Northern stores charge 1.5% cheque fee
Updated at 9:55 PM
By Alexandra Paul
Northern stores are acting as a bank of last resort for in remote communities looking for ways to cash $250 million in cheques.
But there's a price to pay for the service on reserves where there are no banks: Northern is taking a 1.5 per cent cut of each cheque.
About 60 per cent of Manitoba's 5,000 eligible residential school survivors will receive cheques. The remainder will have the money deposited directly into southern bank accounts by the end of January.
Northern stores are processing the cheques for a fee of 1.5 per cent, offering $2,500 cash and the option of credit cards, debit cards or store credits.
"We're the only game in town," said Michael McMullen, executive vice-president with the North West Company, which runs 145 Northern stores in Canada, Greenland and Alaska. "We're trying to do the right thing. And maybe there are other choices people would like, but that's all we can do. We're not a bank."
Some northerners claim Northern's solution is cheating poor elderly people.
"I'm very concerned about this whole situation," said Gabby Munroe, who is a residential school settlement co-ordinator at Garden Hill, one of four fly-in communities in the Island Lake First Nations about 1,000 kilometres northeast of Winnipeg. He's outraged by the 1.5 per cent fee, which works out to several hundred dollars per survivor.
"This affects all the First Nations that have Northern stores. They're raking it in," Munroe said.
Assembly of Manitoba Chiefs Grand Chief Ron Evans noted that just two northern communities, Norway House and Cross Lake, have banks, yet all First Nations deal with them, even if it's long distance.
"I'm going to try and put something together, with the other leaders and the banks, so it'll be easier for survivors," Evans said. His first meeting was with the Royal Bank Tuesday.
In Garden Hill's sister community of St. Theresa Point, band officials talked a credit union into opening up a branch just for the cheques, worth an estimated $3.5 million there.
"We got a credit union in our community to give our people an option, so Northern won't get the 1.5 per cent. Median (Credit Union) set up two weeks ago," St. Theresa's settlement co-ordinator Marcel Mason said.
Fred Harper in Red Sucker Lake, another Island Lake First Nation, said he took his cheque to Northern and expected a bank draft back. Instead, he received $2,500 and the option of a pre-paid MasterCard, a Northern Cashlink card that acts like a debit card or a gift card redeemable only at Northern.
"That's what happens to you if you cash it at Northern. They want to keep the money," Harper said bitterly.Without banks, money usually gets stashed, but this time there's just too much cash for trappers to tuck into baggies or mothers to hide in bras.
A national working group of federal officials, First Nation leaders and commercial executives spent months anticipating problems with the residential school payouts, and trying to solve them.
In the end, the group couldn't settle the problem of no banks. They left it to each community to work out. That's when Northern stepped in.
Store managers worked out the details with chiefs and councils and sought advice from RCMP on what to do. Store managers say they are bending over backwards to be as helpful to customers as possible.
"We expected more (help). But it didn't occur," McMullen said. "The banking institutions didn't move any resources up here to handle this."
alexandra.paul@freepress.mb.ca
