Indigenous and Northern Affairs Committee on May 29th, 2020

[The Chair, Liberal, Bob Bratina]

I call this meeting to order.

Welcome to meeting number 12 of the House of Commons Standing Committee on Indigenous and Northern Affairs. I would like to start by acknowledging that I am joining you today from the traditional territory of the Haudenosaunee, Anishinabe and Chonnonton nations.

Pursuant to the order of reference of April 20, 2020, the committee is meeting for the purpose of receiving evidence concerning matters related to the government’s response to the COVID-19 pandemic. Today’s meeting is taking place by video conference, and the proceedings will be made available via the House of Commons website.

During this meeting, the webcast will always show the person speaking rather than the entire committee. To facilitate the work of our interpreters and ensure an orderly meeting, I would like to outline a few of the rules.

Interpretation in this video conference will work very much like in a regular committee meeting. You have the choice at the bottom of your screen of either floor, English or French. To resolve the sound issues raised in recent virtual committee meetings and ensure clear audio transmission, we ask those who wish to speak during meetings to set your interpretation language as follows: If speaking in English, please ensure you are on the English channel, and if speaking in French, please ensure you are on the French channel. As you are speaking, if you plan to alternate from one language to the other, you will also need to switch the interpretation channel so it aligns with the language you are speaking. You may also want to allow for a short pause when switching languages.

Before speaking, please wait until I recognize you by name. When you are ready to speak, you can either click on the microphone icon to activate your mike, or you can hold down the space bar while you are speaking. When you release the bar, your mike will mute itself, just like a walkie-talkie.

This is a reminder that all comments by members and witnesses should be addressed through the chair. Should members need to request the floor outside of their designated time for questions, they should activate their mike and state that they have a point of order. If a member wishes to intervene on a point of order that has been raised by another member, they should use the “raise hand” function. This will signal to the chair your interest in speaking. To do so, you should click on “participants” at the bottom of your screen to the left of the globe, and when the list pops up, you will see next to your name that you can click on “raise hand”.

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Should any technical challenges arise, for example, in relation to interpretation or if you are accidentally disconnected, please advise the chair or clerk immediately, and the technical team will work to resolve them. Please note that we may need to suspend during these times as we need to ensure all members are able to participate fully.

Before we get started, can everyone click on their screen, in the top right-hand corner, and ensure they are on gallery view? With this view, you should be able to see all the participants in a grid view. It will ensure that all video participants can see one another.

During this meeting, we follow the same rules that usually apply to opening statements and the rounds for questioning of witnesses during our regular meetings. Each witness will have up to five minutes for an opening statement, followed by the usual rounds of questions from members. I'll be a little tough on the timing to ensure we can go as far through our cycle of questioners as possible.

For both the witnesses about to speak, I'll hold you as close to five minutes as I can, and similarly for questioners, there will be six-, five- and 2.5-minute rounds.

Welcome to the witnesses on our first panel. From the Canadian Council for Aboriginal Business, we have Tabatha Bull, who is president and chief executive officer. From the National Aboriginal Capital Corporations Association, we have Shannin Metatawabin, the chief executive officer, and from the Northern Air Transport Association, we have Sébastien Michel, member of the board of directors.

Ms. Bull, please start now. You have five minutes for your presentation.

[Tabatha Bull, President and Chief Executive Officer, Canadian Council for Aboriginal Business]

[Witness spoke in Ojibwa and provided the following text:]

Aanii, Tabatha Bull n'indignikaaz, Nipissing n'indoonjibaa, Migizi dodem.

[Witness provided the following translation:]

Hello. My name is Tabatha Bull. I am from Nipissing First Nation, and I belong to the Eagle Clan.

[English]

Thank you, Mr. Chair and all distinguished members of the committee.

Speaking to you from my home office, I acknowledge the land as the traditional territory of many nations, including the Mississaugas of the Credit, the Anishinabe, the Chippewa, the Haudenosaunee and the Wendat peoples.

My name is Tabatha Bull, and I am the president and CEO of the Canadian Council for Aboriginal Business, or CCAB. I'm honoured to speak here on behalf of our association regarding the government’s response to COVID-19.

