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Editorial

September 6, 2002 - Shareholders’ rights in Nunavut
September 13, 2002 - Nunavut needs an EDA
September 20, 2002 - Correcting the corrections system
September 27, 2002 - GN should treat inquest recommendations with caution

September 6, 2002

Shareholders’ rights in Nunavut

For months the southern media has been reporting on the spectacular bankruptcies of giant U.S. corporations such as Enron, Worldcom and others.

Although the specific circumstances differ in each case, there’s a common thread running through all of these stories — that these companies were run by executives who deceived and manipulated their shareholders.

Publicly held companies whose shares trade on stock markets are required by law, in both Canada and the U.S. to provide complete and accurate financial information to their shareholders, and any other information that could affect the financial well-being of the companies. In the U.S., that includes information about how much is paid to senior company executives. But despite those strict laws and regulations, it appears that many large corporations have been running roughshod over the rights of their shareholders

In theory, all Inuit beneficiaries are the owners of Nunasi Corporation, the birthright corporation for all of Nunavut. Similarly, the beneficiaries of each region are the theoretical shareholders of each regional birthright corporation.

Given all that, now is as good a time as any to ask this question: what kinds of rights — if any — are available to the theoretical shareholders of Nunavut’s Inuit birthright corporations and their various subsidiaries?

Legally, there are none. Ironically, any Inuk able to buy shares in publicly traded northern companies such as Northern Property Real Estate Investment Trust (formerly Urbco), or the North West Company (owner of Northern stores), enjoys far more rights than as a shareholder of an Inuit birthright corporation.

For example, the shareholders of companies like the former Urbco have the legal right to see quarterly financial statements, annual consolidated revenue statements, annual reports, and any other information that could affect the company’s financial prospects.

In fact, any member of the public with access to the Internet can easily find financial information about such companies.

Want to know how much money Breakwater Resources, the owner of Nansivik mine, lost last year? Just go to the company’s Web page and read its 2001 financial statement.

Want to know how Nunasi Corporation did in 2001? Well, if you go to that company’s Web page, you will find consolidated financial statements for 1999 and 2000, but none for 2001.

If you go to Qikiqtaaluk Corporation’s home page, you won’t find any financial statements at all. Instead, on a page called "Fiscal Performance," you’ll find a few snippets of information that say nothing about whether the company actually made or lost money.

They provide revenue figures for 1998, 1999 and 2000, with more figures about how much money they gave out in compassionate travel donations, and how much their payrolls were worth in those years.

But the most important piece of information — the bottom line — is missing. There’s no information about whether the company made or lost money.

To be fair, there is no legal requirement for Inuit-owned birthright corporations to disclose any information to anyone, even to Inuit beneficiaries. Legally, they are private corporations, with all the rights and privileges enjoyed by any person.

Unfortunately, there are few obligations to accompany these rights.

So it’s to their credit that they sometimes make an attempt to share at least some information with beneficiaries, even if it’s rarely enough to provide a semblance of accountability.

The Qikiqtani Inuit Association also deserves praise for passing new board governance policies at its board meeting in Grise Fiord this spring. From now on, no staff member, including the president of Qikiqtaaluk Corporation, will be allowed to sit on any board, and no one may hold two positions at the same time.

QIA also reaffirmed the idea that QC is a "controlled" organization, and that QIA is ultimately responsible to the beneficiaries for QC’s performance.

Despite this, most beneficiary-owned corporations are as transparent as a piece of glass painted with black enamel.

This is a major issue. In 2000, Nunasi Corporation’s assets were worth $141.6 million. Sales and other revenue in 2000 came to $180.8 million.

That’s a fair bit of wealth, and it’s likely to grow. But how much of it is likely to be redistributed to beneficiaries? And even if they’re kept up to date on the company’s performance, what is the meaning of their ownership anyway?

JB

TOP

September 13, 2002

Nunavut needs an EDA

Organizations as diverse as the Nunavut Association of Municipalities and Nunavut Tunngavik Inc. are calling on the federal government to negotiate an economic development agreement, or "EDA."

