Business and Reconciliation

Current Reality

April 18, 2020 – Federal Government announced up to $306.8 million in funding to help small and medium-sized Indigenous businesses, and to support Aboriginal Financial Institutions that offer financing to these businesses. The funding will allow for short-term, interest-free loans and non-repayable contributions through Aboriginal Financial Institutions, which offer financing and business support services to First Nations, Inuit, and Métis businesses. These measures will help 6,000 Indigenous-owned businesses get through these difficult times.

The government also announced top-up funding on June 11, 2020 of $138M as follows:

  • $117 million will reach more community-owned First Nation, Inuit and Métis businesses including microbusinesses, who are not eligible for existing business support measures. Indigenous communities rely on these businesses to provide revenue for important services, and to create meaningful jobs.
  • a new stimulus development fund that will provide $16 million to support the Indigenous tourism industry. The Indigenous Tourism Association of Canada will administer the fund to businesses across the country that have lost revenue due to COVID-19.

The above follows on a Canadian Council of Aboriginal Business (CCAB) research study released on March 25, 2020 that “confirms Indigenous SMEs are the most vulnerable” to the impact of COVID-19. The research identified the “lack of access to financing as a major barrier to business development and growth. Other barriers include:

  • Remoteness
  • Lack of adequate infrastructure
  • Unreliable internet access
  • Lack of credit history
  • Limited personal net worth
  • Impediments to business development imposed by the Indian Act

The CCAB along with the Aboriginal Financial Officers Association (AFAO), Council for the Advancement of Native Development Officers (CANDO), Indigenous Works, National Aboriginal Capital Corporations Association (NACCA) and National Aboriginal Trust Officers Association (NATOA) “sent a letter to the prime Minister, key ministers and the cabinet committee on CIVID-19 to urge policy that considers targeted liquidity and bridge financing for Aboriginal businesses, specifically SMEs.”

Dec. 13, 2020 – Government of Canada commits to increase procurement spend with Indigenous business partners to 5% through mandate letter of Anita Anand, Minister of Public Services and Procurement

Overall, if the gap in opportunities for Indigenous communities across Canada were closed, it would result in an increase in GDP of $27.7 billion annually or a boost of about 1.5% to Canada’s economy.

The survey divides corporate Canada into four broad groups:

  • Disengaged Majority = have not prioritized engagement in any way
  • Engagement Novices: initial stages of understanding value of engagement
  • Relationship Developers: appreciate value of ling-term partnerships
  • Committed Partners: demonstrate capacities to sustain partnerships and create positive outcomes
Call to Action #92Adopt UNDRIP as reconciliation framework

Current and Ongoing Problems

Recommendation # 13 from Commission of Inquiry into Muskrat Falls Project find government did not act fairly in its consultations related to Indigenous people and environmental matters

July 29, 2020: NationTalk – Dwight Ball, Premier of Newfoundland and Labrador provided an update on the progress of recommendations from the Commission of Inquiry into the Muskrat Falls Project. The final report was released to the public on March 10, 2020. Government has accepted the goals and objectives of all the recommendations in the commission’s report. Government established a deputy ministers’ steering committee to oversee the implementation of all the recommendations including the 17 key and ancillary recommendations outlined in Volume 1.

Key Finding # 13 PROGRESS: Executive Council developing a Terms of Reference and engaging a consultant. Timeline: Short Term – Up to 6 months.

Key Finding # 13 of the Muskrat Falls Final Report issued on Mar. 10, 2020 stated: GNL failed to ensure that it and Nalcor acted fairly in its consultations related to Indigenous Peoples and environmental matters. While not speaking to GNL’s legal obligation regarding consultation with the Indigenous groups in Labrador, GNL did not act appropriately from a fairness perspective with the Nunatsiavut Government, the NunatuKavut Community Council and the Innu of Ekuanitshit. GNL and Nalcor created an environment of mistrust and suspicion by not allowing all of the Indigenous Peoples and other concerned citizens to engage in a meaningful and transparent consultation process. This mistrust and suspicion led to protests that caused Project delays and significant cost overruns

.https://www.gov.nl.ca/nr/files/MFI-Progress-Backgrounder.pdf

Negative impacts on Indigenous health through the suspension of environmental monitoring by the Alberta Energy Regulator

In March, the Canadian Association of Petroleum Producers requested that the federal government relax several regulatory and policy activities, including an indefinite suspension of all consultation with industry to develop new environmental policies. At the same time, industry has lobbied the provincial government to resume consultation with Indigenous communities to advance projects despite the closure of our communities due to COVID-19 pandemic responses.