More than any other time in history, indigenous issues need to be top of mind for the Government of Canada and the Canadian public. Since 1984, CCAB has been committed to the full participation of indigenous peoples in the Canadian economy. Our work is backed by data-driven research, recognized by the OECD as the gold standard on indigenous business data in Canada.

The coronavirus has quickly changed our business and personal lives, but we are all in this together and we must work collaboratively to repair the economic damage and recommit ourselves to reconciliation and a prosperous indigenous economy for the benefit of all Canadians. CCAB is working in collaboration with the federal government to make sure indigenous businesses across the country have the resources and information they need to make it through the economic downturn from COVID-19.

Understanding the unprecedented efforts that government has made in providing supports and programs at a faster pace than ever before, many of the programs that were launched initially excluded indigenous business. While the government has been responsive to our advocacy to close the gaps, the associated delay creates an increased negative impact that is unique to indigenous business. In order to level the playing field, the whole of government must put indigenous businesses at the forefront to ensure they are able to access government programs as they are rolled out, to ensure immediate inclusion.

In collaboration with leading national indigenous organizations, CCAB recently launched the COVID-19 indigenous business survey as part of a COVID-19 response task force. The survey aimed to understand the unique impacts of the COVID-19 pandemic on indigenous-owned businesses in Canada, to identify the current barriers and gaps with government programming, and to gauge the capacity of indigenous businesses to supply PPE to the federal government.

More than 90% of the 843 indigenous business respondents have experienced a very or somewhat negative impact on their business operations. Almost 30% of indigenous business respondents have reportedly shut down their offices and facilities, while almost 20% have closed their business entirely due to COVID-19. Forty-four per cent of indigenous businesses have indicated that without support they are likely to fail in three to six months, in addition to the 12% that have already or will close their business within a month.

The loss of indigenous businesses on this scale has a direct adverse impact on the indigenous economy, and in turn indigenous communities. This is precisely why any delay must be avoided.

I would like to share with you some examples of gaps in the programming the Government of Canada announced to support businesses through this pandemic.

First, the initial eligibility of CEBA allowed for only taxable income to be counted toward payroll eligibility. We appreciate that this eligibility criteria was changed quickly upon the issue being raised; however, this delayed the ability for many on-reserve indigenous businesses to access the program.

Second, Bill C-14 initially left many large indigenous-owned businesses ineligible for the wage subsidy. CCAB and many of our members identified this potential gap in advance of Bill C-14. We appreciate this was addressed on May 15; however, this meant that some indigenous-owned businesses were delayed by three weeks in applying for the wage subsidy.

Another gap still exists in that the BCAP cannot be utilized for the payment of dividends. This presents a barrier to many indigenous economic development corporations that support vital social programming for their affiliated nations through the payment of dividends to them as shareholders. The point again is that indigenous business must be the government’s first thought, not an afterthought, when devising programs to aid all Canadian businesses.

Turning to the topic of government procurement, there are indigenous businesses that can readily provide supplies or equipment to meet Canada’s medical needs or that have the capability to rapidly scale up or pivot production to provide PPE. The CCAB and other organizations have provided lists of such indigenous businesses to numerous federal departments through the course of the pandemic. However, not one of them has secured a procurement contract to date.

Last year was CCAB’s second year of our Supply Change aboriginal procurement initiative, a driving force behind the groundbreaking federal government mandate to set an indigenous procurement target of at least 5%. The federal government and national indigenous organizations can and should continue working together to connect indigenous suppliers to procurement officers. Efforts to increase procurement opportunities for indigenous businesses, now and in the future, will prove mutually beneficial for business and government, and help indigenous businesses stay afloat during the pandemic and expected recovery period.

It's imperative that all federal departments put indigenous business considerations first. Vast opportunities exist to support the indigenous economic recovery, not only through procurement but in future programs such as shovel-ready projects. We cannot allow COVID-19 to set us backwards on our collective path to close the gap.

CCAB is committed to continuing to work in collaboration with the government, our members and partners to help rebuild and strengthen the path towards a healthy and prosperous Canada.

Thank you all for your time. Meegwetch.