For people involved in business or economic development in the 1980s and early 1990s, the Canada-Northwest Territories economic development agreement was a familiar institution whose existence was taken for granted.

Under those agreements, various funds were created to provide grants and loans to new or existing businesses. Ottawa paid 70 per cent of the cost, while the territorial government paid 30 per cent.

Every year, the EDA injected tens of millions of dollars into businesses in what was then called the Northwest Territories. There are probably many businesses in existence today that may never have started up without help from an EDA fund. Because access to the chartered banks was impossible for most people living in small northern communities, the EDA’s business loan funds became a substitute for banks and a vital source of investment capital.

Such agreements were, and are, not unique to northern Canada. The Atlantic Canada Opportunities Agency still serves Canada’s four Atlantic provinces, while the Western Economic Diversification Canada fund provides a wide range of handouts to small and medium-sized businesses in Manitoba, Saskatchewan, Alberta and British Columbia.

The federal government’s generosity, it seems, extends only to those parts of the country with lots of voters — preferably Liberal voters.

So the Nunavut Association of Municipalities and other organizations are justified in demanding that the federal government negotiate an EDA for Nunavut. If residents of oil-rich Alberta can gain access to federal business development money, why can’t residents in the most economically underdeveloped region of Canada?

Since the creation of Nunavut, Ottawa has been responding to these demands with variations on a tired old theme: that the money the Nunavut government gets under the formula financing agreement is enough.

Even they must realize, however, that the current formula financing agreement is calculated from a set of base figures developed after the federal government imposed severe cutbacks on its transfers to the northern territories in 1995.

This argument also doesn’t explain why residents of a have province like Alberta may benefit from a program that is denied to residents of the poorest regions of Canada.

Having said that, it’s important to remember that an EDA, necessary though it may be, is obviously not the answer to all of Nunavut’s economic challenges.

For example, the lack of access to start-up capital in small communities could also be addressed by the development of a credit union system, an idea that Arctic Co-operatives Ltd. aggressively promoted in the early 1990s.

And like any other government handout program, not all EDA money was spent wisely. Every year, the government of the Northwest Territories was required to write off hundreds of thousands of dollars in bad loans made to failed businesses. The lesson there is that government loan and grant programs cannot transform unviable businesses into viable ones.

Given Nunavut’s high transportation, energy and labour costs, it’s important to remember that government handouts, helpful though they may be, cannot create business opportunities where none existed before.

But that is no reason not to create a new EDA agreement for Nunavut. As long as we remember that it’s only one piece in a very large puzzle, an EDA could bring great benefits to Nunavut’s economy.

JB

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September 20, 2002

Correcting the corrections system

There are many in Nunavik who will welcome the recent announcement that the province of Quebec will build a 40-bed correctional centre somewhere in Nunavik, a measure that will help meet a long-ignored provision of the James Bay land claims agreement. (Nunatsiaq News, Sept. 13, 2002)

There's no doubt that Nunavik needs this new building. A report issued last January by Nunavik's joint working group on sentence management found that in the year 2000, 938 criminal files were opened in that region. Nearly half of those - 418 - originated in Kuujjuaq, whose crime rate appears to have tripled since 1989.

Each one of those "files" represents one person charged with one or more criminal offences. So even if you assume that at least some of those people will be found not guilty, or have their charges stayed, it's fair to conclude that rapidly escalating numbers of people in the Nunavik region will continue to be convicted of criminal offences.

Of those, at least some, especially those convicted of serious crimes of violence, will need to serve prison sentences. And, of course, growing numbers of people who must be held in custody until the courts deal with their cases will also need a place to serve their remand time.

So even if Nunavik's new jail turns out to be big enough to meet the region's current needs, it's likely that it will soon become obsolete. Nunavik's burgeoning crime rate likely means that within a decade, its correctional centre will be too small, and that many offenders sentenced to non-federal time will continue to do their time in prisons far from home.

So it looks as if Nunavik is about to embark upon the same error-ridden course that territorial officials embarked upon in 1984, when they built the Baffin Correctional Centre in Iqaluit.

