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

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

Thanks. I appreciate that.

[The Chair, Liberal, Bob Bratina]

Okay.

Mrs. McLeod, please go ahead.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

If I understand correctly, Ms. Bull has to leave shortly. Maybe I can start with her unless she is down to minutes only.

You talked about an indigenous economic recovery plan. Can you talk to me about where that is at in terms of the process? Who would be involved in developing it? Can you give a bit more thinking around what you see happening with that?

[Tabatha Bull]

We've definitely done some thinking around this. We're working really closely with our other colleagues at the other national indigenous organizations who are here, in addition to NIEDB.

We really need to look at what we need to do from a perspective of across indigenous economies. That includes things like procurement, infrastructure spending and how we are supporting partnerships and infrastructure, similar to the announcement that was just made on indigenous natural resource partnerships. It also includes how we support that across the whole country, as well as innovation, as I mentioned.

Really, we are looking across all of government—provincially as well—and corporate Canada, so that we can continue to support indigenous economy through the recovery period and in the future. We are working on this national indigenous economic strategy. In the near term, we really need to be looking at where we need to be supporting for a recovery across all industries, as I mentioned earlier..

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

We've heard some pretty bleak figures about business failure from CFIB.

You had talked about having done some work. Are you perceiving the same or worse within indigenous businesses? Do you have any clear idea or do you need the results of the next survey before you can better articulate survival through a second wave?

[Tabatha Bull]

When we looked at our initial survey in terms of the StatsCan survey that was done through the Canadian Chamber of Commerce, we did see the [Technical difficulty—Editor] difficulty, so I expect we'll see something similar.

Then of course if we look at [Technical difficulty—Editor] the high areas in social services. We know that indigenous businesses are younger, that they have less access to financing and that the access to financing has been delayed. In a lot of cases they're in more regional or remote, rural areas, so I expect we'll see more of an impact exacerbated for our indigenous businesses.

Our plan is to do that comparison as well, so that we have the data to inform everyone here as to where we really see the additional impact.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

I'll now go to Mr. Metatawabin.

You have said that you proposed a tailored package. I know the government made modifications as it went along. We understand they were slow modifications.

Can you tell me what might have been in your tailored package that you still see as missing, on top of the structure of the loan programs? Is there anything more about this package you could talk about?

[Shannin Metatawabin]

One of the important things to know is that the AFIs have been delivering support to indigenous businesses for 35 years now. They know what their businesses need, but they need the flexibility. When they are put into this little box of $40,000 and $10,000 non-repayable, it doesn't give them too much flexibility to support a business that might need $80,000 or might need other support services. It makes it very difficult.

They need business support services. We have to work with each individual business to ensure that they are responding to this crisis in a meaningful way, so that they can survive through this. The support that has been announced to date is going to take us to March 31, 2021. What are we going to do after that? We really have to come up with another strategy to ensure that, in this uncertain time, we're going to last longer.

These businesses are hanging on. Our network has been suffering from reduced funding levels for over 20 years now. If we return business support, flexibility for larger loans, more non-repayables so that the indigenous business is not going to be strapped with all that debt, and a more timely response.... We should not be responding to the indigenous community two months after all the other Canadian responses are there.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

I certainly agree about the gap.

Mr. Wanuch, as much as it pains me to look at this, I think it's reasonable that some businesses are going to fail. It takes some work, I know from talking to other folks, and people need the opportunity and the skills and expertise not only to scale up businesses but also to scale down businesses if they aren't going to make it. Is there any training being done? I know your goal is to increase business, but are you doing anything in terms of supporting people who are going to have the challenges of dealing with the loss of their business?

[The Chair, Liberal, Bob Bratina]

I'm afraid it's yes or no. We're way over time. I apologize for that.

Can you hold on to that thought, Ray?

I explained that Madam Bérubé has to leave. As the chair, I'm going to move her two and a half minute question up to now.

Lenore, you'll be next after that in your normal rotation.

Madam Bérubé, please, go ahead for two and a half minutes.

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

Thank you, Mr. Chair.

My question is for the two remaining witnesses.

It was mentioned that, in the spring, the government announced $306.8 million in interest-free short-term loans and in non-repayable financial contributions to help indigenous SMEs and financial institutions.

Do you think the list of eligible activities and costs covered by the Indigenous Community Business Fund is adequate?

[Shannin Metatawabin]

We've been actively delivering the money that was announced by the government since June. It was two and a half months after COVID hit. It's going to take us to March 31, 2021. As far as adequacy goes, we can use that money to put it out to the community. If we can improve the flexibility and use this as an opportunity to capitalize the networks, to retain the capital as the CF network is going to be doing to be more flexible, to allow stacking and to allow AFIs to do their work to ensure they're supporting those businesses, then that money is going to go to work in a good spot.

I want to make a note to the committee that the money that was initially given to this network more than 30 years ago has been recycled 15 times. That money has been retained and has been doing this work.

[Raymond Wanuch]

I agree with Shannin.

I sit on the board of Settlement Investment Corporation. They are the small business lender for the Métis settlements businesses. I'm very thankful for that first tranche of $40,000 loans, of which $10,000 is a grant. Most of the feedback we've had has been about wishing that all of it was a grant. I think we've heard throughout the presentation here that we're just compounding the fact that there's more debt. Because a lot of our clientele are high risk anyway and a lot of them aren't bankable, they can't go to the big five for loans and mortgages, so we offer the only solution but we're only compounding the issue by lending them more money.

[The Chair, Liberal, Bob Bratina]

I'm sorry, but I have to interrupt there.

Ms. Zann, you're up next. You have five minutes. After that will be Ms. Blaney for two and a half minutes.

Ms. Zann, go ahead, please.

[Lenore Zann, Liberal, Cumberland—Colchester, NS]

Thank you very much.