[The Chair, Liberal, Bob Bratina]

Thank you very much.

Next, from the National Aboriginal Capital Corporations Association, is Shannin Metatawabin, chief executive officer.

Please go ahead for five minutes.

[Shannin Metatawabin, Chief Executive Officer, National Aboriginal Capital Corporations Association]

Hello, and thank you.

My name is Shannin Metatawabin. I am the chief executive officer of the National Aboriginal Capital Corporations Association. I'm also a member of the Fort Albany First Nation of the Mushkegowuk nation.

Thank you for the invitation to speak to you today regarding the impacts of COVID-19 on the indigenous businesses in Canada.

Before I start, I want to acknowledge that this call is being hosted on the unceded territory of the Algonquin people.

The National Aboriginal Capital Corporations Association, commonly referred to as NACCA, represents 59 capital corporations from coast to coast to coast. Our network of aboriginal financial institutions provides developmental lending to first nations, Inuit and Métis businesses. NACCA is also a program-delivery partner of Indigenous Services Canada. Our organization administers the delivery of the aboriginal business financing program on behalf of the Government of Canada.

Aboriginal financial institutions are an incredible success story. For over three decades our members have been on the front lines, working with our indigenous businesses to ensure that they thrive and contribute to the growth of Canada's economy.

Like mainstream businesses, indigenous SMEs have been negatively impacted by COVID-19. The Prime Minister's announcement on April 18 of stimulus support was welcome news: $306.8 million is being allocated to negatively impacted businesses. NACCA will deliver programming for emergency loans in partnership with the network of aboriginal financial institutions. I am pleased to inform you that I just signed a contribution agreement with Indigenous Services Canada on Tuesday, a full two months later than the mainstream programs, and funds will go out to our network members in the next two weeks.

For the past 30 years, aboriginal financial institutions have worked in a program partnership with the Government of Canada. With the help of modest federal subsidies, they have provided over 47,000 loans, totalling $2.7 billion, to first nation-, Inuit- and Métis-owned businesses. Each year, financial institutions make over $120 million in loans to 500 indigenous-owned start-ups and 750 existing businesses.

Indigenous businesses are key drivers of employment, wealth creation and better socio-economic outcomes for indigenous communities and people. Across the nation, at any time, businesses that have active loans with our aboriginal financial institutions employ over 13,000 people.

COVID-19 has hurt many of our businesses, something that our network expected. In mid-March, just as the potential impacts were coming into focus, over 95% of our members indicated that their existing clients would be negatively impacted. Shortly thereafter, various provinces and territories declared states of emergency, resulting in closures of many businesses.

The impact on indigenous communities has been even greater. All sectors have been touched by the response to COVID-19. In late April 2020, the indigenous business COVID-19 response task force, of which NACCA is a member, launched a survey. Of the over 900 indigenous businesses that responded, 92% stated that the pandemic's economic impact has been either very or somewhat negative on their operations.

The most significant impacts have been in tourism, accommodation, food services, hospitality, transportation services and retail trade, all sectors with heavy concentrations of indigenous businesses. We are also noticing various regional impacts, such as in the fisheries in the Atlantic provinces, and in oil and gas in Alberta. As one of the members put it, “No sector will be immune from this event.” This has been the case.

With the concerns of our members in mind, we have some key recommendations for your committee.

Number one, improve the current emergency response program. Indigenous businesses have been waiting and hoping for support throughout this crisis. Recently, we can confirm that the support is coming. The same $40,000 that was announced for the mainstream will be provided to our indigenous businesses, which includes a $30,000 loan and a $10,000 non-repayable contribution.

For indigenous businesses, the program could be drastically improved if the non-repayable enabler were increased. After all, COVID-19 is only the latest in a whole series of barriers that indigenous businesses have to overcome. Impediments thrown up by the Indian Act, remoteness, land tenure and poor socio-economic conditions on reserves are factors that non-indigenous business owners do not have to contend with. A larger non-repayable allowance would acknowledge those additional barriers.

