Indigenous and Northern Affairs Committee on Nov. 17th, 2020

[Pam Damoff, Liberal, Oakville North—Burlington, ON]

If we're looking at programs for small business, those aren't actually the departments you want to be talking to.

I think I'm out of time, Chair.

[The Chair, Liberal, Bob Bratina]

Yes. I know that you keep track too.

[Pam Damoff, Liberal, Oakville North—Burlington, ON]

I do.

[The Chair, Liberal, Bob Bratina]

Thank you for that.

Next, we have Madam Bérubé for six minutes.

Please, go ahead.

[Sylvie Bérubé, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Thank you, Mr. Chair.

Earlier, you talked about the recovery strategy, but it is clear that, over the course of the first and second waves of the pandemic, you have experienced problematic situations. Bankruptcies have perhaps been avoided.

Do you think federal government measures have helped avoid those bankruptcies?

My question is for the three witnesses. I would like each of them to answer.

[Shannin Metatawabin]

I can start. This is Shannin Metatawabin from NACCA.

We are delivering the emergency response program for indigenous businesses. The program was a full two and a half months later than that for regular businesses, so we definitely have lost businesses.

The current increase in $20,000 to that emergency response has still not.... I have still not received word that our indigenous businesses are going to be receiving the same support. As far as timing and responding in a timely fashion, we're already behind. When we're starting to talk about recovery, I don't want to be behind. You have to engage the indigenous institutions on your panel today to ensure that the needs of our community are being met in time to ensure we all rebound at the same level. Otherwise, indigenous communities are going be rebounding more slowly and it will take a lot longer.

One of the members talked about funding. Funding is so important, because our indigenous businesses have been suffering from a 70% decline in government equity support to start businesses over the past 20 years. We need to support indigenous businesses at the level that enables them to be truly successful and to recover from this emergency.

[Tabatha Bull]

When we did our survey in May and asked businesses how long they could operate without further supports, at that time, 2% of the close to 900 we surveyed had already closed, and 10% of businesses predicted they couldn't continue operation for more than a month without support. Knowing that there was a gap in the support that was provided, we have significant concerns over that 10%. Also, over half of the businesses indicated that they were likely to fail within the next six months.

That is why this further survey we will be doing in the fall is so important for us to get an understanding of where indigenous businesses are in the economy and how many we may have unfortunately lost.

[Raymond Wanuch]

On the COVID-19 indigenous task force, I think we're going to make our database public facing, so that any procurement opportunity that can help our indigenous suppliers across the country is going to be offered up, and not based solely on COVID-19. That's one of the areas we're hoping will make an impact going forward.

[Sylvie Bérubé, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

My other question is also for you three.

There is talk of other actions. What other actions do you think the federal government could take to ensure the sustainability of the indigenous economy during the pandemic and in its aftermath?

[Shannin Metatawabin]

When I first presented in June, I outlined a couple of areas that would be positive. Those were to improve the conditions to the current emergency program; undertake an assessment of what we need to get back to business, so engage our community; return AFI funding to historical levels, or at minimum, meet the needs of our businesses because of that 70% decline; ensure that the growth fund that was announced by the government in 2019 continues because that's the source of access to capital for indigenous businesses into the future, so we want to make sure that happens; and ensure the 5% procurement. After a 35-year failure to ensure that indigenous businesses are part of the government business stream, I think now is the time to ensure that the government changes its culture internally to select more indigenous businesses and give us the supports to ensure we're successful this time.

[Tabatha Bull]

I agree with Shannin's points. I would just add looking at innovation dollars and set-asides or carve-outs for indigenous businesses that are able to pivot through the ISED innovation funding.

Additionally, I would add a consideration for infrastructure projects as prioritized for those projects that have indigenous businesses as partners or owners of those projects or equity participation, so that we can continue to support, outside of procurement, any project we're putting forward with support for infrastructure or shovel-ready funding that we consider as having indigenous equity.

[Raymond Wanuch]

I mentioned earlier the partnership with the Federation of Canadian Municipalities and Cando and the community economic development initiative. Again, for this third iteration coming up in the spring of next year, our funding's been cut in half and there are still a lot of applicants that would love to go through the process. I mentioned the largest indigenous community in Canada, that being Blood Tribe. That was ground zero of the opioid crisis. Dr. Esther Tailfeathers, a really good friend of mine, was front and centre there. I was on their health board for a while—

[The Chair, Liberal, Bob Bratina]

We're out of time right there, Raymond.

[Raymond Wanuch]

Okay.

[The Chair, Liberal, Bob Bratina]

I'm sorry to interrupt. We're trying to get everybody in before one o'clock.

Ms. Blaney, you have six minutes now.

Please, go ahead.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Thank you, Mr. Chair, and I want to thank all the witnesses for your testimony today.

Mr. Metatawabin, it's nice to see you again. I don't know if you remember me, but Andrew Leach introduced me to you last year, so it's good to have you here.

I was really shocked to hear that some of these organizations are having to forward some of the folks to Community Futures and regional economic branches because there is a difference in how they access the loans through those programs. Can you be a little more specific about what those are, what the challenges are and what the differences are?

