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Pandemic impact puts First Nation businesses at risk

Anishnawbe Business Professional Association calls for government stimulus package

First Nation business owners are taking the brunt of the economic impact of the COVID-19 crisis, and a Thunder Bay-based business advocacy group is calling for government aid to help keep them afloat.

Indigenous-owned small and medium-sized enterprises are more vulnerable and face a more challenging environment than their non-indigenous counterparts in surviving this global pandemic, said the Anishnawbe Business Professional Association (ABPA).

“Our First Nations leaders are aware that the risk and negative impact of the outbreak can be even greater for remote First Nations and the key players in the Northern economy and associated supply chains,” said ABPA president Jason Rasevych in a statement.

“Aggressive efforts must be taken across the public and private sector to limit the losses to jobs and incomes and support a swift recovery once the disruptions abate,” he said.

“We want to work with both levels of government to ensure that the Northern Ontario economy remains strong and our First Nation entrepreneurs can maintain operations through these challenging times.”

The National Aboriginal Capital Corporation Association estimates that more than 85 per cent of First Nation businesses have fewer than five employees, with 45 per cent being locating on a reserve.

ABPA board member and business owner Jason Thompson said working at home for First Nation entrepreneurs “becomes impossible” due to shortfalls in available bandwidth. It puts them at a “huge disadvantage in trying to survive.

Tax breaks, available to non-Indigenous businesses, are of no use to First Nation businesses operating under the Indian Act.

“What indigenous businesses need is flexible repayment terms, loan guarantees and bridge loan financing,” he added.

“Hopefully we can ride this wave, but we will need to see some sort of stimulus to survive.”

ABPA states that federal government measures won’t address the needs of those companies currently working on the East-West Tie transmission line or the Wataynikaneyap Power Project.

For starters, First Nation businesses already face considerable challenges even accessing financing from traditional lending institutions.

“Targeted government funding” will help mitigate these issues, the group said in a March 24 release.

Board member and Nishnawbe Aski Development Fund executive director Brian Davey said for many First Nation businesses, the only sources of working capital comes from retained earnings or services.

“With declining revenues and the cumulative impacts of the market and supply chain disruptions, it makes the pandemic worse than a financial crisis.

“There is potential for a complete stoppage of operations as few First Nation businesses are able to work remotely and without access to credit or cash to cover operations.”

In their release, ABPA are asking for the following measures to support First Nation business:

• Provide meaningful subsidies for First Nations businesses to cover wages and payroll.

• Provide funding for support services for First Nation self-employed individuals to access the emergency care benefit

• Provide loan guarantee programs for First Nation businesses participating in contracts for major resource development projects

• Provide bridge financing to First Nation businesses through established institutions such as NADF.

• Reduce interest rates and postpone any increase to taxes or non-essential changes to regulations that impact business.

• Extend deadlines for filing tax returns and other administrative reporting and defer any tax payments to allow full recovery.

• Provide funding support for Indigenous Institutes to assist with implementation of pandemic response plans for First Nations businesses.

• Provide direct funding for employees who are experiencing lay-offs due to the emergency.