Winnipeg Free Press - PRINT EDITION
Is jet a trophy or just bad PR?
TCIG defends business record
By: Martin Cash
18/03/2010 1:00 AM |
Comments: 0
TRIBAL Councils Investment Group made the news recently when the
Free Press reported it had bought Canwest's corporate jet.
The purchase raised eyebrows in many quarters about why a modest investment fund representing one of the most impoverished communities in the country needed to buy a corporate jet.
Another way of looking at it might be that a trophy of success owned by a once and former champion corporation -- Canwest -- has now been passed into the hands of a First Nations-owned company that has aspirations to become a billion-dollar corporation like the now-bankrupt Canwest used to be.
But TCIG's reality is not all about the corporate jet. (TCIG's management and board were warned about the negative optics surrounding the jet, irrespective of the fact they intend to lease out the plane and make it into a profit centre.)
In addition, Allan McLeod, TCIG's longtime chief executive officer, is well aware of the allegations of secrecy and a lack of transparency.
Because of that, he took the unusual step of "opening the books", as it were, to the
Free Press.
As if to underline the fact that TCIG has ISO certified corporate governance practices, auditors from Meyers Norris Penny were hard at work at the TCIG offices on the 21st floor of 360 Main St. preparing its 2009 report the day I was there.
McLeod said he believes concerns about TCIG's relative transparency emanated at least partially from the Assembly of Manitoba Chiefs, who, in a resolution in 2007, suggested that TCIG was "managed in a manner that precluded transparent accountability to its members".
McLeod took umbrage at that accusation then, and any time it has been repeated since.
"I have no problem with working with AMC (which has come full circle and now endorses TCIG)," McLeod said. "But the suggestion that our structure precludes transparency is a fallacy. It is incorrect, wrong and misleading."
TCIG started in 1990 with a $175,000 stake from the province's seven tribal councils.
In January, each of them passed resolutions -- signed by all but two of the chiefs from the 55 Manitoba First Nations represented by the tribal councils -- "unequivocally" endorsing TCIG and its management and giving it an additional 15-year mandate.
Its initial purchase of Arctic Beverages, the Flin Flon-based Pepsi bottler and northern distributor, may still be its most profitable.
According to its 2008 consolidated financial statements, its holdings generated $68.3 million in revenue and $3.5 million in profit (more than double 2007's return).
Its 2007 revenues makes it just a little smaller than Winnipeg Airports Authority and larger than Crosstown Civic Credit Union.
"We are on a trajectory this year for an improvement over last year and with no new debt we will hit close to $100 million," he said. "And over the next year or two, based on our business plan, we will continue to grow this thing."
Last year it sold its stake in True North Sports & Entertainment and the year before it sold its 50 per cent interest in the Radisson Hotel, doubling its investment in both cases.
Last fall it bought out its partner in Precambrian Wholesale and now owns it outright along with Arctic Beverages and First Canadian Health, a Toronto-based fulfillment service for First Nations health claims (the latter two generate at least $10 million a year in revenue).
Recently it also became master franchisee for the Wok Box Fresh Asian Kitchen restaurants.
Its 15-person head office is more than 90 per cent aboriginal, including its chief financial officer, Robert Magnusson, one of about a dozen aboriginal chartered accountants in the country.
McLeod bristles at the suggestion TCIG does not do enough on the community level. It pays out $100,000 a year to each of the seven tribal councils in the form of a fee for services rendered.
In association with a couple of other foundations, TCIG funds a breakfast program at Pukatawagan for 600 school kids and will start another next year for 1,000 children at Shamattawa.
One senior First Nation business person who was formerly associated with TCIG said, almost disparagingly about its management, "Those guys are all about the bottom line."
McLeod is unapologetic about that. As far as he is concerned, whatever assets and income TCIG generates is that much more wealth First Nations people in Manitoba control that, were it not for TCIG, would be back in the hands of mainstream Canada.
martin.cash@freepress.mb.ca
Portfolio of firms
Here is TCIG's portfolio of companies (including wholly owned operations and companies in which it holds an equity position):
-- Arctic Beverages
-- First Canadian Health
-- First Canadian Fuels
-- First Canadian Water & Infrastructure
-- Precambrian Wholesale
-- Exchange Industrial Income Fund -- Artis REIT
-- Tribal Marketing Communications
-- Paragon Pharmacies
-- Big Freight Systems
-- All In West! Capital Corp.
-- First Nations Bank of Canada
-- Larters at St. Andrews Golf and Country Club
-- The Meadows at East St Paul
-- TCIG-Hugh Munro Construction Ltd.
-- Wok Box
Republished from the Winnipeg Free Press print edition March 18, 2010 B5