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Rich band, poor band
More and more, Aboriginal Peoples and communities are seeing their wealth expand — the result of investing land settlement claims, business creation and increased levels of education. But aboriginals themselves worry that, without the skills to manage their money, it could go to waste. According to a TD Bank special report, money controlled by aboriginal households, businesses and government sectors in Canada is estimated at $24 billion and growing. At the current rate, by 2016 the wealth held by this demographic will be more than the GDP of Newfoundland and PEI combined. Aboriginal Affairs and Northern Development Canada predicts that between 2001 and 2026, more than 600,000 aboriginal youth will enter the labour market. The 15- to 29-year-old age group is set to grow by almost 40 per cent compared to only 6 per cent for the non-aboriginal population. With aboriginal youth representing one of Canada’s fastest-growing populations, and with income levels on reserves rising, financial literacy in aboriginal communities may mean the difference between an opportunity reached — or breached. A shift in thought The federal Task Force on Financial Literacy defines the subject as increasing the knowledge, skills and confidence of Canadians to make responsible financial decisions.
“I see a real shift now within the thinking of many First Nations and that all relates back down to financial literacy — understanding that money can grow and be a useful tool for generations not just for the immediate,” says Mike Mearns, the general manager for the British Columbia branch of the Aboriginal Financial Officers Association. Mearns got his first lesson in money at age 14, from the parents of a non-aboriginal friend. They asked Mearns if he knew the difference between something that appreciated in value versus something that depreciated. He didn’t have a clue what they were talking about. In his community, which sat right next to a reserve on Cortes Island, B.C., money management skills were not taught. Wealth, says the member of Klahoose First Nation, was not accumulated the same way, so there wasn’t the same need to teach their children about it. “On reserve, they don’t have homes and properties that accrue in value.” Instead, Mearns grew up watching his non-aboriginal friends get financial advice from their parents. “As I finished school and went to work, (managing money) became a more important lesson for me. Right from a young age that was a goal because it became a goal of my friends, whose parents taught them the importance of purchasing a home.” Mearns was lucky to have understood basic money management skills in his teenage years and now uses it to bring awareness of financial literacy to First Nation populations. His experience was uncharacteristic of most of his aboriginal peers, however. “Financial literacy should be taught in any school, all schools. It’s a lesson about what money is. It’s a tool for you to use in any which way you want,” he says. "If you don’t have money to begin with, you’re not going to know how to manage it." Money management skills, including understanding how banks, investments and credit cards work, are seldom taught on reserve, even with the improved financial prospects. Helen Bobiwash, an aboriginal member of AFOA who now owns an accounting company in northern Ontario, says harnessing the talent of tomorrow’s working-age population is crucial. “Aboriginal youth are going to be running the communities,” she says. “They need to learn these skills.” But these finance skills are not often present in the impoverished environments in which some aboriginal youth grow up. “If you don’t have money to begin with, you’re not going to know how to manage it,” Bobiwash says. “How do you get them from being on welfare and unemployment to being a contributing member in their community?” Walking through a Canadian reserve, it may not be uncommon to find overcrowding in houses, lack of proper maintenance of buildings, unsafe drinking water, mould in infrastructure, and general poverty. A status report released by the Auditor General in June 2011 cited these and other issues as contributing to the special challenges aboriginals face on reserve. It noted, “The adequacy of housing on reserves can affect the health, education, and socio-economic outcomes of First Nations members.” According to Statistics Canada, Aboriginal Peoples have the lowest life expectancy in the country, are most likely to live in houses requiring major repairs, and have a lower median total income. The 2006 census reports that the employment rate for First Nations people living on reserve is 52 per cent, and one-third of all aboriginal adults have less than a high school education. But not all negative stats can be chalked up to the failing system. A different perspective Mearns says a unique worldview and distinct economies set aboriginal communities apart from the rest of Canada and may account for some of the reasons financial literacy has been troublesome. “Reserve economies are different,” he says. “In our past, everything was shared. The Potlatch system in British Columbia was the total opposite economic model of that of the British who came to the country.” He explains that instead of acquiring wealth for oneself, which meant power for an individual in the British system, the aboriginals defined success through how much acquired wealth a person gave away. Aboriginal Truth and Reconciliation officer Tim O’Loan agrees, adding that school is regarded differently in these communities. O’Loan says the prevailing negative attitude toward education in many communities stems from ever-present dark light of residential schools. “People wanted to leave these institutions as quick as humanly possible, either running away or getting out as soon as they were of age,” the descendent of residential school students says. Survivors, he continues, who are only one generation ahead of him, don’t pass on positive viewpoints of the education system, as they were the ones escaping it. Other challenges to financial literacy include the language barrier for many youth, lack of access to adequate banking, geographical remoteness and cultural irrelevancy of programs. If these issues aren’t addressed, the potential influx of money into aboriginal communities may be squandered.
A pivotal time The aboriginal population has been the recipient of booms in the resource and business sectors over the past decade, according to the TD Bank report. The demographic has also contributed to this growth by filling potential labour shortages. Additional gains in income are expected if commodity prices remain buoyant. The AFOA is developing a number of programs that aim to be culturally relevant to aboriginal youth. The organization’s learning material includes cartoons of animals, like moose, squirrels and turtles to help engage young readers. A workshop to teach financial literacy in schools with large populations of aboriginal students is to be introduced this winter in Saskatchewan. Financial literacy proves necessary not only at the individual level but on a community basis as well. Federal payments to reserves, called Transfer Payment Programs, give the authority to administer programs to band councils. The Department of Aboriginal Affairs and Northern Development is accountable to the government for how these funds are spent. With power being transferred from Ottawa to community leaders, knowledge of sustainable saving and spending becomes crucial. “If you never learned financial literacy skills, the money is gone in the blink of an eye.” Mearns says it’s dangerous to give money to communities whose members may not have the skills to manage it. “If you never learned financial literacy skills, the money is gone in the blink of an eye.” The effects of sound financial literacy skills reach even further than this, as they can be a catalyst for continuing education. Understanding the importance of finance could improve youth’s chances of going to university or college. Putting skills to work It is this goal of higher education that has driven former prime minister Paul Martin and others to implement programs designed to teach aboriginal youth the value of money to secure their future. In 2008, Martin and his family created the Martin Aboriginal Education Initiative. The foundation initiates and supports projects in aboriginal schools across the country to give students an incentive to continue their studies and obtain marketable skills. One program is a business course based on a project introduced at an inner-city middle school in New York City aimed at teaching youth to be entrepreneurs. Martin took the American course and married it with the best business curricula to adapt it for Canadian aboriginal schools. The course offers students the chance to gain fundamental financial literacy skills through creating their own small business with a start-up fund. First introduced in a reserve school in Thunder Bay, and taught by a Cree teacher, the program is now in schools in Manitoba, Saskatchewan, Alberta and British Columbia. The first-ever business books for indigenous high school students were created to support the program. “This is a good intention," O'Loan says, "but the priorities need to come from the communities." For Mearns, it’s about using financial literacy as a tool to enjoy a career and to enjoy life — not about making your life goal to earn money. “That’s a lesson that not just aboriginal people need to learn — all of us need to learn.” |
A demographic on the rise
Source: Statistics Canada |
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