COVID-19 Impact on Indigenous Businesses

Why is support for Indigenous business important during this time?

As the interview with Tabatha Bull states, there are over 50,000 Indigenous businesses in Canada. Since 99% are small- or medium-sized enterprises, COVID-19 has greatly impacted Indigenous businesses.

In addition to the challenges presented by the pandemic, many Indigenous businesses face further challenges with:

  • Poor digital infrastructure: Indigenous businesses based on reserve or in rural communities often lack digital capacity, such as: broadband internet or digital skills, commonplace in urban centres, making it more difficult for them to “pivot” online
  • Fewer financing options: funding for Indigenous businesses is unique – most business financing originates from individuals or community-based groups, NOT traditional lenders

In this post, we’ll explain why this is important and what you, as a conscientious consumer, can do to support Indigenous businesses.

Shop First Nations visits Kekuli Cafe in West Kelowna

COVID-19 Impacts on Indigenous Business

As with most businesses during these challenging times, COVID-19 has negatively affected the ability for Indigenous businesses to stay open and be profitable. With such a high percentage of Indigenous businesses being small- or medium-sized, they are more susceptible to prolonged shutdowns as the Canadian Federation of Independent Businesses released in a study that states “25% of small- and medium-sized enterprises will not be able to sustain a closure of 30 days.” Indigenous businesses in rural communities or ‘on-reserve’ face further challenges, such as: food scarcity, lack of clean water access, fewer health services, or even paved roads to better enable commerce. If such basic infrastructure is often lacking, then you can only imagine dealing with the lack of digital infrastructure.

Challenges Pivoting Online

As Windspeaker highlights in their article Indigenous communities behind the eight ball in pandemic digital era, our communities face unique challenges to ‘pivoting’ online. First, many rural communities lack broadband internet resulting in unequal access to the internet. This is due to the lack of urgency from large telecommunications companies and the complexities of intergovernmental jurisdictions. Furthermore, many IT systems haven’t been developed with Indigenous needs or values in mind. These factors (along with the shift to e-commerce) mean Indigenous communities are further behind compared as to how other Canadians are coping with the pandemic – switching to virtual medical appointments, remote learning, and video conferencing. One can only imagine that if you’re not able to get online or forced to interact with systems not aligned to your cultural values, one will find it more frustrating for Indigenous businesses to ‘pivot’ online in the new normal.

Financial Challenges

Not to be forgotten are the unique financial barriers Indigenous entrepreneurs face, largely due to the outdated Indian Act. As Tabatha Bull (CEO of CCAB) states in the article Indigenous businesses need support during pandemic crisis, “the biggest barrier for Indigenous businesses is access to financing and capital.” Due to the Indian Act, Indigenous peoples do not own reserve land (it’s owned by the crown); therefore, it is not a source of collateral as is often used by non-Indigenous entrepreneurs when financing a business through mainstream lenders. Instead, Indigenous entrepreneurs must pursue financing almost exclusively through personal savings or community-based lending. In terms of COVID relief, measures set out in the federal government’s initial COVID-19 Economic Response Plan, providing financial institutions with billions for small and medium-sized businesses, effectively left Indigenous entrepreneurs out in the cold.

What’s Happening Now

Since many of the above challenges existed and were systemic prior to COVID-19, they are still present and made worse by the pandemic. Financially, Ottawa has followed up with additional funding to support Indigenous enterprises, but CCAB estimates that still only helps around 6,000 businesses. In some instances, corporate Canada is providing help: UPS is providing a 50% discount for CCAB membersShopify partnered with Indigenous organizations, and Webnames is offering 1-year free of their LiteSite package to Indigenous small businesses & freelancers.

Nonetheless, Indigenous entrepreneurs persevere through their spirit, innovation, and resilience! Several success stories have emerged during the pandemic:

  • Winnipeg’s Exchange PPE was launched to distribute PPE
  • Yukon First Nations Culture and Tourism Association (YFNCT) launched the YFN Arts Shop to help Indigenous artists who have lost opportunities due to the coronavirus
  • New Westminster’s Sisters Sage won the Pow Wow Pitch as 2020’s top emerging Indigenous entrepreneur
  • Abbotsford’s Raven’s Brewing developed a hand sanitizer (see our visit below!)

What This Means for You

As the COVID-19 pandemic continues, it’s important all consumers support the small businesses that drive Canada’s economy and, more importantly for Indigenous businesses, drive socio-economic benefits for our communities. There are many actions you, the conscientious consumer, can take to help.

Not only will these actions help during the current economic slowdown but your actions will be contributing to Business Reconciliation as called out in the Truth and Reconciliation Commission’s Calls to Action!

How You Can Support Indigenous Businesses

Whether you’re new to Canada, non-Indigenous, or Indigenous, there are many actions you can take now to show your support for Indigenous businesses impacted by COVID-19:

  • Purchase their goods and services (online if possible or call ahead to ensure a Covid-safe visit in-person)
  • Amplify their social media posts
  • If you own a business yourself, add an Indigenous business to your supply chain to source PPE, artists for corporate gifts, or a caterer for your next company lunch
  • Contact your MP to petition the federal government to honour its 5% procurement ‘target’ for Indigenous businesses (worthy of an entirely separate blog/rant on its own!)

Closing Thoughts

Given Indigenous businesses are more greatly impacted by the pandemic due to largely being small/medium-sized enterprises, inequitable access in the digital economy, and having fewer financial options, we believe it is important to show support for Indigenous businesses during these times and hope you will join us.

Please support an Indigenous business in your community – and stay safe, stay healthy, and take care of your loved ones.

All our relations.

Support Indigenous Businesses

Find an Indigenous business near you to support!

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