Why reconciliation means supporting Indigenous entrepreneurs

Indigenous-led businesses help combat economic marginalization — but they face many barriers. TVO.org spoke with three organizations about how to foster entrepreneurship and keep money in communities
By Haley Lewis - Published on May 6, 2019
First Nations Secretariat in Bothwell, Chatham-Kent in Ontario
The Southern First Nations Secretariat, based in Bothwell, a small community in Chatham-Kent, represents seven First Nations communities. (facebook.com/Southern First Nations Secretariat)

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From 2003 to 2011, the estimated number of Indigenous entrepreneurs across the country increased from 27,195 to 38,000. According to a countrywide survey from the Canadian Council for Aboriginal Business, more than 43,000 Indigenous people were self-employed in 2016 — 10,320 of them were based in Ontario.

But, as the Conference Board of Canada notes, research shows that Indigenous people continue to “face significant barriers to accessing various forms of support (e.g., capital, equity, business training, business planning) for their start-ups.” One of the most commonly referenced issues, it says, is locational — would-be business owners simply don’t have access to financial services.

And even when they can access such services, loans can be difficult to obtain: Indigenous entrepreneurs are sometimes seen as “high-risk,” says Shannin Metatawabin, CEO of the National Aboriginal Capital Corporations Association.

“We have policies that the Indian Act put in place that say we can’t put up security on our communities,” he says. “We’re not close to the market. We don't have any equity. Our families are not rich.”

That’s why experts such as Metatawabin argue that any meaningful process of reconciliation must involve economic reconciliation: only then can the ongoing dependence on government programs and the economic marginalization of Indigenous people be combatted.

TVO.org spoke with three different Indigenous-led organizations about entrepreneurship, collaboration, and the work they’re doing to foster economic development in communities across the province.

National Aboriginal Capital Corporations Association

NACCA was created in 1997 to support and advocate for Aboriginal Financial Institutions across the country. The Business Development Bank of Canada, founded in 1944 to help create and develop Canadian businesses, had failed to address high-risk lending or to take into account the barriers Indigenous people face. “We created our own system because the BDC was not providing support to our communities,” says Metatawabin. “We have not been supported and respected in the same sense — we are an afterthought of the government.”

NACCA has, to date, issued 46,000 loans to Indigenous entrepreneurs, including those behind such businesses as Manitobah Mukluks, Big Soul Productions, and Luxx Ready to Wear. With a repayment rate of 97 per cent, Metatawabin says, the program has been a success.

The association was established when several AFIs joined together — it was initially supported through approximately $240 million in government funding but hasn’t received any additional capital funding since. The money has been loaned out, repaid, and loaned out again, contributing to the $2.5 billion that AFIs have distributed since the ’80s.

NACCA received an additional $100 million in the 2019 federal budget; it will use that to start an Indigenous Growth Fund, which it will leverage the government investment in hopes of attracting private-sector capital to increase the number of loans it can provide.

Metatawabin says that successful ventures often focus on addressing local needs — and that more communities should look internally for revenue-generating opportunities. “Right now, our communities only think in a lens of poverty; they only plan around poverty,” he says. “We need to start looking towards wealth creation.”

Southern First Nations Secretariat

The Southern First Nations Secretariat, based in Bothwell, a small community in Chatham-Kent, wants to stop money from flowing out of the seven First Nations communities it represents. Recently, it conducted an external-spending survey and found that about $200 million leaves the community annually at the household level and about $38 million at the government level.

“Every economy spends money externally,” says Ashley Sisco, a consultant on the project. “But we can agree that those numbers are enormous.”

SFNS’s project identified several objects of such external spending, including education, legal fees, group benefits, transportation, and electricity. In response, the communities determined that one of the best ways to grow their economies would be to leverage their purchasing power by spending their money together. “We can go to an organization and say, ‘This is what we’re currently paying, [but now] we are going in together, and we would like a discounted rate,” says Sisco.

SFNS has also developed an economic toolkit intended to encourage community members to hire local, buy local, invest in their own communities, and access services from one of the seven member nations — it includes a skills bank filled with local people for hire, a business directory, and a business-viability tool (which allows the user to indicate which goods or services they intend to provide and where they’d be based and then calculates the market opportunity).

Sisco says the kit will also help those looking to employ or do business with Indigenous people. “Say someone’s looking to hire more First Nations people — they now have access to this database,” says Sisco. “This also applies pressure to those who are local to go local.”

Anishnawbe Business Professional Association

Earlier this year, the Anishnawbe Business Professional Association was formed to advocate for and support Indigenous economic and business development in northern Ontario. This is particularly important, says Jason Rasevych, the association’s president, because small businesses in the region face unique challenges: they’ve had no one to advocate on their behalf, may not be familiar with industry processes, have to deal with racism, and come in low on governments’ lists of priorities.

The ABPA intends to help individuals who want to get involved in the procurement process and provide them with ongoing mentorship. It also aims to build a network of Indigenous businesses in the north and create a publicly accessible database of them.

“We’re really frustrated with contractors saying, once the project is over, ‘We didn’t know your company existed,’ or ‘We didn’t know First Nations business existed,’” says Rasevych. “As a group, we’re tired of that excuse, and we won’t accept it in northern Ontario anymore.”

Rasevych hopes that, as ABPA grows, it will help dispel racist stereotypes and misconceptions about Indigenous-owned businesses.

“Something that we’re addressing is breaking down those barriers of racism and discrimination in business in the north,” says Rasevych. “If an Anishnawbe business wants to do business in this area, they should be provided with the opportunities based on their own merits.”

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