June 5, 2020 – Three First Nations in northeast Alberta – Athabasca Chipewyan First Nation, Fort McKay First Nation and Mikisew Cree First Nation have jointly filed an appeal related to recent Alberta Energy Regulator (AER) decisions to suspend key aspects of environmental monitoring in the oil sands. The First Nations were not consulted on decisions that clearly impact Alberta Energy Regulator’s (AER) ability to identify and mitigate these impacts in traditional territories. The latest exemptions specifically relieve operators of the following:

  • Monitoring most ground and surface water, unless it enters the environment
  • almost all wildlife and bird monitoring is suspended
  • Air-quality programs, including one for the First Nations community of Fort McKay, have been reduced, along with many other conditions of the companies’ licences
  • Testing for leaks of methane, a powerful greenhouse gas, has been suspended
  • Wetlands monitoring and research is gone until further notice
  • Water that escapes from storm ponds no longer must be tested

“A significant part of our concern is the lack of due process. Industry should not be able to petition its own regulator to relax approval conditions with virtually no oversight. This industry needs to maintain its pursuit of ethical oil. This is not how you do it,” stated Archie Waquan, Chief of the Mikisew Cree First Nation.

“The decisions to suspend environmental monitoring were made unilaterally. We were not notified—in fact, we would have had no idea this had occurred if it had not been revealed in the press,” stated Mel Grandjamb, Chief of Fort McKay First Nation. Consultation would have enabled us to inform the regulator how its monitoring decisions impact our Nations. Both we and the industry would have been better served by the clarity that consultation would have contributed to these decisions.”

In the days leading up to these decisions, our representatives sat AER, government and industry representatives to provide oversight to environmental monitoring programs under the Oil Sands Monitoring Program. The fact AER did not mention once it was considering suspending monitoring, some of which may overlap with program work, is very disappointing. This neglect does not encourage reconciliation.

June 23. 2020 – All temporarily suspended reporting and monitoring requirements will come back into effect on July 15, 2020. The Alberta Energy Regulator’s (AER) decision to end its temporary suspensions follows steps taken by the Government of Alberta, including the repeal of Ministerial Order 219/2020 and Ministerial Order 17/2020.

http://nationtalk.ca/story/aer-temporarily-suspended-requirements-to-resume-july-15

Government of Ontario using COVID-19 to restrict consultation on development of Ring of Fire mining operations

May 22, 2020: Policy options – “Pandemic shouldn’t impede meaningful Indigenous engagement on Ring of Fire”. Ontario government announced that “a regional assessment of potential mining operations for the Ring of Fire will be undertaken”. The announcement only posted on the agency website severely impacts the ability of First Nations to meaningfully engage in the consulting process. Only those registered on the email distribution received the email notification that:

  • Agency suspended all face-to-face meetings
  • Cancelled all engagement activities
  • Agency will continue to develop a regional assessment and plan with a much more constrained engagement

As evidence demonstrates, inadequate internet access and a lack of cellular networks access to remote regions in Northern Ontario put First Nations at a greater disadvantage in efforts to participate at a distance during the global pandemic.  For remote First Nations in Northern Ontario, the agency must work harder to ensure that the voices of communities implicated in the Ring of Fire regional assessment are not further silenced by the ongoing COVID-19 pandemic. Vague statements such as the one released to the email distribution list do little to provide implicated communities, organizations, and individuals the clarity required to adequately adjust and prepare for consultation opportunities once the threat of COVID-19 subsides. In the meantime, it is imperative that First Nation community members and leadership, scholars, activists, policy-makers, consultants and other groups interested in Ontario’s Ring of Fire remain as vigilant as possible during COVID in monitoring developments in the region and ensuring major decisions are not made without critical thought or meaningful Indigenous and public engagement.

Big-5 Canadian Banks continuing to finance oil and gas exploration in the Arctic including the Arctic National Wildlife Refuge

April 30, 2020 – Despite movement by the majority of major U.S. banks – five of the top 6 – there has yet to be similar action from their Canadian peers to rule out financing new oil and gas exploration and development in the Arctic, including the Arctic National Wildlife Refuge (Arctic Refuge). In December, 2019, representatives of Vuntut Gwitchin Government (VGG) and Gwich’in Tribal Council (GTC) were joined by representatives of the Yukon Chapter of the Canadian Parks and Wilderness Society on a trip to Toronto to meet with representatives of major Canadian banks to discuss the importance of the Coastal Plain of the Arctic Refuge and the role that banks can play in ensuring its protection.

VGG and GTC continue to regularly correspond with representatives from each of these banks and provide updates as it relates to the U.S. administration’s progression towards a lease sale, the continued unfavourable financial and social outlook of such a lease sale and the actions of their U.S. peers. Through these meetings and continued correspondence, Canadian banks have been provided a clear understanding of the immense human and environmental impacts and financial risks associated with oil and gas exploration or development in the Arctic Refuge.

VGG and GTC remain hopeful that Canadian banks will step up and acknowledge that the sacred land of the Gwich’in Nation is no place for drilling by updating their policies to refuse financing oil and gas exploration and development in the Arctic Refuge. Such an action would be greatly celebrated by the Gwich’in Nation and millions of supporters across Canada and the United States.

Unilateral decision by Quebec Government to re-open mining operations in northern Quebec without consulting the Inuit

Apr. 20, 2020 – Makivik Corporation, who represent the Inuit of Nunavik, is strongly opposed to the resumption of mining activities in the Nunavik region. The decision was made unilaterally by the government of Quebec without consultation whatsoever with the Inuit and was further supported by a directive issued by the Nunavik’s Director of Public Health, and Nunavik’s Director of Civil Security to partially lift the travel ban to Nunavik for the purpose of the reopening of the mining sites. Inuit account for the vast majority of the population in Nunavik and need to have a say on major regional issues such as this one. Miners started returning to the region yesterday.

