More federal assistance for Indigenous businesses required, says COVID-19 taskforce

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For the survival of many Indigenous businesses during this pandemic, additional financing and support is required, according to a recent survey conducted by the Indigenous Business COVID-19 Taskforce.

“44 percent of Indigenous businesses surveyed expect to fail … without further support.”

Nearly half (44 percent) of small Indigenous businesses surveyed expect to fail within the next three to six months without further support. Ten percent anticipate they will not last more than a month without additional assistance, while two percent have already closed.

The Indigenous Business Survey, which took place between April and May 2020, included responses from 838 Indigenous Canadian business owners and executives.

The self-selected survey was conducted by the Indigenous Business COVID-19 Response Taskforce, a group of Indigenous leaders from across the country that aims to provide the Government of Canada with information regarding the state of Indigenous businesses. The research was supported by Indigenous Services Canada.

“Sound research is crucial to ensuring that Indigenous businesses get the resources they need to continue to support their families, communities and the broader Canadian economy,” said Samantha Morton, director of research at the Canadian Council for Aboriginal Business.

Approximately half (47 percent) of Indigenous businesses surveyed have applied for government assistance. Nearly a quarter of total respondents require $50,000 or more to maintain normal business operations.

The survey data also suggested that amongst the Indigenous business community, women and Inuit-owned companies have been hit particularly hard. Sixty-one percent of women-owned businesses surveyed reported experiencing a “very negative” impact, compared to 53 percent of men-owned businesses. Similarly, more Inuit-owned enterprises (38 percent) said they have experienced a revenue drop of at least 50 percent than Métis (27 percent) or First Nations-owned enterprises (31 percent).

RELATED: Federal government allocates $306 million to Indigenous businesses during COVID-19 pandemic

Overall, 91 percent of Indigenous businesses surveyed reported experiencing a negative impact from COVID-19.

In light of these findings, the taskforce has called on the Government of Canada to institute supports that address barriers facing Indigenous businesses, provide more assistance to Indigenous businesses at risk of closing down in the near future, and conduct further research into the evolving needs of Indigenous businesses during and after COVID-19.

Most of the Indigenous businesses surveyed were small, privately owned businesses from either Ontario, British Columbia, or Quebec. Half were located inside Indigenous communities, while half were located outside. Respondents were also 58 percent male.

The survey also found that 12 percent of Indigenous businesses could provide supplies or equipment to meet Canada’s medical needs, and 8 percent could either rapidly scale or pivot production to provide Personal Personal Protective Equipment (PPE).

In response, the taskforce asked the federal government to adopt a more proactive PPE procurement strategy to better engage Indigenous businesses.

12 percent of Indigenous businesses surveyed could provide supplies or equipment to meet Canada’s medical needs.

To support this call to action, it launched a national database of Indigenous companies able to supply COVID-19 related goods for Government of Canada buyers, which the taskforce will oversee. The independent database, which aims to increase Indigenous representation in federal government supply chains, was developed by Acosys Consulting Services, an Indigenous business, with the support of Indigenous Services Canada.

“Through this unprecedented collaboration, we hope to see an increase in Indigenous representation in government procurement,” said the members of the Indigenous Business COVID-19 Response Taskforce. “Moving forward, we call on the federal government to develop and implement a proactive procurement strategy to directly engage Indigenous businesses that can supply or pivot to supply PPE.”

Through its COVID-19 Economic Response Plan, the Government of Canada allocated up to $306.8 million in short-term, interest-free loans, and non-repayable contributions to First Nations, Inuit, and Métis businesses. This funding was designed to support small to medium Indigenous enterprises not eligible for the Canadian Emergency Business Account small business loan program. It serves Indigenous enterprises that are current or former clients of an Aboriginal Financial Institution, providing up to $40,000 via interest-free loans of $30,000 and non-repayable contributions of $10,000 maximum.

More recently, the federal government announced $133 million in additional support for Indigenous businesses in the travel and tourism sector, which has been hit particularly hard by COVID-19.

Image source Tim Mossholder via Unsplash

Josh Scott

Josh Scott

Josh is a journalist interested in telling Canadian business and tech stories. His coverage is more complete than his moustache.