I too would like to thank the committee for the opportunity. It's kind of overwhelming to me, as a first nations manufacturer, because I know there has never been a time in history when a first nations tobacco manufacturer has actually been allowed to have input into these kinds of hearings.
We've been licensed as a tobacco manufacturer in Canada since 1997. We've contributed around $500 million in tax revenue, from which we've yet to see benefits come to first nations communities. This makes it all the harder for us as a company when we go out and try to lobby first nations governments as a whole to participate in levelling the playing field, which is drastically.... As my colleague pointed out, we're out there trying to sell a bag of tobacco products for somewhere in the vicinity of $28 to $35, and we have other people out there selling them at $6 a carton.
You know, the idea of allowing first nations people the ability to place taxation on the products themselves is not new. I can remember, as early as the late eighties and early nineties, coming to former governments prior to this one and actually suggesting these same ideas. Basically, they didn't even have the time of day to listen to us. I remember sitting with someone as high up as the then-Minister of Finance, I think Mr. Anderson, and telling him that to really get our people to buy into these programs, they were going to have to see some of the benefits of this revenue helping first nations people.
With that in mind, I also have to say that the overall problem with the industry as a whole right now is the word “legal” recognition. Legal recognition is the hardest part of the industry as a whole.
Our company has chosen the avenue of taking on a tobacco manufacturer's licence. Up until eight years ago we were perceived as almost iconic heroes in our community. Under the guidelines of the federal government, paying all the applicable federal taxes, our company flourished. We also founded one of the very first charities among first nations, the Dreamcatcher Fund. We've contributed over $10 million to that. The spinoff effects of our company alone have created over 1,000 jobs on first nations communities, all under the guidelines of paying the applicable federal taxes.
I see the chief of the Akwesasne reserve here. I can totally understand, from her perspective, how it must hurt to sit there and have her people demonized as criminals. It's almost a savage-like environment. As soon as they point out there's a problem with tobacco, they say, “It's got to be Akwesasne”. And that's the core of the problem.
I've never once heard that we should find out who supplies the raw materials to this industry and bring them to task. I can guarantee you that CEOs of publicly traded companies don't like to be indicted, and people of first nations descent who are in desperate situations are easily capitalized on. But I don't know how you're going to be able to manufacture tobacco products if you can't source out the raw materials.
Let's talk about the health ramifications and other things. If you believe for a second that first nations people don't have their own youth to consider, you really have to....
Let me give you the mindset of our young people. Let me give you the mindset of being a young first nations person going to high school: leaving your community on a bus, getting to the end of your territory, seeing probably 40 or 50 OPP officers sitting outside the edge of your reserve because of unresolved land issues, and thinking you're going to change your life, you're going to get a job. So you go back to your community. But the only opportunities that present good employment on our first nations territories right now are tobacco-related.
In terms of the transition period, just like the tobacco farmer.... I'm very proud to say that at Grand River Enterprises, all of the tobacco content in our tobacco products--plus we happen to pay all applicable federal taxes--is 90% domestically grown.
Now, I don't want to sit up here and try to be like an advocate for tobacco and be attacked by all of the public health concerns and stuff. From a global perspective, we are recognized as the pioneers of making people aware of the ramifications of tobacco products. Our products display health warnings to put us on a level playing field with our competitors. But when you have things like this happen--your product is being blatantly counterfeited and sold right in your own communities--it's discouraging.
Whether you're pro tobacco or not, there is nothing to disclaim the things that we've been asked to put on these packs. There's no proof from an industry standard that we can say to you that smoking is not bad for your lungs or that it doesn't hurt you. So we don't have any medical evidence to back up anything different, and we have a responsibility to put those health warnings on those packs. Our company is a first nations manufacturer, and we took it upon ourselves to adhere to all those guidelines, only to be slapped in the face and have our product counterfeited and put right on those same packs.
In this public forum I would also warn all first nations communities that allowing the organized crime element to come into first nations territories is like allowing wolves in sheep's clothing into your communities.
