Indigenous and Northern Affairs Committee on Feb. 8th, 2022

[Jean-Denis Garon, Bloc, Mirabel, QC]

The question is for Grand Chief Teegee.

[The Chair, Liberal, Marc Garneau]

Did you get that translation?

[Regional Chief Terry Teegee]

Yes, I got part of it. I'll do my best.

I'm a regional chief, not a grand chief.

As part of section 35 of the Indian Act, and also with the new act—the declaration of rights of indigenous peoples, Bill C-15, which was passed federally—I think it's important to share some of the issues we have here in British Columbia.

We're going on two years since the Declaration on the RIghts of Indigenous Peoples was passed as law provincially in British Columbia. As I stated in the legislature at the time when we passed the act two years ago, DRIPA is really, as my colleagues have stated, a human rights recognition. It's much more than just an act. It really recognizes our human rights, our sovereignty and our self-determination.

I've stated there how it's related to such initiatives or laws, environmental assessments and major projects, and is a big economic driver in this country. Much of Canada and British Columbia is driven by natural resources, whether we like it or not. There needs to be space. This is related to free, prior and informed consent.

I believe what you alluded to is the uncertainty of perhaps how decisions are made. The free, prior and informed consent in our determination, in first nations' perspective, allows for more certainty. If major companies are proposing these major infrastructure projects or anything of that nature, we need the space for all levels of government, including provincial, federal and indigenous governments together, so that the decisions can be made together.

If there is a blessing of going ahead, there's nothing that gives more certainty than if all levels of government say yes or no to a project. That's really important in terms of the new law, which is the declaration of the rights of indigenous peoples.

[Jean-Denis Garon, Bloc, Mirabel, QC]

My second question goes to Mr. Morse.

Last week, the committee dealt with the First Nations Fiscal Management Act in its work. Currently, there is no such act for—

[Lori Idlout, NDP, Nunavut, NU]

I'm sorry to interrupt, but the English is not coming through.

[The Chair, Liberal, Marc Garneau]

Let's suspend for a second. In the committee room, Madam Clerk, we're not hearing the English from Mr. Garon.

[The Clerk]

I'm getting the thumbs-up now, Mr. Chair.

We can try to proceed.

[The Chair, Liberal, Marc Garneau]

Okay.

Let's start again.

Go ahead, Mr. Garon.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Last week, the committee dealt with the First Nations Fiscal Management Act in its work.

I asked Mr. Morse whether an act of that kind or an equivalent would be helpful for Métis communities.

I'd like to hear his opinion on it.

[Steven Morse]

Generally, as I was mentioning earlier, I think one of the issues that the Métis face as opposed to first nations and Inuit is the lack of institutions and the lack of access to current programming—not even future programming.

We don't have an equivalent to the First Nations Finance Authority. I understand that FNFMB supports the work of the FNFA. When you look at how FNFA can assist economic development, one could look at the Clearwater deal with the Mi'kmaq on the east coast, which allows them to generate a great deal of capital to participate in a major project. The Métis do not have access to those sources of capital, so they could not have participated in the same way.

Anything that can be co-developed that would provide access to promote Métis participation in major projects [Technical difficulty—Editor] would be required, and it would be very welcome. I think there is a great deal of institutional development that needs to be done on the Métis side to provide critical access to the programming and institutions that are available to the other indigenous peoples but not to the the Métis.

[The Chair, Liberal, Marc Garneau]

Thank you.

Mr. Garon, you still have about 25 seconds left.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Mr. Chair.

I would like to go back to Grand Chief Teegee.

What would be the best solutions to encourage entrepreneurship among First Nations and to promote the entrepreneurial spirit?

What more could we do at the moment?

[Regional Chief Terry Teegee]

I think the federal government could certainly offer some more resources and funding to operate. Many first nations out there do have ideas in terms of investment. You have Carol Anne Hilton at Indigenomics raising a vast amount of funds to see more economic development in first nations communities.

Out here in British Columbia, I do work with the chiefs community on economic development. We have many ideas. Out here in B.C., I hold the co-chair of an initiative that looks at economic development from a first nations lens. It's called the Black Book series. Now we're trying to develop an institute to support first nations.

It's those types of initiatives that really support entrepreneurship and allow our first nations to think about their future ideas about economic development.

[The Chair, Liberal, Marc Garneau]

Thank you very much, Mr. Garon.

Ms. Idlout, you have six minutes.

[Lori Idlout, NDP, Nunavut, NU]

[Member spoke in Inuktitut, interpreted as follows:]

Thank you, Mr. Chairperson.