Beyond this, the COVID-19 response task force survey found that 40% of indigenous businesses will be unable to take on new debt. They will generally need to make twice the effort in order to repay a loan, compared to an average Canadian business. As well, 46% of indigenous businesses in the same survey indicated needing more than $40,000 to survive longer than four to six months. These findings reinforce the need for additional non-repayable capital and support for larger and community businesses, which was absent.

Number two goes back to business strategy—

[The Chair, Liberal, Bob Bratina]

Sorry, Mr. Metatawabin, we're right at time now. Hold on to those points and we can reprise them at question time.

Now, from the Northern Air Transport Association, Sébastien Michel, a member of the board of directors, is joining us.

Mr. Michel, please go ahead for five minutes.

[Sébastien Michel, Member, Board of Directors, Northern Air Transport Association]

Dear Mr. Chairman and finance committee members, thank you for inviting the Northern Air Transport Association to this important committee.

NATA was formed over 40 years ago to support the economic development of northern Canada with safe and sustainable air transportation.

My name is Sébastien Michel. I am the director of flight operations and operations manager at Air Inuit, as well as a member of the NATA board of directors.

Air Inuit is a private entity owned by the Makivik Corporation, employing close to 800 people. We operate a various fleet of 30 aircraft over four types to provide essential services to the 14 communities of Nunavik and one in Nunavut. Furthermore, our network extends throughout the rest of Canada.

In Nunavik and elsewhere, air travel is the means of transportation to and from isolated communities. Air Inuit is a lifeline. It is our mission to support the growing needs and enhance the lives of the people of Nunavik through a number of social, educational and cultural programs. Through scholarships and affirmative actions, we promote access to professional skills. We are especially proud of our Sparrow program. A notable graduate of the program became the first female Inuk captain. A commemorative stamp was put out in her honour in 2017.

I would like to begin this information session by recognizing the efforts of the Standing Committee on Indigenous and Northern Affairs. We are grateful for the Government of Canada's initial funding to support the airline industry.

Today, I will emphasize the importance of further support for northern air operators. Essential services, as well as profitable operations, are required in order to ensure the public health and economic sustainability of the communities we serve. Notably, all NATA members have developed relationships with indigenous groups.

The impact of COVID-19 on the airline industry is well documented. Due to travel restrictions and new quarantine rules, some carriers have been forced to cease flying entirely, but they still carry the burden of overhead expenses. Many other operators have largely seasonal operations and have either carried loss or made investments over the winter months in anticipation of the upcoming summer. Those operators are now potentially unable to resume their operations or face a dramatically reduced demand that is insufficient for recovery. Others are continuing their essential service operations at significant financial losses.

Given the drop in activity, many companies have reduced their flight operations, but they still need to keep air crews and maintenance staff. It is impossible to cover all the overhead incurred with the operating margins of reduced operations.

Despite that, our members still have a strong sense of their social responsibility. However, that is not sustainable. For instance, if Air Inuit slowed down its services, or even suspended its operations, the entire population of Nunavik would be isolated. As private businesses, we are not responsible for funding, with significant losses, the airline services essential to the safety and survival of all Canadians living in isolated northern communities.

Northern Canada accounts for over 40% of Canada’s land mass. The majority of the communities do not have the infrastructure and resources that are taken for granted in southern Canadian cities. Many northern communities have no road access, and with there being only a handful of paved runways, northern air carriers provide a unique and essential component to Canada’s travel network. Northern operators are often the only means of providing access to medical supplies and resources, food and other essential supplies. The demand for these services alone is not viable.

In many cases, the extra work from profitable operations help to sustain regular and essential services. These different operations both support and rely upon each other. Removing one will lead to the collapse of the whole. In order to ensure adequate service, northern operators are compelled to operate flights that a profit-oriented air carrier would cancel. However, our cost reduction measures, in the context of the services we offer, are very limited, and they put significant pressure on the financial capacity of our members.

NATA encourages the various governments to begin the careful restart of the economic initiatives, programs and social activities that are vital to the sustainability and self-sufficiency of Canada’s northern communities. NATA’s air operators are lifelines for the Canadians who call the north their home and who help to secure Canada’s sovereignty across this largely inaccessible region.

