Coon Come wants reform of Cree Economic efforts

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After a decade of sinking money into Cree economic development efforts, a controversial new study says the efforts are a failure and cost Crees millions of dollars.

Cree-owned economic development companies lost money in eight of the last 10 years and created relatively little employment for Crees, says the study commissioned by the Grand Council of the Crees. Crees could have made $60 million more just by investing the money in mutual funds.

The study, now circulating among political leaders of the 12,000 strong James Bay Cree Nation in northern Quebec, has touched off a wrenching debate about the direction of Cree economic development efforts during the past 15 years.

"I believe that the status quo is not viable and that it is time for major changes," says Matthew Coon Come, Grand Chief of the Grand Council of the Crees, in a confidential Jan. 19 letter to Cree leaders. "We must be more accountable to the Cree people."

In the letter, Coon Come calls for a perestroika-like overhaul of Cree Regional Economic Enterprises Co., the holding company for the five biggest Cree-owned companies, including financially troubled Air Creebec, which lost $5.8 million last fiscal year. CREECO's overall deficit last year was $6.1 million, based on revenues of $93 million.

The last year CREECO made money was 1988. As well, according to figures from the Grand Council, Crees were outnumbered three-to-one by non-Cree employees at the largest three CREECO companies, Air Creebec, Cree Construction and Cree Energy. A disproportionate number of Cree employees are in seasonal jobs, while whites tend to hold down more higher-paying, upper-level permanent positions.

The study is a major blow to Crees who hoped that CREECO's economic development efforts would create jobs at a time of 30-per-cent unemployment in the nine Cree communities in the James Bay region. It was also hoped Cree society would become more prosperous and self-sufficient. Instead, CREECO has repeatedly dipped into heritage funds granted to Crees as compensation for hydro-development projects that flooded much of their ancestral lands.

The study says CREECO drew $45 million from Cree heritage funds between 1984 and 1993. But due to chronic losses, the holding company was worth only $23 million last year. If the $45 million had been invested instead into mutual funds, it would be worth $85 million today, the study found. If the money had been invested in pension funds, it would have yielded $75 million.

"The analysis shows that we have not been very successful in creating Cree employment and that CREECO is not profitable," Coon Come wrote in his letter. "It depends upon the heritage funds every year. This dependence weakens the Cree Nation."

CREECO president Abel Kitchen conceded in an interview that many of Coon Come's concerns are valid, and said discussions are scheduled between CREECO executives and Cree political leaders to discuss the problems.

"This is the kind of thin that needs to be said. It's true what is being said here."

But he cautioned that CREECO should not shoulder all the blame for the economic woes. The ultimate decision-maker in the distribution of Cree heritage monies, Kitchen said, is the Cree Board of Compensation, which manages the heritage fund.

"They're the people who disburse the money and make the policy."

The chair of the Board of Compensation, Roderick Pachano, was less receptive to Coon Come's criticisms. He dismissed much of the Grand Chief's letter as "old news", and said Cree-owned companies have already started restructuring to improve their fiscal situation. He noted that Air Creebec, in particular, has shed one-third of its employees over the last two years, and some top-level managers have been replaced at CREECO.

But he conceded that some of the disappointments over the economic-development efforts are valid.

"There's too much dependency on non-Crees to run these companies. When they started, it was supposed to be for th Crees, by the Crees. It didn't turn out that way."