Thank you, Mr. Chair; and thank you, members of the committee.
It's a real honour to be here, and certainly in the presence of my dear friend Dawn Madahbee Leach as well, and Adam. You did a great job.
I'll begin by giving you a bit of a background on Nunasi Corporation and then I'll speak to three barriers I see that continue to impede the growth of indigenous business and communities.
In terms of personal background, I am Inuk, Inuit from Labrador and it's an honour for me to lead Nunasi Corporation, which is a storied Inuit corporation, over the last two years. Nunasi is a Nunavut Inuit birthright corporation, owned by two regional Inuit associations and one Inuit regional development corporation. This structure ultimately means that Nunasi is owned by all the individual beneficiaries under the Nunavut agreement, one of whom I think is actually on this committee right now.
It has a very interesting story. In fact, it's the oldest Inuit development corporation in the country. It was started in 1976 by the Inuit Tapirisat of Canada, now ITK, as a vehicle to ensure Inuit participation in the economic opportunity that was expected once Inuit land claims were resolved. It was involved in a variety of different business activities from various industries and some of these operating companies are still around today—in particular, Nunasi's investment in the medical accommodations that are located in Ottawa, Winnipeg, Edmonton and Yellowknife. These facilities, known as “largas”, provide culturally appropriate and safe lodging for those Nunavummiut who require medical treatment in southern hospitals.
Nunasi today is focused on health services, to build on the success of those largas; energy, which includes a focus around the development in renewable energy for Nunavut; infrastructure; transportation; and federal procurement.
Now I'll share with you some of my thoughts on some of the barriers. One is access to equity capital. Indigenous and Inuit business look very different today than even just 20 years ago. The rights that are crystallized in modern land claim agreements, along with the recognition of indigenous rights through successful court challenges, have led to greater engagement of indigenous communities in development activities on traditional lands.
Phrases such as “the duty to consult” and “free, prior and informed consent” have become common parlance in some industries. Impact benefit agreements have created significant value for indigenous communities, including training, development and employment, along with procurement. Some projects are providing opportunities for indigenous communities and development corporations to actually participate in the ownership of the project or a major asset.
Too often, communities just don't have the financial capital to stand shoulder to shoulder with their partner. Traditional lenders generally do not provide loans for equity, so the community will have to either pass on the opportunity or receive support from the partner or another source at a price that is often considered expensive. I think there's a real opportunity for federal Crown corporations and other institutions to provide this capital through a loan mechanism at a reasonable rate. This would enable the community to participate in the opportunity and benefit from the financial upside earlier in the process.
On social procurement, on January 31 of this year, the federal government announced that Nasittuq, a majority-owned Inuit company, was successful in winning the contract for the operation and maintenance of the north warning system. This contract is valued at nearly $600 million for seven years, and if the extensions are awarded, the contract has the potential to be $1.3 billion. The Inuit shareholders of Nasittuq include Nunasi, as well as the regional development corporations across Inuit Nunangat. It's great news for Nunasi and our colleagues, and frankly, it's an example of economic reconciliation at work.
The federal government has made a commitment of 5% to help expand indigenous business, which would represent over $1 billion annually. While the commitment has been made, I strongly encourage the government to move quickly towards implementation and to use the distinctions-based approach to ensure Inuit businesses benefit.
I would also recommend that the federal government consider creating incentives for federally regulated companies to develop robust procurement policies for the benefit of indigenous business. As we've seen in this country, the more successful procurement processes are normally in those companies in the resources sector, which really makes sense when you consider the nature of their business, operating in traditional territories.
However, these best practices should extend to other companies in different industries. Indigenous businesses are diverse, and if given the opportunity, they will meet the procurement needs of these companies.
The last thing, Mr. Chair, I want to comment on is the investment in infrastructure.
In October of 2020, Nunavut Tunngavik Incorporated in Nunavut released the “Nunavut Infrastructure Gap Report”. The report highlights deficits in such infrastructure areas as water, housing, broadband, reliable energy and so on.
The community needs these basic elements of infrastructure to create an environment that is conducive to entrepreneurialism and that can attract investment. There were no cost estimates associated with the Nunavut report, but the most recent funding announcement by the federal government of $4.3 billion indigenous community infrastructure fund, from which Inuit received over $500 million, is certainly a step in the right direction.
However, a 2016 report by the Canadian Council for Public-Private Partnerships identified an infrastructure deficit for first nations only at $30 billion. Seven years later one can only assume that this number is also higher.
Just recently the Inuit Tapiriit Kanatami has calculated that it would take over $3 billion to meet Inuit core housing needs.
So, when you take into account the numbers on housing alone and you add the infrastructure deficit with the first nations, it's easy to assume that the infrastructure deficit for indigenous communities in general is probably closer to $60 billion to $70 billion.
If we want to break down barriers for indigenous economic development, we need to ensure that communities have the conditions that will create a well-functioning economy, and that starts with infrastructure.
Thank you for your time today. I look forward to your questions.