In that spirit, we are asking that the government provide the northern airline industry with quick and ongoing assistance, so that the airline industry can overcome the unprecedented difficulties it is facing.

[The Chair, Liberal, Bob Bratina]

We are at five minutes. Thank you very much.

Once again, to all of our witnesses, if there are issues that you haven't covered and don't come up through the questioning period, please provide a written submission to the clerks and that will be circulated among us. We don't want to lose any information that you feel you want to share.

With that, we will go to our round of questioners. In the six-minute round will be Mr. Vidal, Ms. Damoff, Ms. Bérubé and Ms. Gazan.

Gary Vidal, go ahead, please, for six minutes.

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

Thank you, Mr. Chairman.

I want to thank our witnesses for their willingness to come and participate in our committee this morning. Obviously, we appreciate your knowledge and experience and the things you hear on the ground that you can share with us. It means we can end up with a quality report that helps us structure the reaction to COVID-19.

In the first two presentations this morning, I heard a fair amount about the fact that indigenous businesses were excluded from a number of the original programs that were announced by the government. In fact, even since those adjustments were made, there have been large and long delays.

I personally was involved pretty substantially in advocating for the inclusion of indigenous limited partnerships in the CEWS program. I had the opportunity to advocate for that with the Minister of Finance and also with the Minister of Indigenous Services. Ultimately, the work that many of you did, and hopefully some of the work that we did, resulted in some success through that advocacy.

I will start with Ms. Bull.

Can you expand a little bit on the impact and frustration that the original exclusion from CEBA, CEWS or some of these things caused to indigenous businesses? There was that original exclusion, and now there's a long delay, so there has been a long period of uncertainty and frustration that I am hearing about from businesses in indigenous communities. Could you maybe just expand on the impacts that you're hearing about from your people on the ground in your communities?

[Tabatha Bull]

Yes, thank you.

We definitely had similar conversations, lengthy conversations. Thank you also for your advocacy.

I don't believe that any of those exclusions were intentional. When things are raised that have excluded indigenous business, based on a lot of items that are in the Indian Act, or because they are on reserve or because of tax and no-tax issues, it's not that we think that is intentional. However, we are really advocating that it is something that needs to be considered initially.

The indigenous economic development corporations are corporations that staff 800 or more employees. Most of them, or a large majority of them, are indigenous employees. They support their communities through vital support programming. Some of those economic development corporations had to lay off half of their staff while waiting for the original regulations around CEWS to come out. Then, with the additional delay, they were forced or very concerned about having to lay off more staff.

I was probably getting messages from our members, and some of those members daily, asking if the regulations were out yet on the wage subsidies so that they could apply. If you consider that our survey reports that 12% of businesses will not be able to last a month, three weeks of delay has a significant impact on those businesses.

Meegwetch.

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

Shannin, do you want to respond to the same question in terms of what you are hearing through NACCA?

[Shannin Metatawabin]

Thank you for the question.

I think Tabatha covered a lot of the concerns we had initially. A majority of the businesses that we support are sole proprietors. A lot of them weren't eligible for the wage subsidy portion through the business, so they have been waiting for this support for their business.

We're two months off, and I just signed the agreement on Tuesday. We're going to start to launch it within the next couple of weeks. We are well behind, so for the 12% that will be out of business within a month, we are well beyond that. We're going to be playing a lot of catch-up, and we really need to make sure that this gets launched.

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

Thank you.

I had the opportunity to speak to one of the directors of one of the AFIs just in the last couple of days. He told me that he never opened up the portal to take applications because of the delay, until he knew that it was going to advance to a point such that he could actually be providing some results. He opened up his portal on Tuesday, and in a small northern remote community like mine he had over $400,000 of applications ready by yesterday. He still hasn't signed an agreement. He still hasn't seen any money. He's still expecting it to be some weeks away.

Is there some assurance that you know of through NACCA and one of your associate AFIs? Are we assured that this is finally going to happen in the next couple of weeks? My understanding is that there hasn't been a dollar of this $306 million that has flowed yet. Are we pretty comfortable that this is going to happen in at least the next couple of weeks and limit this to a delay of two or two and a half months?