Originally designed to hold 42 male and female offenders, BCC has been grossly inadequate for years. By 1990, after a series of embarrassing sex scandals, territorial officials abandoned the idea of housing men and women within the walls of the same correctional institution, and BCC became a male-only correctional centre. Since then, no new correctional centres have been built in Nunavut - including a badly needed correctional centre for women. Even now, women requiring detention must be sent to a facility in Fort Smith.

Between 1992 and 1998, when most of the planning work for Nunavut was done by the Nunavut Implementation Commission and the Office of the Interim Commissioner, no one looked seriously at the idea of building more prisons in Nunavut. Because of this omission, Nunavut now lacks an essential piece of social infrastructure - and Nunavut's many inmates, their families, and the public are now paying the price.

The lack of correctional centre space in Nunavut is causing many unnecessary hardships for inmates, especially women, and is even threatening to bring the administration of justice into disrepute. Last May, Bill Riddell, an Iqaluit justice of the peace, released a 24-year-old woman charged with assault and theft, even though the Crown presented evidence that justified detaining her until trial.

"The thing that has come up with her, as with almost every other female that comes before me for a bail hearing, is that I'm stuck because Nunavut does not have a proper remand facility for women," Riddell said in court.

Nunavut also needs a remand centre for men ordered by the courts to stay in custody until the courts have dealt with their charges, because the large numbers of remand prisoners in BCC has contributed greatly to overcrowding there. Because remand prisoners have yet to be convicted of the charges against them and are presumed to be not guilty, they don't have access to programs available to convicted inmates serving actual sentences.

This is a serious issue, because remand prisoners tend to be those accused of the most serious crimes of violence, such as homicide and aggravated sexual assault, and often need more help than other types of offenders. But it's these remand prisoners who spend many frustrating months in jail with little to do during their time inside.

As for convicted territorial offenders, large numbers are still being sent to the Northwest Territories to serve their time at the Yellowknife and Hay River correctional centres. All federal offenders - generally those who receive sentences greater than two years - must serve their time in southern penitentiaries, most of them at the Fenbrooke institution in central Ontario.

It's true that Nunavut's system of correctional camps, coupled with the introduction of community-based approaches to corrections, have taken some of the pressure off of BCC.

But Nunavut's crime rate is so high, especially the rate of violent crime, that even if Nunavut uses as little incarceration as possible, it will still end up with a lot of people in jail. If the status quo is maintained, large numbers of Nunavummiut will be forced to spend their time thousands of mile away from their families and communities.

Even though this issue has been thoroughly studied and publicized, Nunavut's political leaders seem hardly aware of it, perhaps because they're afraid of it. An election candidate who says "I promise to build more prisons" in their platform is unlikely to win many votes in northern Canada.

But adequately funded correctional centres, staffed by properly trained people offering programs aimed at helping inmates deal with the issues that caused them to commit their offences, are essential public services that Nunavut residents deserve as much as other Canadians.

Given Nunavut's high rates of violent crime, this need is as great as our need for better health facilities and better schools. Our prison inmates may have done terrible things to earn their sentences, and they must be held accountable for their actions. We should not forget, however, that they are still human beings who need compassionate help.
But all the signs indicate that in the future, Nunavut leaders will continue to ignore their needs as efficiently as they've ignored them in the past.

JB

TOP

September 27, 2002

GN should treat inquest recommendations with caution

There is only person who can be held morally responsible for the suicide of Hal Richards — and that person is Hal Richards.

Regardless of what is known or not known about why the former principal of Iqaluit’s Nakasuk School decided to fire a .308 rifle bullet through his head on June 8 or June 9 last year, that much is obvious.

And yet, during the inquest held in Iqaluit last week to probe the circumstances surrounding his death, there were many times when it appeared as if everyone but Richards was being held culpable.

Indeed, the entire process appeared to rest upon the assumption that Richards was the powerless victim of a school child who complained to police that Richards had abused her, and malignant bureaucrats who weren’t there for him in the time of his greatest need.

At least, that’s the narrative that many people constructed out of the rat’s nest of rumours that his shocking death inspired.