“Makivik will not entertain the opening of any mines at this time in Nunavik. This is very dangerous. The Inuit elected officials in the communities and in the different regional organizations need to be heard and need to make the decisions and call the shots. Nunavik cannot and will not be governed by civil servants who may be tempted to use the pandemic to empower themselves” says Makivik President Charlie Watt. “We have written numerous letters to Quebec on different issues related to the pandemic and they have not responded…not even an acknowledgement of receipt.” As the signatory to the James Bay and Northern Quebec Agreement (JBNQA) and the Raglan and Nunavik Nickel Agreement, Makivik Corporation is the political representative of the Inuit of Nunavik, and this is without question. Quebec can’t ignore Makivik and has to fully respect the spirit and intent of the JBNQA. The Inuit can’t accept to go through another bad episode of colonialism in 2020.

Less than 1% (0.32%) of annual federal procurement spending since 1996 is sourced from Indigenous business.

The Procurement Strategy for Aboriginal Business (PSAB) has accounted for an average of less than 1% (0.32%) of total annual federal procurement spending since 1996.

Canadian Council of Aboriginal Business released “Industry and Inclusion: An Analysis of Indigenous Potential in Federal Supply Chains”calling on the federal government to increase the dollar value of its procurement spending with Aboriginal businesses to 5% of total procurement spending by 2024. The report found there is surplus Aboriginal business capacity to meet the needs of government and that a 5% target, which reflects the Indigenous population in Canada, is “realistic and achievable.”

As noted above, on Dec. 13, 2020, the Government of Canada committed to increasing their procurement spend with Indigenous business partners to 5%.

CCAB Industry and Inclusion Recommendations

  • Set a government-wide Indigenous procurement target of 5% within five years, through a 1 percentage point increase annually. Each federal department and agency should lay out a strategy to achieve this target and report annually on progress
  • Require that all departments incorporate considerations of Indigenous peoples (business and community) analogous to the requirements for gender-based analysis for submissions to Treasury Board
  • Develop additional programs to support existing Aboriginal suppliers in department purchase categories where there is currently insufficient Aboriginal business capacity to supply
  • Conduct additional research to identify key barriers to Indigenous business participation in federal supply chains, both from the perspective of Aboriginal business and government procurement officers
Government of Ontario repeal of the “Far North Act”

Apr. 17, 2019 – Repeal of the “Far North Act“ to reduce restrictions on projects like all-season roads, electrical transmission projects and development of the Ring of Fire “doesn’t do enough to protect the rights of First Nations and will likely lead to “renewed conflict” with Indigenous communities, according to Dayna Scott, an associate professor at Osgoode Hall and a co-director of the law school’s environmental justice and sustainability clinic.

Scott states, “What the government is proposing to replace it with — largely the Public Lands Act — is “even worse in terms of giving communities the power to make decisions about land uses in their territories.” “For Industry and government, our Indigenous laws, title and rights are just more red tape.” “Repeal your laws but respect our laws”, Kitchenuhmaykoosib Inninuwug (K.I.) Chief Donny Morris

Legislative and Regulatory barriers in the Indian Act restrict access to capital

Restricted access to capital impedes indigenous entrepreneurs from developing business opportunities. Some First Nations have unlocked greater economic development on reserve lands by opting out of the Indian Act system of lands management in favour of the First Nations Land Management Act. Those First Nations operating within the regime have witnessed a dramatic increase in new businesses, internal investment, and employment opportunities on reserve. These communities also use their revenues to invest back into the community, which in turn strengthens education and employment outcomes and reduces dependence on social programs.

Evening the Odds: Giving Indigenous ventures access to the full financial toolkit”. Dominique Collin and Michael L. Rice  McDonald-Laurier Institute. (The authors of this document have worked independently and are solely responsible for the views presented here. The opinions are not necessarily those of the Macdonald-Laurier Institute, its Directors or Supporters.) Continue to expand investments in and support for Aboriginal Financial Institutions (AFIs);Make a substantive effort to renew the fiscal relationship and to make fiscal fairness and affordable borrowing a reality for Indigenous peoples and communities.

This includes addressing current legal and regulatory barriers to accessing capital. Indian Act restrictions on land ownership and restrictions on accessing the funds in Indigenous trusts are areas for reform. New and alternative lending options are needed;Indian and Northern Affairs Canada should continue to work with Indigenous peoples, nations and governments to expand investments in communities and to enhance the investment climate. Future economic development programming should emulate the approach that led to the creation of the Native Economic Development Program (NEDP) in the mid-1980s.

An area of particular concern is a requirement for community guarantees for private home ownership, a liability no other local order of government in Canada could shoulder alone. These requirements result in individuals’ access to housing being contingent on the financial health and fortune of their community.Enhance the relevance, quality and availability of information to Indigenous households, businesses and communities through a commitment to transparency and openness, as well as supporting Indigenous-led research and data governance. http://macdonaldlaurier.ca/files/pdf/MLI_IndigenousCapital_F.pdf

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