There seems to be some confusion over who has the ability to tax the product, and we're all waiting. I met the former chief of Akwesasne, Chief Mitchell, when I walked into the room. When he and I were trying to pioneer these arguments, we were much younger men. There have never been changes brought about on the whole aspect of jurisdiction and who has the ability to tax these products. We still don't have it 20 years later. If we're going to base all of our actions on the fact that we're going to have to figure out who has jurisdiction over the territories first, I'm really concerned that absolutely nothing will get done.
As the CEO of this enterprise, I'm very concerned that our products are blatantly displayed in first nations territories. The RCMP reported there were something like 140 different organized criminal elements working along with first nations people as a whole in the tobacco industry. I speak only as an individual. I'm not a hereditary chief; I'm not currently elected as chief of a first nations territory. But I don't want, every time a committee talks about our people, to have them perceived as embracing organized crime and wanting those activities to take place on their reservations.
You're going to hear from another man who is chief of a reserve and also pays all the applicable federal taxes. I'm not here to argue the tax jurisdiction. I'm here to make you aware that you cannot make tobacco products without raw materials. It's only just recently, thank goodness, by the actions of the government that you've restricted tobacco machinery from getting into the hands of these operations. I applaud you for that. It was a great first move. Now take all of the other necessary steps to at least make sure that there's total transparency in the industry as a whole.
We can walk through who has jurisdiction over the taxation at a later date, but everybody knows what it's like to try to extract organized crime from a community once it embeds itself there. I'm very concerned.
Because we're first nations businessmen, in the first eight years we had the licence and were paying all the applicable federal taxes, as soon as we were able to recognize some benefits from this we reinvested our money in the first nations communities. You saw lacrosse arenas go up, the Ohsweken Speedway, gas stations, tech companies, and a lot of other spinoff and satellite companies that were owned by the directors or people who were working within the companies that were legally compliant.
I've watched that slowly diminish. I believe it's diminishing because a lot of the time these activities involve people who don't have first nations' agendas at heart. The money is leaving the country and going to other countries that participate in activities. I'm sure you have very good policing agencies; they can help you identify them.
It's very difficult to even speak in front of a committee when in the back of your mind you're thinking, “Don't sell out your own people. Make sure you give your people the opportunity to go after some of that revenue stream too. It's all that your people have as a revenue stream.” By the same token, as a first nations businessman, am I not entitled to a level playing field? Am I not entitled to play under the same rules as everybody else?
You talk about provincial jurisdiction. I can speak only for myself; I don't have the privilege of speaking for every other tobacco manufacturer on the reservation. But I can tell you our company is the largest compliant tobacco manufacturer on a first nations territory, and we don't want to see our native-made products in retail stores off the reservation.
We've never been granted provincial permission to go into Ontario and sell tobacco products, which is an issue that will be before the courts one day. I don't want people taking products that are destined for first nations people and selling them in convenience stores. But do you know what? If you toughen up your laws, that won't happen.
I know in the United States of America, if you sell unstamped cigarettes for a second or third time, the punitive damages are unbelievable. They usually result in long-term incarceration. So you can't have a mellow environment and say, “Well, we're looking out for the rights of first nations people.”
First nations retailers who are truly committed to building their own communities only have their products for sale on first nations territories. They don't choose to have their products sold into the mainstream.
I've already touched a little bit on what it's like for the younger people growing up. Aren't they entitled to be working in a manufacturing facility? As long as tobacco is legal and recognized, I think they're entitled to be there. Do you want them working in a facility where there are firearms at their feet because they have to fear the raids and they have to fear the aggression? Because they're desperate for those jobs, they allow themselves to work in those environments. Is that what you want for the youth?
One thing first nations people do is believe in family. If you watch, we're the fastest growing population in Canada today. You have to provide opportunities for our people as well. If you can help me with restricting the raw materials that go into these tobacco products and move toward legal recognition, you will truly make Canada a safer place.
Thank you very much for your time.