Firstly, welcome Steven Morse. I enjoyed your presentation. I told Okalik that you would be presenting here and she sends her regards.

I understand that we do not have the organizations and structures that you spoke of. The infrastructure needed doesn't exist in the aboriginal communities.

How has the COVID-19 pandemic affected economic development in first nations, Inuit and Métis communities? What additional supports have been put in place to address the impact of COVID-19 on economic development?

[English]

[Steven Morse]

Thank you very much, Ms. Idlout.

In terms of institutions and development, the impact of COVID-19 was interesting. One thing is that it affected indigenous businesses disproportionately.

If you look at the industries that Métis, in particular, are exposed to, Métis are 40% less likely to be in some industries, like finance, scientific and technical, than non-indigenous Canadians. When you look at tourism, they are far more likely to be in tourism. They are 400% more likely to be in oil and gas, mining and those industries—the primary industries.

In those are industries, you can't remotely log or you can't remotely mine, so the public restrictions hit them very hard. Tourism for Métis is quite often an export industry to the United States. Those were disproportionately affected.

Because Métis, first nations and Inuit don't have a great deal of equity to bring in, when they do finance a business start-up, they have a higher debt-to-equity ratio. When you then have a program like CEBA, which was delivered for the Métis through the Métis capital corporations, you're adding debt to a business that already had a weaker balance sheet because it had a higher debt-to-equity ratio.

The programming that may have been appropriate for non-indigenous businesses was not appropriate for Métis, first nations and Inuit businesses. It added stress to balance sheets that were already stressed in comparison to non-indigenous businesses. Having the same terms, they were just programs of general application sometimes delivered through indigenous organizations, but they did not consider the fundamental characteristics and barriers to economic development that indigenous businesses face. I understand they were done quickly, but they weren't particularly appropriate for the indigenous population.

Again, indigenous businesses were more heavily affected because they are in industries that were more heavily affected than non-indigenous. The effects have been fairly severe. The after-effects are going to be severe because you now have indigenous businesses with stressed balance sheets that will slow their opportunity to rebound from the economy. They may see higher degrees of business failure than you would in the non-indigenous businesses.

Again, the institutions that we support them with, such as the Métis capital corporations and the other AFIs, are relatively recent and somewhat weak.

The last point I will make is that, all of that set aside, in Ontario where I am, 60% of Métis businesses borrowed their emergency COVID funding from the Métis institution instead of from the bank. Even though every one of them had a banking relationship, 60% turned to the Métis Voyageur to provide that. That shows the centrality of Métis institutions in delivering programming and support to Métis entrepreneurs.

[Lori Idlout, NDP, Nunavut, NU]

[Member spoke in Inuktitut, interpreted as follows:]

I understand what you're saying. I wonder how the departmental organization actively works to redress colonial barriers to economic development. I ask this question in the context of barriers, such as the denial of the most basic needs of indigenous communities, such as human rights, water, sanitation, and accessible health care, which affects their health, and the capacity to pursue any further economic development.

[English]

[Steven Morse]

All answers to economic development have to take into account the other factors that impact it as well, including the fact that indigenous people have lower levels of wealth and income. That's a fundamental impact. Not all of those can be traced back to the root effect of colonialism, and its impact upon our communities.

One of the big drivers for economic development in the long-term is going to be education. There needs to be sufficient investment in first nations, Inuit and Métis education to help overcome the barriers to economic development. There needs to be assistance through institutions, such as the one that I run, so that once people are ready to get into business, they can overcome [Technical difficulty—Editor] and the lack of income in our communities, and still provide access to business opportunities.

Again, as you say, on day care, the number of Métis women entrepreneurs is fairly high, as far as we can see relative to the non-indigenous population. Without access to community day care, that's going to be an impediment.

There does have to be a more general understanding of the impediments and the barriers. All of them are, at their base, related to the relative lack of income and the lack of wealth that we find in our communities, and the lack of institutions to overcome that.

[The Chair, Liberal, Marc Garneau]

Thank you very much, Ms. Idlout.

That brings our round to an end.

I want to thank Regional Chief Teegee, and also Steven Morse. We very much appreciate the time you took today. We very much appreciate your remarks, as well as answering our questions.

That will bring this panel to an end.

We will suspend before we start the second panel.

[The Chair, Liberal, Marc Garneau]

Without any further ado, I would like to ask Ms. Bull to give her introductory remarks.

Ms. Bull, you have five minutes.