There are two major problems with that interpretation, however.

One, it’s not supported by the facts, including those facts that emerged as evidence during the inquest.

Two, it assumes that Richards, a middle-aged man of 52 who held an administrative position of great responsibility, was incapable of thinking and acting for himself.

Last week’s inquest may have been an honest, well-intentioned attempt to seek the truth. But in the end, a mature, affluent, educated man ended up being portrayed as an infant. And if the government accepts all of the inquest’s recommendations, legitimate complaints of abuse, especially sexual abuse, may become more difficult for young students and their parents to make.

On the first point, the facts show that after May 28, 2001, when Richards was suspended with pay from his job, he was not as isolated as his supporters would have you believe.

The evidence shows that he had access to a lawyer, even though police had yet to charge him with a criminal offence. The evidence shows that representatives of the Nunavut Federation of Teachers were in regular contact with him. The evidence shows that his wife was in contact with him, via telephone from Yellowknife. The evidence shows that officials with Qikiqtani School Operations, confused though they may have been, were motivated by a desire to protect Richards’ integrity. There is no evidence that any education department employee intended to do him harm.

There isn’t even any evidence that Richards was noticeably distraught about the abuse allegations that a mother and her child had brought to the education department, and then to the police. The evidence shows that Richards had access to more support than many others in the same circumstance could reasonably expect to receive.

As for the second point, the inquest failed to demonstrate any cause-and-effect relationship between Richards’ suicide and the way he was treated by education department officials. It may be true, as the government of Nunavut’s lawyer suggested, that the abuse allegations made him so anxious that he decided to kill himself. But that’s just speculation. We don’t know what emotions Hal Richards felt in his final hours, and we never will.

But in order to conclude that department officials contributed to Hal Richards’ suicide, you have to accept the absurd premise that Hal Richards was not a mature adult capable of independent thought and action.

As a 52-year-old teacher with decades of experience in the profession, Richards ought to have known what to expect in the case of an abuse allegation. Abuse, especially sexual abuse, is not a new issue for those who work within elementary schools. Richards was not an inexperienced rookie. He ought to have known that any investigation and possible criminal trial would take many, many months to complete. He ought to have known that his supervisors, even if they were willing to talk to him, would not be able to state how long his suspension would last.

As for his supervisors at Qikiqtani School Operations, it’s not true, as they claimed in their testimony, that the RCMP ordered them not to talk to Richards. In a free society, neither the RCMP nor anyone else has the authority to order anyone to do that.

In his evidence, RCMP Constable Cory Bushell said that it’s a standard police practice when investigating criminal allegations in a workplace to ask that police get a chance to do their investigation first. He said the employer is free to investigate the allegations after that and to discuss them with the affected employee. Bushell said education department officials and employees were free to talk to Richards any time they wanted, as long as they didn’t talk about the allegations against him before the RCMP had finished talking to him.

For some reason, Steve Prest and Charles Banfield, the two supervisors who handled the situation, weren’t able to understand that, and for whatever reason, Richards’ co-workers came to believe that they were forbidden to talk to him. It’s significant though, that none appeared brave enough to do what they believed was the right thing and go over to visit him. The herd mentality can be a powerful force, it seems.

But even if his employer acted in a confused, incompetent and possibly dishonest manner, there’s still no evidence that they caused his death. Hal Richards caused his own death.

The government of Nunavut, therefore, should proceed with caution when considering the 16 recommendations made by the coroner’s jury. Most of those recommendations, by the way, were suggested to them by various lawyers and by coroner Percy Kinney.

Some of those recommendations may be useful, while others may be unnecessary. There is no evidence, however, that implementing any of them would prevent another teacher faced with a similar personal crisis from committing suicide.

Though the inquest may have served the comparatively narrow interests of the teaching profession by exposing their employer’s blundering inexperience, it did little to serve the wider public interest.

The question that the public wants an answer to is whether a child was abused while in the care of the school system. When Hal Richards took his own life, bringing an untimely close to the criminal investigation, he made sure that this question will never be answered.

JB

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