On July 4, 2023, Tahltan Heritage Trust Trustees Bill Adsit and Garry Merkel provided an update on Trust business to Tahltans at the 2023 Tahltan Annual General Assembly in Dease Lake.
TRUST OVERVIEW
Bill opened the presentation, providing an overview of the Trust, background on its creation, and the rationale. He noted the Trust was established as a separate legal entity to ensure there is no political interference and that part 6 of the Agreement states that no beneficiary shall have any right to call for a distribution or division of any Trust property, because it belongs to Tahltan members. Among its parameters, the spending power of the investment capital must be preserved, and distributions are to be used for education, training, capacity development, housing, health, education and economic development.
2022 FINANCIALS
Bill reviewed the 2022 financial statements, including the Income Statement and Balance Sheet, and detailed the sources of capital and income. He highlighted the growth in value of the portfolio since 2016, which now sits at more than $55.6 million, noting the accumulating value of the funds and interest generated has contributed to its growth.
INVESTMENT STRATEGY
In explaining the investment strategy, Bill explained its evolution since inception. During the first 10+ years, the goal was to increase and preserve (not lose) the principal amount of the investment; going forward the goal is to preserve and outperform inflation while striking a balance between growth and safety of the principal.
DISTRIBUTION BENEFITS
Garry discussed the distribution of benefits. He explained the formula for calculating the Funds Available for Distribution and the 2023 calculation, which totals $348,322. Acknowledging the variability of the current funding model limits the ability of the delivery providers to plan ahead, the Trustees developed projections they can confidently meet and will be fixing distributions at $700,000 annually for the next three years (2024, 2025 and 2026). Since 2018, distributions totalling $2,610,000 have been to the TCG education fund. Education will continue as the default for the next three years but may include additional priorities once the Tahltan Governments conduct outreach.
PRIORITIES & DELIVERY
When it comes to distribution priorities and delivery, Garry reviewed the structure of the current Trust, including the responsibilities of the Trustees and Shareholders, noting neither decides on delivery (how to spend the money). To date, delivery has been through a resolution at an AGA, but a delivery model is needed moving forward.
GOVERNMENT LED MODEL
In Community Engagement Sessions held by the Trust in past years, there was support for a Tahltan Government lead and managed process that engages the Tahltan community to identify 3-5 year priorities. Delivery agents would establish plans and budgets, approved by the Tahltan Governments, likely a committee. The Tahltan Governments would be responsible for ensuring reporting and accountability measures on delivery of the priorities, in turn reporting to the membership and the Trust. The Community Foundation is one option that has been discussed, but it hasn’t moved forward; reference to the Community Foundation has now been removed in the new Trust Agreement.
NEW TRUST OVERVIEW
Bill elaborated on the new Trust Agreement. He provided background and rationale for its creation and highlighted the most significant recommended changes, including:
- Revised purpose that better defines the objectives and goal to ensure the Tahltan Heritage Trust will continue to benefit Tahltan members into the future.
- New Trustees must be recommended by the Current Trustees and approved by all three Tahltan governments.
- Trustees manage the funds and a new entity manages giving.
- The Tahltan Legacy Corporation be dissolved for tax purposes, replacing the Corporate trustee with 3-5 individual Trustees.
- Trustees maintain distribution discretion based on approved formula.
- Unanimous approval by three Shareholders, not just one (currently TCG), on major changes that impact all members.
TRUST BEST PRACTICES
Notably, Bill shared that at a recent NATOA (National Aboriginal Trust Officers Association) conference, a common purpose of other First Nations was to ensure the funds are preserved for seven generations and decisions must be made today with their consideration. As well, all other Trusts are managed by external fund managers, who charge between 5% and 9%; the Tahltan Heritage Trust is the only one that manages internally, saving significant money.
TRUST CHALLENGES
Looking ahead, Bill addressed several issues currently facing the Trust:
- New Trustees are needed; multiple requests have been sent to the Shareholders.
- Agreement is needed by all three Tahltan Governments on community outreach to set a process.
- $5.8 million of Trust Funds committed to Impact Benefit Agreements has been redirected by the TCG into a savings account.
- Approval of the new Trust Agreement needs to be made by all three Shareholders.
- As per the current Trust Agreement, audited financial statements will be provided for 2023 and beyond.
MEMBER RESOURCES
Bill reminded members the Tahltan Heritage Trust website is a resource for news and information, and invited members to join the Trust’s email list to stay informed of news and developments.
MEMBER DISCUSSION
A question and answer session followed the presentation. The discussion focussed on distributions being focussed solely on education, redirection of the IBA funds, and status of the new Trust Agreement.
For a detailed recap of the presentation and question and answer session, review the presentation and read the minutes.