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

Meegwetch.

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

Hello. My name is Tabatha Bull, and I'm a member of Nipissing First Nation.

As president and CEO of Canadian Council for Aboriginal Business, CCAB, I want to thank you, Mr. Chair, and all distinguished members of the committee for the opportunity to provide you with my testimony and to contribute to this very important work.

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

Since 1984 CCAB has been committed to the full participation of indigenous peoples in the Canadian economy. Our work, programs and priorities are all backed by data-driven research. Before the COVID-19 pandemic, the indigenous economy was experiencing a period of sustained growth. Indigenous businesses made impressive gains in the areas of entrepreneurship and individual economic achievement despite the barriers that exist. At that time, there were over 50,000 self-employed indigenous people across Canada and over 250 indigenous economic development corporations. The last two years have been a difficult time for businesses across the country. We have seen barriers specific to indigenous businesses more starkly than ever before.

CCAB, with our partners at NACCA and NIEDB, undertook three COVID-19 indigenous business surveys supported by Indigenous Services Canada. We found that indigenous businesses continued to experience negative impacts due to the COVID-19 pandemic. Two-thirds said the COVID-19 pandemic had negatively impacted their business operation.

We acknowledge the work of the Government of Canada to introduce efforts to provide supports for businesses through the pandemic. A number of those supports required changes to ensure that indigenous businesses were included. While access was made available for most, we still see persistent barriers. Of the 66% of respondents who still indicate that they require financial assistance, almost two-thirds did not apply for any government support. A third did not apply because they believed they would not qualify, and nearly a quarter indicated that they did not know about what supports were available.

An increasing number of businesses report low credit ratings or limited cash savings as a barrier to accessing government supports. Businesses also indicated such obstacles as having a payroll of less than $20,000, insufficient short-term cash flow, lack of access and the requirement to have a CRA or business registration number.

When asked what skills and training indigenous businesses need, over half of the respondents selected support for grant and application proposal writing. CCAB has repeatedly highlighted the need for a navigator function specific to indigenous business to assist with the understanding and uptake of the various programs. We were pleased to see a navigator position indicated in Minister Hajdu's mandate letter. This will be critical, as indigenous businesses found navigating the bureaucracy, which often does not consider their unique legal and place-based circumstances, a significant barrier to accessing supports and business development programs.

I use these examples of COVID programming to provide specific illustrations of barriers, but these barriers exist across government. What is lacking and what we would like to see as a recommendation by this committee is a comprehensive federal government-wide strategy driven by indigenous peoples to support the [Technical difficulty—Editor]. An indigenous entrepreneurship strategy would make indigenous prosperity a priority for every federal department, agency and regulator, and provide the necessary down payment to support economic reconciliation.

Although we acknowledge the number of important renewed commitments on accelerating reconciliation, I would be remiss if I did not express our disappointment that there is rarely mention of efforts to support the economic empowerment of indigenous peoples [Technical difficulty—Editor] community for the government to signal to Canadians that indigenous prosperity matters.

The CCAB believes that an indigenous entrepreneurship strategy should include the following three key pillars: access to procurement and program opportunities, access to markets and supply chain networks, and access to funding.

With respect to procurement, CCAB, with other national indigenous organizations [Technical difficulty—Editor] the Government of Canada's 5% procurement target, a goal first proposed in CCAB's “Industry and Inclusion” report in 2019. Together, we have also provided a series of papers to the Government of Canada that outline practical solutions to increase procurement from indigenous business. We see eliminating the barriers to federal procurement, in addition to infrastructure set-asides for indigenous businesses and communities, as critical steps to indigenous economic development.

Through our “supply change” initiative, we have seen corporate Canada's spend with indigenous business far exceed that of the federal government's. It continues to outgrow the pace at which the federal government is moving. We are here to assist all federal partners to meet their indigenous procurement targets.

I would like to leave you with this point for consideration. Too often indigenous business concerns are an afterthought, resulting in indigenous organizations, like us and our friends at other national indigenous organizations, working to remedy programs and policies after the fact.

We are 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.

I welcome the opportunity to answer your questions.

Chi-meegwetch.

[The Chair, Liberal, Marc Garneau]

Thank you very much, Ms. Bull, for those very concise opening remarks.

Mr. Metatawabin, please proceed.

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

Thank you.

Good morning.

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

I would like to thank you for the invitation to speak today.

Before I start, I would like to acknowledge that I'm taking this call from the traditional territory of the Mi’kmaq nation.

