[Witness spoke in Cree]
[English]
My name is Shannin Metatawabin. I am the chief executive officer of the National Aboriginal Capital Corporations Association. I am also a member of the Fort Albany First Nation of the Mushkegowuk territory.
I would like to thank you for the invitation to speak today. Before I start, I would like to acknowledge that we are on the unceded and unsurrendered Anishinabe Algonquin territory.
The National Aboriginal Capital Corporations Association is the representative organization of over 50 indigenous financial institutions that provide developmental lending to hundreds of first nation, Inuit and Métis businesses across Canada.
Indigenous businesses both on and off reserve face many challenges in accessing financing for starting new businesses, but the greatest impediment is the lack of a modern on-reserve land regime that recognizes first nations jurisdiction.
In Canada, as in most of the developed world, a secure land base is the foundation of economic development. Land provides equity to allow access to financing for investment and entrepreneurship, a taxation base to promote community development and a critical input for the development of business opportunities in a range of sectors, including natural resource extraction. The World Bank estimates that real property represents between one half and three-quarters of the wealth of most economies. When governed through effective management and regulatory regimes, land is a primary driver of economic growth.
The national indigenous economic strategy, the first entirely indigenous-led strategy for economic prosperity, identifies many of the challenges in maximizing land for economic development purposes: the high cost of business due to the cumbersome land management provisions of the Indian Act; restrictions on the sale and use of reserve land; and limitations on the use of reserve land for collateral.
I will leave the strategy with the committee so you can use it. The strategy includes a comprehensive series of recommendations regarding land sovereignty, land management and environmental stewardship. I invite your committee to reference this important document in your study.
Indigenous financial institutions have proved to be an important vehicle to overcome these challenges by providing financing to indigenous businesses that would not otherwise have access to mainstream lending. The indigenous financial institutions are an incredible success story.
During a 30-year partnership with the Government of Canada and, since 2014, delivering the aboriginal entrepreneurship program, indigenous financial institutions, with the help of modest federal subsidies, have provided over 52,000 loans, totalling $3.2 billion in lending to first nation-, Inuit- and Métis-owned businesses. Each year, indigenous financial institutions make between $115 million to $125 million in loans, supporting about 1,500 businesses.
Indigenous businesses are a key driver of employment, wealth creation and better socio-economic outcomes for indigenous communities. Every loan provides 3.34 jobs, increases life satisfaction by 72% and increases mental health by 52% and health indicators by 19.9%.
However, since the 1980s, the economy and the nature of business have changed significantly. The number of indigenous small and medium-sized enterprises have been growing as a result of demographics and demonstrable success. The sizes of loans are increasing as a result of the growing businesses and expanding opportunities, yet the annual federal funding has not increased in almost 20 years, and inflation has reduced its value.
Current program resources do not allow indigenous financial institutions to respond to these factors. Forty per cent of indigenous financial institutions are fully loaned out, and there is insufficient capital to respond to the growing demands of indigenous businesses. The National Aboriginal Capital Corporations Association suggests that your standing committee take into account the challenges indigenous people face without proper land tenure and call for additional funding for indigenous financial institutions.
Specifically, NACCA has called for an additional $100 million annually of flexible funding to meet the increasing needs of the growing indigenous business sector. Additional funding would result in an increase of $620 million to Canada’s GDP and support 8,600 jobs, with resulting improvements in food security, mental health, health and housing.
During the last election, all major parties committed themselves to undertaking the important step of walking on the path to economic reconciliation. I am here to suggest to you that this reconciliation is not possible if indigenous people continue to be excluded from Canada’s economy and from sharing in Canada’s long history of prosperity. Indigenous nations want to end this systemic economic exclusion and be full partners in this confederation. This is what we mean by “economic reconciliation”.
Kitchi meegwetch.