Good afternoon, everyone.
I'm sorry; there were votes.
This time of year you never know. We have to go to vote when we have to and sometimes it's at the last minute.
So we'll make use of the time we have.
We have about 45 minutes. We have to do a little bit of business for the drafting instruction and the subcommittee report. We'll see how the conversation goes.
Welcome and thank you very much for being here, Dr. Leach and Mr. Metatawabin.
We'll give you seven minutes for your opening remarks and then we'll go to the questions.
Mr. Metatawabin, you may begin.
. Good afternoon. My name is Shannin Metatawabin. I'm the chief executive officer of the National Aboriginal Capital Corporations Association. I'm also a member of the Fort Albany First Nation of the Mushkegowuk Nation in James Bay. I am joined today by my board chair, Andrew Leach, who is also the board chair for the Tale’awtxw Aboriginal Capital Corporation, TACC, and a member of the St’át’imc Nation.
I would like to thank you for the invitation to speak today regarding an important study on the support for indigenous Canadians in the agriculture and agri-food industry.
Before I get into my remarks, I'd like to acknowledge we are on the unceded territory of the Algonquin people.
The National Aboriginal Capital Corporations Association, commonly known as NACCA, is a representative organization of 59 aboriginal capital corporations or aboriginal financial institutions across Canada. They provide developmental lending to hundreds of indigenous entrepreneurs of first nations, Métis and Inuit heritage.
NACCA is also a program delivery partner with Indigenous Services Canada and administers the delivery of the aboriginal business financing program on behalf of the Government of Canada.
Aboriginal financial institutions are an incredible success story. During a 30-year program partnership with the government, aboriginal financial institutions, with the help of modest federal subsidies, have provided over 45,000 loans totalling $2.5 billion to first nations, Inuit and Métis owned businesses. Of special note, they started with $240 million and recycled it 11 times.
Each year, aboriginal financial institutions provide over $100 million in loans to 500 indigenous-owned start-ups and 750 existing businesses. Aboriginal financial institutions have a current aggregate loan portfolio of $329 million.
Indigenous businesses are a key driver of employment, wealth creation and better socio-economic outcomes for indigenous people in Canada.
Aboriginal financial institutions have also been very active in the indigenous agriculture and agri-food sector. In fact, five aboriginal financial institutions were capitalized specifically to support this business sector alone.
In 2017-18, 8.9% of the businesses that received a loan from our network were in the agricultural sector. This has accounted for about $3 million in lending activity and delivers broad socio-economic results.
The committee has heard from previous witnesses about the many challenges and opportunities associated with indigenous participation in the agriculture and agri-food sector. You heard about what is perhaps the most profound challenge: food security in indigenous communities, particularly in remote communities. This is a national crisis and must be addressed.
The committee has also heard about the growing opportunities in indigenous agriculture and agri-food. Chief Byron Louis described many indigenous success stories in farming, agriculture and other sectors. The committee has also heard about many of the unique challenges facing indigenous agriculture and agri-food: Indian Act impediments, land tenure on reserve, remoteness, poor socio-economic conditions and low rates of educational achievement, among others.
Many of these challenges contribute to what I would argue is the greatest impediment to growing this sector: access to capital. Conventional lenders and investors are not willing, or are unable, to provide the capital needed to finance businesses in indigenous communities. It is our view that the success of NACCA has been predicated on the fact that we are, and we represent indigenous institutions developing solutions with and for indigenous people. Further, it is our view that Canada should continue to build on the best practices, and the institutional supports and successful partnerships that currently exist today.
With these comments in mind, we have three recommendations for your committee.
First, there should be additional public investments for aboriginal financial institutions. Since the 1990s, opportunities for indigenous businesses have changed significantly. The number of indigenous businesses is growing exponentially as a result of new opportunities, demographics and demonstrated success, yet in the last 20 years, annual federal funding has actually decreased by 58% on a dollar value and 72% by value. Notably in this context, agriculture-specific programming and supported advisory services to indigenous farmers was cut completely in 2014.
