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Indigenous businesses hit hard, need support: APEC

The COVID-19 pandemic has made 2020 a tough year for many businesses, but for many Indigenous enterprises, it’s been even tougher, according to a new report by the Atlantic Provinces Economic Council.

When this year’s ledgers are totalled, Atlantic Indigenous businesses are expecting a 40 per cent drop in own-source revenues, APEC states in the report commissioned on behalf of the Atlantic Policy Congress of First Nations Chiefs Secretariat.

“This drop will result in a dramatic decline in community services,” said Fred Bergman, senior policy analyst at APEC, noting a second wave could further compound the issue.

The federal government doubled the Indigenous Community Support Fund, which covers preparedness measures to prevent the spread of COVID-19 and provides for mental health, educational, and other supports for Elders and vulnerable community members, to $610 million as part of its pandemic response measures. Bergman said it’s “a step in the right direction”, but APEC is calling for the fund to be doubled once more, a move that he added would still cover only 35 per cent of the anticipated fiscal shortfall for Atlantic First Nations.

“More than two out of five Atlantic First Nation businesses are expecting their revenues to drop by at least 50 per cent because of COVID-19,” said Bergman. “That’s a higher proportion than the 30 per cent for all Atlantic businesses.”

Prior to the pandemic, the Atlantic Indigenous economy was valued at $1.1 billion, with First Nations business sales of $1.6 billion in 2016, Bergman stated in the report.

The pandemic has resulted in lower revenues from fishing, gaming, retail, hospitality and tourism, he said.

“There are also modest declines in retail activity, due to lower fuel prices and less foot traffic,” said Bergman, adding that some gas bars experienced a 25 per cent drop in revenues.

Indigenous tourism in the province normally directly employs 829 people, according to the Indigenous Tourism Board of Canada.

Similarly, powwows, which are a central source of revenue for many artists, craftspeople and others were all cancelled.

In St. Mary’s First Nation, “while sales at the community grocery store initially climbed by 20 per cent at the beginning of the COVID-19 outbreak, the store had to pay more for cleaners, security, and personal protective equipment. It also paid employees a $2 per hour premium. However, sales soon diminished due to less foot traffic, resulting in a 10 per cent net loss,” said Bergman.

Many Indigenous businesses did not qualify for the Canada Emergency Wage Subsidy because they were tax-exempt and could not meet the burden of proof by CRA, said Bergman.

APEC is calling for broadening of the eligibility rules for the Canada Emergency Wage Subsidy to include all Indigenous businesses, said Bergman.

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“Indigenous businesses had a larger drop in revenues, more layoffs and a smaller proportion than non-Indigenous businesses will survive a year without support,” he said.
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