How Is The Federal Government Supporting Indigenous Small Businesses?

The Federal and Provincial governments have identified small businesses as being especially vulnerable during the COVID 19 crisis and, as such, they are releasing support funding. But what about businesses owned and operated by Indigenous Canadians?

There are over 6,000 Indigenous-owned businesses across Canada and many already face unique challenges disproportionate to other businesses as a result of remote or rural locations and having less access to capital.

Here’s how the Canadian government is supporting these businesses through the COVID-19 pandemic.

How Much Funding Is Earmarked For Indigenous Businesses?

During the nonessential business lockdowns occurring across the country, the Federal government has pledged up to $306.8 million in funding for small and medium-sized businesses owned by First Nations, Inuit, and Métis people. This funding also covers Indigenous limited partnerships, many of which may not have qualified under the original Canada Emergency Wage Subsidy Program.[1] $15 million of this money has been set aside for organizations providing services to those living off reserves or in urban centres.[2]

This pledge to Indigenous businesses has been interpreted as a way to cover some of the oversights in the coverage of the original Canadian Emergency Response Benefit.[3] The Prime Minister also says that the funding will also allow many entrepreneurs to survive through the COVID-19 pandemic and recover once the pandemic and its related restrictions are over.

How Can Business Owners Access This Funding?

Businesses will be eligible for up to $40,000 in financial aid: $30,000 as an interest-free loan, and the rest as “a grant” that will not need to be paid back.[4] These short-term, interest-free loans and non-repayable grants will be distributed through Aboriginal financial institutions and administered by the National Aboriginal Capital Corporations Associations (NACCA).[5]

NACCA is a national network of 59 Aboriginal financial institutions that provides financial services, loans, and grants to Indigenous entrepreneurs looking to start new businesses or expand existing ones.[6]

The support for Indigenous businesses “will be very much along the same lines as what is accessible for non-Indigenous businesses,” said Christopher Duschenes, director-general of the Economic Policy Development Branch of Indigenous Services Canada.

Other Unique Areas For Aid

The business funding options are a start. Some additional Indigenous Institutions not covered do have stimulus options available to help them through this crisis and beyond. These come as communities attempt to address the unique challenges faced both during the lockdown and once restrictions are lifted. Friendship centres are but one example. Such organizations are often at the “front lines” of the crisis and have been overwhelmed with requests for help as the communities they serve struggle to cope.

The Federal Government announced that Friendship centres across Canada will receive $3.75 million to deal with COVID-19. However, some provincial branches are saying that the funding will not be enough to meet a demand that, during the pandemic, has grown by 200% in some places.[7]

Border Security

Many First Nations have closed their borders to non-residents in an effort to protect the health and safety of community members who are particularly vulnerable given the prevalence of underlying conditions, overcrowding and poor or limited access to health care and in some cases, safe drinking water. However, as governments begin talking about a phased approach to opening up and loosening restrictions on businesses and social distancing, communities will need to ask tough questions: do they open up, do they keep their borders closed and maintain stringent standards with respect to physical distancing and self-isolation, or do they opt for their own phased-in approach tailored to the particular needs and vulnerabilities of their community?   

Ultimately each community will need to assess both the social and economic impacts of the COVID 19 and determine what course of action will be safest for their citizens.

 

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