You talked very clearly about how the second phase has to happen without delay. I've heard from some folks that even if it was retroactive, it would be helpful, but it's not always about being retroactive because often that's too late. I'm wondering if you could speak a little about that.

[Shannin Metatawabin]

When our program was launched, we found it was two and a half months after the Canadian response, right around the same time that the Community Futures network launched their programs. The RDAs were not all aligned on how they delivered it, so we had some discrepancies. Some RDAs are stacking CERB on top of their RRRF, as they're calling their relief program. They're able to go above the $40,000.

In that survey we did, 40% of them needed more than $40,000, and 25% of them needed more than $100,000. We needed to be more flexible. We didn't have that flexibility. All we had was $40,000. With larger loans and stacking, the CFDC network is going to be able to retain that capital to build up their loan portfolios after the loans are repaid. NACCA and our AFI network are not afforded that ability, and we've been asking for new capital for the network for 20 years now. That needs to be improved. Ontario has a program where it's fifty-fifty, non-repayable and repayable. I think that would make more sense, considering all the barriers that indigenous people face within their communities.

[Rachel Blaney, NDP, North Island—Powell River, BC]

I asked about the retroactive part, so I hope you will mention that, but the other thing I wanted to question is around start-up indigenous businesses. I'll start with you and then maybe go to Ms. Bull.

We know that across the board brand new businesses that were just starting up in Canada not too long before COVID-19 are really struggling. I'm wondering if you're hearing anything about start-up indigenous businesses. I think it's really important that we talk about this, because not only is this about supporting business, but there's the economic justice part of this and understanding that legislation, provincially and federally, has silenced and stifled indigenous businesses forever. If we're going to actually deal with that economic justice, we need to support them.

If you could talk about the retroactive pay for start-up businesses, Mr. Metatawabin, then I could move on to you, Ms. Bull.

[Shannin Metatawabin]

Thank you very much for the question.

Businesses are still planning. They're all readjusting to this new world that we're living in. A lot of them are going online. They're definitely marketing and providing more website and online services. Businesses are creating online types of businesses, but the hardest hit are the tourism-type businesses, which have lost an entire season. We really have to think about supporting them.

This retroactive idea that you have about going back to when the government first announced it would be great. We were initially told that we would, at minimum, mirror the Canadian emergency program, but we're not even afforded that right now with the delay in having those businesses being eligible for the $60,000. We really need to catch up and provide the support necessary to support our community.

[Tabatha Bull]

You're quite right. Thank you for acknowledging that with respect to indigenous businesses.

We definitely do see that a number of businesses in the indigenous economy are very young—less than five years old—and with a number of these supports in particular, we had a number of members who had not yet filed a tax return and couldn't apply for a number of the wage subsidies. They were so young that they didn't have revenue to be able to compare to as a gauge for the wage subsidy as well, and also for CEBA. Those have been some of the barriers. I know that there has been some work to fix some of those barriers, but that is a concern.

We need to look into that a little more to see about those young businesses and their survival rate through this period. Perhaps there is a recommendation or a potential program, so that as a priority we could support those businesses that have failed, or that were new businesses, in order for them to recover, innovate and return to the economy.

[Rachel Blaney, NDP, North Island—Powell River, BC]

I really appreciate the discussion around tourism businesses, because I'm hearing that as well. Tourism businesses—both indigenous and non-indigenous—are really struggling in my riding. Tourism-based businesses are really challenged at this time.

Could you speak to that as well, in terms of those businesses and what kinds of supports they would require to help facilitate them through this time so that we're still seeing them in their communities after COVID ends at some point?

[Tabatha Bull]

I know that Keith Henry at ITAC has developed a tourism economic recovery strategy for indigenous businesses. I won't speak too much to that because he is definitely the expert in that case. He has research on the requirement for additional funds.

I would just say that if we look at the recent report of the Canadian Federation of Independent Business on business survival rates, in their second group of business survivors are professional services or health care services as the businesses that are of most concern in terms of not being able to survive. If we look at Stats Canada, we can see that's a very high number of businesses in the indigenous community as well, so we also need to be putting some supports toward professional, health care and social assistance services.

[The Chair, Liberal, Bob Bratina]

Ms. Bull, I understand that you're going to be leaving us shortly. I want to thank you for your participation with the committee today.

For the committee, we have about a 25-minute round of questioning and 10 minutes left on the clock. I've checked with the clerk and we're not bumping into a subsequent committee, so with unanimous consent, we'll do the next full round of questioning.

Are there any thumbs down? I'm looking at the members and I don't see any thumbs down, so I'll take that as unanimous consent to carry on. We'll go to our final and second round of questioning.

For the Conservative Party, do I have Mr. Vidal or Ms. McLeod?

[Gary Vidal, Conservative, Desnethé—Missinippi—Churchill River, SK]

It's Ms. McLeod, Mr. Chair. With all due respect, we sent our speaking order to the clerk, so I'm not sure where the breakdown in communication is, but Ms. McLeod is next.

[The Chair, Liberal, Bob Bratina]

The breakdown is that we didn't do the second round of questioning. All of the names were cycled through that round, so when I went to the second hour it was a new list. You just carried on with it, which is fine—whatever you wish. That was the issue, Mr. Vidal.