Current loan capital and program resources do not allow financial institutions to respond to the growing interest in business development, including the agricultural and agri-food sector. Some 40% of our aboriginal financial institutions are fully loaned out. They're waiting for loans to be repaid before they can issue new ones. There is insufficient capital to respond to the needs of indigenous businesses.
NACCA has submitted a business case to the Government of Canada to seek $67 million a year to support existing aboriginal economic programs, business support, which would be a new program, and our institution. The main driver of that business case would be to create a growth fund that would provide perpetual growth for the aboriginal financial institutions to access capital by raising private sector capital.
The second recommendation is that Agriculture and Agri-Food Canada should partner with NACCA. You heard from Agriculture and Agri-Food Canada officials on their efforts to engage in business communities. We can help. We propose that Agriculture and Agri-Food Canada consider partnering with NACCA to deliver its financing and business support services. NACCA is already the program delivery partner for lndigenous Services Canada. We can build on that knowledge, experience and success, and, of course, on our relationship with our own businesses and communities. By partnering, we would build on what stated in his budget speech in 2017: “We know that strong partnerships between the federal government and indigenous communities are crucial for our success.”
The third recommendation is that more flexibility is needed in existing terms and conditions. The committee heard previous witnesses describe the challenges faced by indigenous businesses when applying to programs administered by Agriculture and Agri-Food Canada. This has also been the experience of many of our business clients. A program delivery partnership between Agriculture and Agri-Food Canada and NACCA would help address these impediments in program design and delivery. NACCA has a proven track record of successfully meeting the requirements and responsibilities of accountable program delivery while meeting the needs of our clients.
I would like to conclude with the following: Aboriginal financial institutions have an enviable record of success supporting indigenous businesses across Canada, including in the agriculture and agri-food sector. However, our ability to help is limited by our funding from government. We are proud of our success, but with the resources we have, we can only do so much. It will be indigenous people who will find the solutions to the challenges instead of relying on the government and corporate Canada. Healthy indigenous businesses will be able to construct container farms, install their own community freezers, and grow their own self-sufficiency and local economies. Additional funding and new partnerships with existing programs, like Agriculture and Agri-Food Canada, would result in the creation and growth of so many more businesses.
ᒣᒃᐌᑦᒡᐦ. Thank you.
I want to thank the witnesses for being here today, Mr. Chair.
One of the things that was mentioned was the growth fund and how best to capitalize on that so that you have the ability to lend it out.
What I am thinking of are different options to be able to build that. I know that a number of years ago, groups of farmers who were retired were talking about, rather than having to sell their properties and pay the capital gains and so on, just putting that money into a fund and people would be able to use it.
I see the structure of our first nations as having that potential if they decide to. Is there any way in which that type of leveraging of funds from one nation to another might have some merit?
I think there is the possibility for it.
The problem is that as soon as somebody gets control of a fund, they don't want to give it up and share it, even if it's not being used. That's the challenge we face.
We have a pool of money across Canada with our different AFIs, aboriginal financial institutions. Some of us have no money, but we're a booming economy and we need more. Some of us are in a not-so-busy economy and we're holding on to money. If we said to one, “Why not hand it over to one in B.C.”, they'd say, “Why would we want to do that?” It puts a challenge.
However, we've talked to each other about how we could do that. I think, delicately, we have come to a place where we could do that. We create a framework: x percentage would be held by each of the regions, but a percentage would then be held centrally by NACCA and would be able to be distributed on an as-needed basis. Based on structures like that, we've been able to create models where we can pool monies and be able to distribute them to where they are needed.
Thank you very much, Chair.
Mr. Metatawabin and Dr. Leach, thank you for coming today and contributing to our study.