[Shannin Metatawabin]

I certainly hope so. I just signed the agreement on Tuesday. I fully expected to sign it a few weeks ago. I was assured that it was going to go a lot quicker, but I suppose that for a program that was announced and then launched it's the quickest that it has ever been done. That is what I'm told.

We're just going to do our best to ensure that we already have our agreements ready with our own AFIs, so that as soon as we get the money in our bank, we can begin to process it and get it to the AFIs, which are already collecting applications from their clients. We're going to do the best we can.

[The Chair, Liberal, Bob Bratina]

That's just about your time. You have five seconds, Gary.

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

I'll pass on that five seconds, Chair.

[The Chair, Liberal, Bob Bratina]

Okay. Thank you.

Ms. Damoff, please go ahead for five minutes.

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

Thank you, Chair. I think I have six minutes.

[The Chair, Liberal, Bob Bratina]

You do.

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

Thank you to all our witnesses.

I'd like to start by acknowledging that I'm joining the meeting today from the traditional territory of the Mississaugas of the Credit First Nation. I want to thank all the witnesses for your testimony, especially for the research that you have been doing and are able to provide to our committee.

Tabatha, I'm going to start with you, because you've provided us with some great statistics. I met with you in February, and I know that you have robust research and have for many years. One of the things we talked about was procurement. I know that the minister's mandate letter calls for 5% procurement, and if I remember correctly, you said that indigenous businesses could actually provide 23% to 25% of the requirements of the federal government. When I hear you say that you've provided lists to the government related to COVID and none have been given contracts, it's very concerning, and I do give you a commitment to follow up on that.

How many businesses have you actually provided to the federal government in the hopes of them getting a contract related to COVID?

[Tabatha Bull]

Thank you, Pam.

Originally when COVID started and we all started working from home, our initial action was to look through our certified aboriginal businesses and look to who could provide PPE immediately. That's about 20 of our members. Then we went to our members and asked who would be able to pivot to manufacture PPE or face shields. We had quite a few members who were interested in doing that. Not unlike other independent businesses, they were concerned about putting in any type of investment without having a contract. That was probably another 20 to 25 just of our members.

As the task force and all of our organizations, NACCA included, we have gone out to all of our members and asked if they could provide PPE. It was about 12% of the respondents from the survey. If you think about it, the number of respondents to the survey was just shy of 900, and that's a significant number just for people who responded, but if you think about the close to 60,000 indigenous businesses across Canada, 12% of that is a significant number.

We have been providing those lists to various departments and also working with some individual members to try to connect them. It's definitely been a frustrating process.

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

Thank you for that.

You've been appointed to the COVID advisory committee for procurement. Do you think that will give you an opportunity? I think it was a really good appointment. Besides the fact that you're an incredibly accomplished woman who will provide terrific input, having an indigenous business voice on that committee is critical. Do you think that will be helpful in trying to advance some of the concerns and the wishes of indigenous businesses across the country?

[Tabatha Bull]

Yes. I'm very pleased for CCAB and for indigenous business to have indigenous representation on that supply council. We've had two meetings to date. I would say that we are already making some progress in some of the discussion around connecting buyers to sellers in corporate Canada. By being there, we're able to make sure that we're going to be able to connect those buyers to indigenous businesses, both our members and other organizations' members.

Out of that, I raised the same issue at that supply council with Minister Anand. They did follow up and ask specifically for the list, so I do think we're making progress.

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

That's great. Thank you for all you're doing. If you have any research that you want to provide to the committee in writing with some of those stats that you've quoted to us—I know you do surveys on a regular basis with your membership—that would be helpful.

Sébastien, I'm going to turn to you.

On April 14, the government provided $17.3 million to northern airlines. Obviously all airlines were impacted by COVID-19, but we recognize the unique relationship that airlines serving the north provide. The money was provided through the governments of Yukon, Northwest Territories and Nunavut.

Have you been able to make use of that money, and has it been helpful for the airlines to continue to do the critical work and services they provide?

[Sébastien Michel]

At this time, I know they didn't profit from that money, being from Quebec. That money was provided to the Yukon, Northwest Territories and Nunavut.

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

Yes.