Meegwetch. Waciye.
Hi, my name is Shannin Metatawabin. I'm the CEO of the National Aboriginal Capital Corporations Association. I'm a member of the Fort Albany First Nation of the Mushkegowuk nation. Before I start, I wish to acknowledge that I am taking this call on the traditional territory of the Mi'kmaq nation.
Thank you for the invitation to speak today.
I'd like to address what support our financial network has been able to provide indigenous businesses, what challenges we have faced and what our clients need moving forward.
You might recall that I presented to you back in [Technical difficulty—Editor] aboriginal financial institutions. Our members are indigenous-owned and led organizations that provide developmental loans to hundreds of first nations, Inuit and Métis businesses every year.
In April 2020, our network received $306.8 million to support indigenous businesses impacted by the COVID-19 crisis. Of this total, $204 million was to support emergency loans to indigenous businesses. Our members were grateful for this relief funding.
To date, and despite the inequitable terms and conditions of the indigenous-specific programming compared with other federal measures, 37 AFIs have distributed over $60 million to 1,500 indigenous businesses across the country.
Our clients have told us that these loans, provided by the same indigenous institutions they have relied on in the past, are filling a gap. The loans fill this gap, but they do not provide what the network requested when the crisis first began. We had proposed a timely package tailored to indigenous businesses. To date, such a package has eluded us. We have met with obstacles in securing the indigenous-specific relief funding as equitable compared to non-indigenous ones.
These are my recommendations to address these issues.
The relief funding for indigenous businesses needs to come without delay. The federal government released the funding for the CEBA in early April, only a few weeks after the crisis hit. Due to delays in negotiating contribution agreements with ISC, our network could not offer relief until mid-June. These funds simply came too late for some first nations, Métis and Inuit businesses.
The timing issues persist with the second wave. On October 9, Canada announced further relief funding of $20,000 for businesses. By October 26, that funding was available to smaller businesses. Meanwhile, our network still awaits word on whether we can offer the same additional $20,000. At this rate, it will again be two months before we can offer this lifeline to our clients.
The larger portion of the relief package available to indigenous businesses needs to be non-repayable. We're talking a lot about that task force survey; 40% of them indicated that they could not take on any more debt. This is a big reason why we need to provide more non-repayable relief to indigenous businesses. On top of all the barriers that they currently face, they're going to have to work twice as hard to ensure that they repay a loan, so providing something similar to the Ontario program, which is fifty-fifty, would be better.
The terms and conditions of our relief package need to be equitable to other federal measures. Our members have been making loans for several months now. Early on, they noted certain discrepancies between the conditions attached to the indigenous-specific loans and other federal measures, particularly for rural businesses delivered by some regional development agencies and community futures development corporations.
Despite repeated requests from NACCA, the indigenous-specific measures are burdened with lower stacking limits and more-onerous lending terms than emergency loans provided to the CFDCs. Some of the members have been forced to turn away their own clients and refer them instead to the non-indigenous RDA or CFDC. This situation is demoralizing.
We request this committee's support. The restrictions enhance the ability of our government agency to extend relief to our clients at the expense of their own indigenous institutions. This situation is more troubling considering the mandate of Indigenous Services Canada to promote indigenous capacity and evolution.
Aboriginal financial institutions work tirelessly to develop solutions for, and with, indigenous people. We live and work in the community. At a disadvantage before COVID hit, indigenous businesses will need to work twice as hard than the average Canadian business to repay their loans. AFIs will work twice as hard at helping them get through this crisis. We're calling for a second phase of support that comes without delay, is indigenous led and is tailored to the specific needs of our community.
Thank you.