When you use the term “agriculture”, it's a concept that has many different meanings. We have our modern construct, which is a very technical enterprise, but if you go to first nations history and their management of the land and food resources, it's very different. I come from Vancouver Island, and I look at how the Cowichan, the Lyackson, Penelakuts and Stz'uminus manage their food resources. We have evidence of careful management of the Cowichan River, building weirs to manage the salmon stocks. There's evidence of managing ancient clam beds. There's a common expression among the nations in my riding. They say that when the tide goes out, the table is set.
We also had some great testimony from Chief Byron Louis. He talked about some of the great opportunities that exist finding international niche markets. For example, in the interior of British Columbia a lot of ginseng is being grown. A previous witness brought an extract of Labrador tea and also the leaves. I've also read some articles about haskap berries being grown up north and their resiliency.
I'm wondering if you can add a little to Chief Byron Louis' commentary where you see some potential growth areas for first nations, Métis and Inuit.
That's an excellent question.
I think there's an untapped market out there for all the indigenous entrepreneurs who are growing their own unique organic products. Sometimes it's been going on for many generations, and they just don't know how to market it. They're drinking it. They're consuming it. They're sharing it among themselves, but that stuff's good, and there's an international market for it. We should start taking a look at how we could start getting more access to that. You know how it works. You first do it locally and inevitably you start thinking down the road about doing it internationally. Some of them should be able to start looking at that, because those opportunities are there, but I think they're going to need support on capacity, on marketing, on the legislative and legal framework around them. Those are quite the impediments for new entrepreneurs and ours, so I think it would be good if we could provide support.
One of the things we did talk about in another meeting was trade shows. Can we fund and organize a trade show, an international one, where we could get our food products somewhere and start exchanging and maybe see what kinds of markets we could look at?
Mr. Chair, as I mentioned earlier, I had the opportunity to visit Bas-Saint-Laurent a few times with my colleague , who represents many farmers and producers in that region.
The 2018 drought was the worst in 50 years. It followed the 2017 drought, which had also been quite horrible.
The problem is that, according to crop insurance rules, rainfall from the last days of the growing season is taken into account, and the calculation period can't be extended. That's exactly what happened in 2018: the rain came at the end of the growing season of the plants included in the calculation. Unfortunately, under normal rules—although there is nothing normal about nature—farmers were not eligible for a full payment for their 2018 losses.
Farmers had conversations with the La Financière agricole du Québec. Basically, all the stakeholders on the Quebec side recognize that certain technical details need to be modified, and they are prepared to make these modifications. However, Agriculture and Agri-Food Canada would have said no. In discussions with farmers, the department acknowledged the problem and said it was willing to make changes for 2019, but it did not want to reconsider 2018. Yet it's 2018 that did poorly and that may force some producers to abandon their production. Action needs to be taken for 2018.
Everyone must come together to convince Agriculture and Agri-Food Canada, as well as all stakeholders reporting to it, to make the changes required for 2018 so that these people can receive the payments they're entitled to. Yes, they are entitled to payments because they pay insurance. These aren't subsidies. It's like paying for car insurance: when you have an accident, you expect the insurance company to cover the damage, even if you sometimes have to insist because the company doesn't want to recognize all the details. Lastly, when you take out insurance, you think you are properly insured and continue paying the premiums without fear as required. People do this because they don't have a choice, but they know that they will be covered in the event of a disaster.
Yet there was a disaster in the five regions mentioned. That's why it's important for the to explain to us the reason for his refusal and for us to try to convince him at the same time to modify certain technical details for 2018.
Mr. Chair, I don't want to get into a long discussion. I think that, here, we are all very close to farmers. We understand their situation. I will leave it at that for now.
Thank you very much, Mr. Chair.
Out of respect for my opposition colleagues, we said at the start of the meeting that we would allow this to be discussed, even though it is only a notice of motion. However, on our side, we won't be ready to render a decision until Thursday.
Perhaps you remember, Mr. Chair, that we had the opportunity last week to discuss committee business and that this motion was not raised.
That said, I must say that the motion as presented poses a problem for us, especially the idea of “refusal to accept”. I don't think that comment is accurate: I don't think there was refusal on the department's part.
