Invest in Indigenous entrepreneurs
Finance Minister Chrystia Freeland declared in last year’s federal budget that “advancing Indigenous self-determination is critical to Canada’s future.”
“Indigenous Peoples, businesses, and communities must have the opportunity to fully participate in the economy and build opportunities for themselves and future generations in the ways they see fit,” she said in budget 2023.
She added: “To move forward and build prosperity, systemic barriers must be removed and supports put in place for Indigenous communities to fully participate in the economy in line with their constitutionally protected rights.”
We at the National Aboriginal Capital Corporations Association (NACCA) hope Freeland’s next budget will ensure that Canada’s Indigenous Peoples can meaningfully contribute to the country’s economic growth and prosperity.
NACCA is a nationwide network of 58 Indigenous Financial Institutions (IFIs). The network has issued 53,000 loans totalling $3.3 billion to small and medium-sized businesses owned by First Nations, Métis, and Inuit Peoples.
It has been doing precisely what Freeland prescribed: building prosperity, removing systemic barriers, and helping Indigenous People fully participate in the economy.
The success stories are inspiring: the first Indigenous-owned and operated compounding pharmacy, a Métis mukluk business that exports worldwide from Winnipeg, a First Nations community-owned oyster farm on Vancouver Island, and co-ops offering both life necessities and dividends to communities across the Arctic. Many of these IFI-supported businesses are helping to preserve and promote Indigenous culture.
Through NACCA’s Indigenous Women’s Entrepreneurship program, Britt Nygaard opened Renew Fitness, a women’s health and fitness coaching company in Melfort, Sask. Loreena Seymour opened a barber shop in Kamloops, B.C.
The IFI network has helped numerous Indigenous youths start their businesses, like Dawn Forrest, an Inuk entrepreneur who began her infant and toddler apparel line. NACCA is working with the federal government to create a dedicated Indigenous youth entrepreneur program.
Conventional lenders would have deemed most, if not all, of the IFIs’ loans too risky, the proposed business locations too remote or lacking in community infrastructure, and the applicants lacking in credit history or collateral. Yet, when Indigenous Financial Institutions were created in the mid-1980s to replace the federally run Indian Equity Development Fund, within a few years, they reduced the loan loss rate from 80 per cent to less than five per cent.
Without additional stable funding, the network will be forced to cut back existing programs, like the women’s initiative. It won’t be able to start new programs for youth entrepreneurs, even though Indigenous youth are the fastest-growing demographic group in Canada.
Without the support programs, NACCA’s Indigenous Growth Fund cannot effectively leverage the $153 million in private sector capital we’ve raised and will struggle to deploy more loans to Indigenous businesses.
We realize federal coffers are not limitless, and Freeland is facing myriad competing demands for funding even as she’s under pressure to reduce spending and the economy is struggling. But in tough times, it is essential that the government put its resources where they will have the most significant impact.
On that score, NACCA is an excellent investment. The impact of the network goes far beyond the 50,000 loans from the IFI network. Last year’s analysis by the Conference Board of Canada confirmed that every $1 million in loans generates $3.6 million in GDP. And every dollar loaned generates more than twice its value in labour income.
Since 2015, we have provided almost 12,000 loans worth $1.1 billion, contributing $4 billion to Canada’s economic growth and creating more than 55,000 jobs. We’ve opened education and skills development opportunities and helped lessen social isolation and marginalization.
As Freeland said in last year’s budget, it’s imperative that Indigenous People “have the opportunity to fully participate in the economy and build opportunities for themselves.”
Today, we seek support from Prime Minister Justin Trudeau and Freeland to follow through in this year’s budget with funding for NACCA that will help make that sentiment a reality.