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COVID-19 causes major disruption in Northern Ontario business sector

First Nations economy and businesses hit hard as current pandemic is worse than the financial crisis.
Photo: Tube containing a swab sample that has tested positive for COVID-19/Shutterstock


THUNDER BAY -- The Anishnawbe Business Professional Association (ABPA) is calling on the federal and provincial government to put measures in place for First Nation businesses in Northern Ontario as COVID-19 becomes a rapidly evolving global challenge.

“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. 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. 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” stated Jason Rasevych, President of the ABPA.

In Canada the most vulnerable businesses are small medium enterprises (SMEs) who risk being the hardest hit if they are not prepared. The ABPA reports that due to the existing barriers for First Nations businesses and the acute impact of COVID-19 it puts Northern Ontario First Nation companies in a much more challenging environment than their non-indigenous counterparts.

“Working from home becomes impossible for remote First Nations businesses operating in the tourism sector especially those providing accommodations, food services or retailing goods. To add on to that, these businesses already have significant infrastructure shortfalls like saturated bandwidth for telecommunications and lack of essential services. It puts the indigenous entrepreneur at a huge disadvantage when trying to stay afloat. Many of the tax breaks that are being offered to non-indigenous business do not help First Nation businesses operating under the Indian Act. What indigenous businesses need is flexible repayment terms, loan guarantees and bridge loan financing. Hopefully we can ride this wave, but we will need to see some sort of stimulus to survive,” stated Jason Thompson, ABPA Board Member and owner of Superior Strategies.

The National Aboriginal Capital Corporation Association (NACCA) indicates that in Canada, over 85 per cent of First Nation businesses have less than five employees and the majority are in rural or remote communities, with 45 per cent being located on reserve. The Canadian Federation of Independent Businesses (CFID) has indicated that 25 per cent of SMEs will not survive a closure period of 30 days or longer without some level of stimulus support. This puts First Nations businesses at an even greater risk of impact from the COVID-19 pandemic. The ABPA states that measures announced by the Federal government to date will not address the needs of First Nation businesses that are operating in the East-West Tie Transmission Line build or the Wataynikaneyap Transmission Line Project.

“In our line of work we have noted that the only sources of working capital for First Nation businesses is retained earnings or savings, 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, “stated Brian Davey, ABPA Board Member and Executive Director of NADF.

Due to the obstacles to accessing financing, First Nations businesses also face considerable challenges to accessing the stimulus measures put in place by government for SMEs. In 2015, only 19 per cent of First Nation businesses accessed financing from traditional financial institutions.

The ABPA is hopeful that targeted government funding to Northern Ontario First Nations communities could help mitigate some of the issues, however much more support to First Nation business is required to ensure that the Northern Ontario economy can continue to grow and train and employ First Nations’ peoples to contribute to the overall economy.

The ABPA is requesting that the government consider the following measures be put in place to support Northern Ontario First Nation businesses:

1) Provide meaningful subsidies for First Nations businesses to cover wages and payroll.
2) Provide funding for support services for First Nation self-employed individuals to access the emergency care benefit.
3) Provide loan guarantee programs for First Nation businesses participating in contracts for major resource development projects.
4) Provide bridge financing to First Nation businesses through established institutions such as NADF.
5) Reduce interest rates and postpone any increase to taxes or non-essential changes to regulations that impact business.
6) Extend deadlines for filing tax returns and other administrative reporting and defer any tax payments to allow full recovery.
7) Provide funding support for Indigenous Institutes to assist with implementation of pandemic response plans for First Nations businesses.
8) Provide direct funding for employees who are experiencing lay-offs due to the emergency.

Since the beginning of the COVID-19 outbreak, the ABPA have been carefully monitoring the progression of the virus and closely following the advice of Canada’s public health authorities. The ABPA is following recommendations and to changes to professional development delivery to focus on the highest priority – the health and safety of members, and everyone in Canada.

About the ABPA
The Anishnawbe Business Professional Association is a non-profit, member-based organization with an office in Thunder Bay, Ontario. The ABPA serves the First Nation business community and expresses positions on business issues and other public issues relevant to First Nation business, on behalf of its members. The ABPA provides a forum for the First Nation business community to develop policies and programming which contribute to the socio-economic well-being and quality of life of First Nations peoples in Northern Ontario. The ABPA also serve non-First Nation businesses by providing information, guidance, and access to a wide-ranging network through events and sponsorship.

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