I know my colleagues Mr. Poissant and Mr. Breton from Quebec have heard farmers' complaints. They are well aware of the drought problem, which didn't affect my riding, but I know that my colleagues fought very hard to ensure that there would be a response.
It's also important to remember that all these programs are negotiated with the provinces in advance. To receive funding, each of them must agree to all the criteria. That includes the crop insurance program. According to the department, that's the only drawback.
However, I can assure you that Mr. Poissant and Mr. Breton worked very hard. The members of the committee will vote on this motion, but we need to amend it. I should also remind members that we agreed that the committee would invite the to appear as soon as possible.
If I may, I can work with Mr. Berthold to find a middle ground that would allow us to accept what he wants to propose to the committee. I think our committee can agree to find an answer that will benefit all parties concerned.
Thank you very much, Mr. Chair.
First of all, I have to say that there was, indeed, a refusal, Mr. Drouin. I have seen the minister's letter indicating that he cannot effectively change the criteria and that we must therefore rely on the decision of La Financière agricole du Québec. In short, Quebec has already said yes. La Financière agricole du Québec said yes. Everyone agrees on the Quebec side. All that's missing is a response from the federal government.
I'm not up on all the details, but I know that the problem we have right now is that the deadline for insurance payments to producers is March 1. So it's urgent. They told us last week at a press conference that they couldn't wait two months. This needs to be resolved as quickly as possible.
I may be interested in knowing what the changes are, but I want to understand why the department refuses to apply them to 2018.
Mr. Drouin, what kind of amendment to the motion would you propose so that we can receive the as quickly as possible?
Unfortunately, when my colleague asked the Parliamentary Secretary, Mr. Poissant, in the House, he responded with something that had nothing to do with the situation in Bas-Saint-Laurent. So I'm afraid that this question is being postponed too long, Mr. Drouin, and that no decision is being made.
I commend your open-mindedness, but I want to make sure that we are acting for the right reasons, for the producers. The goal is to convince Agriculture and Agri-Food Canada to change its decision, no matter how. Whether it is by inviting the to appear or by any other way, what matters is making the right decision in this case for all the people who have had to suffer this drought.
I'll come back to Mr. MacGregor's proposal. I think there is room for two meetings. How will we act in the future? Today's weather is no longer what it was when all these programs were created. In a given month, there may be 28 days without precipitation followed by two days of intense rainfall. If we only consider the precipitation received at the end of the month, there will have been the same amount of precipitation as the month before, but the precipitation for the month before will have been better distributed over the period. I think it is appropriate for the committee to look at this.
However, I am once again ready to move forward and discuss with you between now and Thursday, Mr. Drouin, to find a better wording. I hope that we will work in the right direction, that is, for the producers in these regions, including the ones proposed by Mr. MacGregor. I'm being given an opportunity, and I'm grabbing it.
Here's how I see things. If we make changes for 2018, they will apply everywhere, to everyone who faced the same very specific situation in 2018. It is actually a very specific case. I don't think Agriculture and Agri-Food Canada is deciding to make changes just for the regions mentioned. If other regions have experienced the same situation, I don't see why they would be excluded. That's why I see no problem with mentioning that this applies to other sectors affected in 2018, if any.
There are currently five regions with very specific cases and supporting documents: Bas-Saint-Laurent, Chaudière-Appalaches, Gaspésie—Îles-de-la-Madeleine, Saguenay—Lac-Saint-Jean and Abitibi-Témiscamingue. These people have made claims and representations. As I mentioned earlier, La Financière agricole du Québec is ready to recognize the situation. We are told that the Government of Quebec is also prepared to do so. Only the Government of Canada must give its consent.
These people expect a lot from us. I think we will indeed focus on that. Just as we can't prevent someone who has rights from exercising them, I don't see why other people in the same situation shouldn't be entitled to compensation such as that to which people in the regions mentioned are entitled.
As I understand it, we are going to resume this debate on Thursday. So I agree to adjourn the debate on this motion and pick it up again on Thursday.