Question Period Note: Support for Indigenous Businesses

• We recognize that Indigenous businesses face unique challenges and may be disproportionately affected by this pandemic.

• On June 11th, we announced $117 million to help Indigenous communities support their local businesses and economies, and a $16 million stimulus development fund to support the Indigenous tourism industry.

• This funding builds on the $306.8 million we announced in April, mirroring the Canadian Emergency Business Account, to help Indigenous businesses and ensure business owners have access to the support they need to get through this crisis.

The Indigenous Community Business Fund is an emergency measure to meet the needs of Indigenous community businesses located in the provinces which are unable to access other federal business supports in response to the economic impacts of the pandemic, due to their structures and inability to take on debt. It does not duplicate other federal business support measures.

The fund is needs-based and modelled on other federal business support measures, such as the Regional Relief and Recovery Fund and the Canada Emergency Wage Subsidy. Those measures were introduced in the spring of 2020 and some are close to exhausting their funding. The volume of unmet needs by Indigenous community businesses is still being assessed, particularly for collectively-owned businesses by the Métis.

Some of the funding is being transferred directly to communities and collectives to address their COVID-19 economic priorities including supporting micro-businesses that could not access other federal programs. The balance of the funding is proposal-based for community or collectively-owned businesses.

As of March 2021, a total of 560 First Nation and Inuit communities in the provinces have received funding transfers to address the economic impacts of the pandemic and 164 proposals by community-owned businesses have been funded. For the Métis portion of the fund, five funding agreements have been signed with organizations selected by the Governing Members of the Métis National Council. Funding, which began to flow in November, will continue to be provided to Métis collectives and communities and to collectively-owned businesses.
As of March 31, 2021, 999 Métis community businesses received a total of $17.975 million in tal of $7.2 million in funding.

Funding for an additional 678 proposals to support Indigenous tourism is being provided through the Indigenous Tourism Association of Canada.

The COVID Indigenous Small and medium-sized Initiative (COVID ISI)

• The cross-Canada network of Aboriginal Financial Institutions (AFIs) was established to provide financial and business services to First Nations, Métis and Inuit entrepreneurs and communities across Canada who typically cannot secure financing from commercial lenders. AFIs and MCCs are represented at the national level by the National Aboriginal Capital Corporations Association (NACCA) that administers the federal Aboriginal Entrepreneurship Program.
• Approximately 50% of businesses supported by AFIs are located in rural or remote communities, and 45% are located on-reserves. The majority (85%) of these businesses have fewer than ten employees. According to a 2013 study, over 51% of Indigenous small and medium enterprises Indigenous are owned in whole or in part by women and almost 30% are majority owned by women. NACCA reports that those levels remain unchanged to date.
• The general measures designed to mitigate the impact of the COVID-19 crisis on mainstream small and medium sized enterprises in Canada will be useful for only a small number of Indigenous businesses because they fail to meet the unique needs of the majority of Indigenous businesses, the majority of which have neither a relationship with the Canada Revenue Agency nor a strong and long credit history, which is essential for accessing the credit measures offered by BDC.
• The COVID-19 Indigenous Small and Medium-sized Enterprises Initiative (COVID-ISI), announced in April 2020, is providing $306.8 million to support Indigenous businesses and the network of Indigenous lenders that have been impacted by the pandemic.
• The COVID-19 Indigenous Small and Medium Enterprises Initiative was designed to mirror the terms of the Canada Emergency Business Account, with the original maximum amount of each loan set at $40,000, with a $10,000 non-repayable portion, and was extended in December 2020 to provide an additional $20,000 per business, also mirroring the increase to the Canada Emergency Business Account.
• Managed by ISC’s Lands and Economic Development sector, the COVID-ISI and the Aboriginal Entrepreneurship Program are administered by Indigenous partners the National Aboriginal Capital Corporations Association (NACCA) and the Métis Capital Corporations and are delivered by a cross-Canada network of Aboriginal Financial Institutions (AFI) and Métis Capital Corporations (MCC).
• As of April 13, 2021, and according to the data collected from the COVID-ISI initiative, $227M of the funding had been distributed, including $31.7M to businesses majority-owned by Indigenous women, representing 31% of all loans made under this initiative.
• In 2019-2020, NACCA launched the Indigenous Women’s Entrepreneurship Initiative, affiliated with ISED’s Women Entrepreneurship Strategy, which is providing outreach and services specifically tailored to Indigenous women in an effort to increase the participation of Indigenous women entrepreneurs.
• ISC continues to engage with NACCA on this initiative and is engaging with Pauktuutit and other national Indigenous women’s organizations on the issues of poverty and economic development.

If pressed whether the funding is flowing

• We recognize that Indigenous businesses face unique challenges in addressing COVID-19.

• Funding for eligible Indigenous Small- and Medium-sized Enterprises started to flow on June 1st through the National Aboriginal Capital Corporations Association, the network of Aboriginal Financial Institutions, and Métis Capital Corporations. We are seeking to extend these supports into the new fiscal year.

• Community funding for 560 eligible First Nation and Inuit communities started to flow in August, while funding to eligible Métis communities and collectives started to flow in November.

If pressed on the Wage Subsidy

• We have confirmed that First Nation sole proprietors and incorporated businesses are able to access a wide range of supports.

• However, we recognize that community-owned unincorporated businesses and microbusinesses with very low revenue, are not able to access many of the announced measures such as the wage subsidy.

• The $117 million announced on June 11, addresses this gap. The Indigenous Community Business Fund supports Indigenous community-owned businesses which are not eligible for existing business support measures.