses, 28 percent more than in 1996, were owned by native people in 2001. The number who were self-employed grew by 5.5 percent a year from 1998 to 2001, or 10 times the rate among other Canadians.
Christmas said the Bank of Montreal was "way ahead in the beginning" in spotting the potential of the market. Jamieson, he said, "explained to people how to bridge the gap between their communities and Bay Street," referring to Toronto's equivalent of Wall Street.
Jocelyne Soulodre, president of the Canadian Council for Aboriginal Business, which promotes greater involvement in the mainstream economy, said the Bank of Montreal's commitment "goes back to a time when it was fairly unusual." Jamieson, who is the council's co-chairman, "saw this organization through some pretty rough times," Soulodre said. "He stuck it out."
The bank, which is the smallest of Canada's big five banks and owns Harris Bank of Chicago, has opened 17 branches on Indian reserves.
Sometimes, its chairman and chief executive, Anthony Comper, attends the opening ceremonies.
To overcome the Indian Act's ban on direct mortgage lending, the bank has negotiated deals with 19 communities for their band councils to act as its agents. As Jamieson describes the arrangement, the councils "agree to assist us in collecting on our loans."
So far, Jamieson said, the bank had advanced close to US$50 million in housing loans without one foreclosure. The proportion of write-offs on loans to native-owned businesses is less than half the bank's overall bad-debt record, he said.
All of Canada's major banks, as well as Quebec's caisses populaires, or credit unions, now offer similar services through aboriginal banking divisions. The Toronto-Dominion Bank has set up a separate subsidiary, known as First Nations Bank of Canada, in partnership with the Federation of Saskatchewan Indian Nations.
In spite of the successes, Jamieson said that "the reviews would be mixed" on the record of aboriginal businesses. He said that many enterprises remained undercapitalized and that their owners were often disadvantaged by a lack of financial expertise and their remote locations.
True success, he said he told a former chairman of the bank, would come "when you don't need Ron Jamieson here."
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