I come to you today from the unceded territory of the Mi'kmaq in Nova Scotia, the people of the dawn.

It's been very interesting to hear what all the witnesses have had to say about mental health and health and businesses in indigenous communities.

I really wish you all the very best, because I know it's a very difficult time right now. It's a very difficult time for all businesses. I'm sure most businesses that I've talked to would have loved to have grants instead of loans, but such is business, in a way. It's all about trying to become successful and then being able to maintain that. It's a very difficult time right now to do that.

Mr. Metatawabin, when you spoke in the spring, you also mentioned that you'd just signed the contribution agreement with Indigenous Services Canada with respect to the $306.8-million fund for indigenous SMEs. At the time, you were expecting the funding to start flowing by mid-June.

Chief Perry Bellegarde of the Assembly of First Nations noted that only 6,000 businesses would be able to benefit from that funding, leaving most of the 40,000 indigenous businesses in Canada without support.

How many indigenous businesses have actually received funding to date? Is there any funding left? If so, how many more businesses will receive funding?

[Shannin Metatawabin]

The funding has experienced some competition from other measures of delivery, namely the CF network, which has some better conditions than the AFI network. Half of our members are CFs and aboriginal capital corporations, so it's inequitable already. Some of them can access the CF network. What we are seeing is that they are actually recommending that their clients go to that measure, because at the end of the day, they are going to be able to retain that capital. The support for the AFI network is the last choice, I suppose you could say. That made it difficult.

We have supported 1,500 businesses to date. Right now $60 million is in their hands. As well, 100 million dollars' worth of contracts have been signed with 37 AFIs, and they are busy at work putting it out there. I have been reluctant to.... This was initially set up for current and former clients of the AFI network, and we have supported 48,000 loans over the past 35 years.

It's time to open it up, improve the flexibility and ensure that we're planning to March 31, 2021, because that's what all our AFIs are doing. They are supporting principal payments, operational expenses and interest payments for these businesses, so that they can survive and get some certainty as to what's happening with the pandemic.

We're going to be undertaking a survey as well to understand what other services are going to be required, but I do know that the AFIs need business support services because they have to sit down with all the clients. They have been reduced in funding over the past 20 years by 70%. Where you had four people working in the business area, now you have one, so it's time to return to that level again.

[Lenore Zann, Liberal, Cumberland—Colchester, NS]

I noticed that the AFI is also included when we're talking about the latest new announcement made by Chief Terry Paul in Membertou with reference to the Clearwater deal. Were you involved with that at all? This seems to be a very exciting announcement that our first nations people are going to be seven different communities now involved in one of the biggest seafood operations in Canada.

Could you expand on how that is going to work for first nations in the future?

[Shannin Metatawabin]

It's an example of where the indigenous community is going. This is a $1-billion transaction where the indigenous community is now part of their traditional harvesting livelihood, so they will maintain ownership of that livelihood.

In Canada right now, you now have the AFI network that has capital. They are lending to small and microbusinesses, because 85% of them have less than five people working for them. As we grow, and as we become more complex, we need more capital, so the growth fund has been created. We have the First Nations Finance Authority putting bonds on the market, raising capital and lending it out to communities.

There are different levers of capital attraction, but the private sector is becoming more involved in this growing economy. We welcome that, and we want to work with them.

[Lenore Zann, Liberal, Cumberland—Colchester, NS]

Thanks very much. Wela'lin.

[The Chair, Liberal, Bob Bratina]

Ms. Blaney, you have two and a half minutes. Please, go ahead.

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

Thank you, Mr. Chair.

I'm going to come back to you, Mr. Metatawabin. You talked about and you said repeatedly that there has been a 70% decrease in funding over the last two decades, if I remember correctly.

Could you speak to that? Would bridging that gap really provide the immediate relief that is so necessary across the country?

[Shannin Metatawabin]

The important thing to know is that to enable capital to be deployed, you need to enable it with something. The same thing happened with the Business Development Bank of Canada. When it was first launched, it had tax incentives, it had equity and it had different levers to ensure that capital went out to the community. It had lots of support services, and it had access to an unlimited amount of capital whenever it needed it, because it was the Government of Canada.

We haven't been afforded that same ability to access capital to have business support services meet the needs of what our clients need. To have the levers of enabling that capital to go to the community, the equity program needs to be restored to what it was. Back in the nineties, it was an $80-million program. We're at around $30 million now, so it has been reduced. The value of that money is a lot less than what it used to be, so we have really lost a lot.

We need to return to that level, so we can deploy that capital out to the community and get businesses started, so that indigenous people are part of the prosperity of Canada. Canada wants to get back to being prosperous, and we have to be part of it this time.

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

I think that's interesting, because you're talking about how it was before. Now we're dealing with the added burden of COVID-19. Even if that was returned, it would still not address that bigger barrier.

What do you think we need to do? This is a committee that will provide recommendations to the government. Will that increase be the changing factor, or do we need even more because of COVID-19?

[Shannin Metatawabin]

Supporting our institutions fully, so that Ray, Tabatha and I through our organizations can support our community, is a good start, as is dealing with the Indian Act. It prevented us from starting a business, from buying machinery and farming and all these things so that we're in this position where we're starting from way behind. Enable us to have the right business support services so that we can engage every community member who wants to start a business. Close the gap so that somebody has a house with a pipeline so that they can flush the toilet.

These are all minimum requirements of human rights that our communities still do not have. These are important things we need in place to ensure that we can think about starting a business rather than trying to survive each and every day.

[The Chair, Liberal, Bob Bratina]

Thank you very much.

Gary Vidal, I finally got to you. In future, I will use the list consecutively, as you presented it, so that we don't have that problem.

You have five minutes. Please go ahead.