The National Aboriginal Capital Corporations Association is a representative organization of over 50 aboriginal financial institutions, which provide developmental lending to hundreds of first nations, Inuit and Métis businesses across Canada. Aboriginal financial institutions are an incredible success story.

During a 30-year program partnership with the Government of Canada and since 2014 delivering the aboriginal entrepreneurship program, aboriginal financial institutions, with the help of modest federal subsidies, have provided over 50,000 loans totalling $3.3 billion to first nations, Inuit and Métis-owned businesses. Each year, aboriginal financial institutions make over $120 million in loans to indigenous-owned businesses. Aboriginal financial institutions have a current aggregate loan portfolio of $329 million.

Indigenous businesses are a key driver of employment, wealth creation and better socio-economic outcomes for indigenous communities and people. Every loan provides 3.34 jobs. Life satisfaction increases by 72%. Mental health is improved by 52%, and health by 19.9%

During the last election, all major parties committed themselves to undertaking the important work of walking the path to reconciliation. I'm here to suggest to you that reconciliation is not possible if indigenous people continue to be excluded from the Canadian economy and from sharing in Canada's long history of prosperity. Indigenous nations want to end the economic exclusion and be full partners in this Confederation. This is what we mean by economic reconciliation.

The National Aboriginal Capital Corporations Association is offering three recommendations that would contribute significantly to ending economic exclusion and could be important cornerstones to economic reconciliation. These recommendations build upon the already proven successful models of co-designed partnerships between indigenous people and Canada.

First, create an indigenous housing fund in partnership with aboriginal financial institutions.

The Government of Canada's pay-as-you-go approach to funding housing and infrastructure has long been criticized. It is inefficient. It defies proper planning. It has negative consequences for indigenous communities. It is time for a more functional life-cycle approach to financing housing and infrastructure.

Indigenous Affairs ministers from both Liberal and Conservative governments have conceded that real change is needed. NACCA proposes the creation of a $150-million indigenous housing fund from which aboriginal financial institutions could leverage financing for individual and community housing.

The indigenous housing fund would use the proven track record of the aboriginal financial institutions that provide indigenous lending right now, developmental lending. The indigenous housing fund would emulate the successful model of the recently created indigenous growth fund, which was structured by NACCA and the Business Development Bank of Canada, and connects private investors to indigenous businesses while relying on AFIs to deploy the capital based on their unique relationships with the communities we serve.

Second, the additional funding for the aboriginal entrepreneurship program, announced in budget 2021, must meet the current needs and be made permanent.

The COVID-19 pandemic has had significant impacts on indigenous communities and businesses, and these impacts have exacerbated the long-standing marginalization and economic exclusion of our people and communities.

The aboriginal entrepreneurship program directly supports indigenous-led businesses and helps indigenous communities generate wealth by improving access to capital and business opportunities.

Third, 10-year funding agreements to qualified indigenous institutions should be provided. The Government of Canada is now providing 10-year grants to first nations communities that meet eligibility requirements related to financial performance and governance.

Both Canada and first nations agree that there are significant benefits to these arrangements, including greater flexibility to design and deliver, greater flexibility to allocate, manage and use funding to better accommodate local needs and changing circumstances and priorities, and the ability to retain unspent funds and reduced administrative and reporting burden.

Such arrangements should also be available to indigenous institutions that have successful track records, strong financial performance and good governance. In the case of AFIs, this would allow for greater responsiveness to changing on-the-ground economic conditions and opportunities, and for long-term planning that would contribute to better program management and service delivery.

I would like to conclude with the following.

Aboriginal financial institutions have an enviable record supporting indigenous businesses across Canada. We are proud of our success and the 30-year partnership with the Government of Canada. Our success is a testament to the view that indigenous organizations are best placed to design and deliver programs and services to indigenous people.

We believe building on these recommendations and building on the success of the network aligns with your stated commitment to reconciliation.

Further to other witnesses' comments, I would like to reinforce that supporting indigenous economic development and institutions in Canada will serve to align with the spirit and intent of the United National Declaration on the Rights of Indigenous Peoples. More importantly, it will be an investment by Canada to create a sustainable indigenous economy and save Canada from the growing unsustainable trend and costs associated with government's responsibilities to indigenous communities.

Thank you.

[The Chair, Liberal, Marc Garneau]

Thank you, Mr. Metatawabin.

We'll now have a round of questions. We'll begin with the Conservatives.

Mr. Schmale, you have six minutes.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Chair, in an effort to keep you on your toes, I'm going to defer to Gary Vidal just for a quick second.