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Aboriginal Entrepreneurship Branch April 2011

Aboriginal Entrepreneurship Branch April 2011.

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Aboriginal Entrepreneurship Branch April 2011

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  1. Aboriginal Entrepreneurship Branch April 2011

  2. According to the 2006 Census, there were more than 37,000 self-employed Aboriginal people in Canada, up from just over 27,000 in 2001 – an increase of 38%. During this period, the rate of growth of self-employed Aboriginal people was 5 times that of self-employed Canadians overall (7%) More than 1 in 5 work in higher knowledge industries such as professional, scientific and technical services 6 in 10 (61%) Aboriginal businesses reported profits in 2010 On-reserve businesses are experiencing less growth than off-reserve businesses, and one key reason may be greater difficulties in accessing financing 2 Aboriginal Business in Canada

  3. Over $350 billion in major resource/energy developments have been identified in or near Aboriginal communities across Canada. Access to capital is a critical element in the creation and growth of Aboriginal businesses Aboriginal entrepreneurs experience difficulties in accessing private capital for many reasons including: perception of higher risk, limited entrepreneurship and management experience, Lack of strong financial assets and legal impediment to securitize loans, remote locations of some communities, etc. 3 Aboriginal Entrepreneurship

  4. Aboriginal Business Development Small and Medium Enterprises Aboriginal Financial Institutions Loan Loss Reserve Major Resources and Energy Investment Funds Procurement Strategy for Aboriginal Businesses (PSAB) 4 AEB Programs

  5. The Program supports the Federal Framework for Aboriginal Economic Development by Strengthening Aboriginal entrepreneurship through direct and indirect support All Aboriginal heritage groups are eligible The vision of the program is to build sustainable access to capital models for Aboriginal business for equity and debt as well as advisory services. Leveraging partnerships and loan capital to support Aboriginal business is key This program is needs based and opportunity driven Total Gs & Cs budget for 2011-2012: $22.7M Points of Delivery: 7 Regions, External Delivery Officers (XDOs), and Alternate Service Delivery (ASD) 5 Aboriginal Business Development Program

  6. Provides non-repayable contributions to entrepreneurs and businesses for the creation, expansion and acquisition of Aboriginal businesses Individual Aboriginal business may receive a contribution of up to $99,999 and community owned businesses up to $1 million of non-repayable contributions 6 Aboriginal Business Development Program

  7. ABDP provides support to Aboriginal businesses through a network of Aboriginal Financial Institutions (AFIs) Program also supports the National Aboriginal Capital Corporation Association to support the network with training and capacity building Currently, there are 59 AFIs in operation across the country What do AFIs do AFIs provide a range of services and support to Aboriginal businesses: Provide developmental loans to Aboriginal businesses Business planning, advisory services and referrals 10 AFIs function as External Delivery Organizations, 3 of which also function as Alternate Service Delivery Organizations to support ABDP general business programming in remote and rural areas Since their creation, as of 2009-10 AFIs have provided 35,724 loans totalling $1.5 billion 7 AboriginalFinancial Institutions

  8. Launched as pilot in 2008/09 Encourages commercial financial institutions to provide debt financing to First Nation individuals and community-owned businesses (currently applicable to on-reserve projects) Approximately $18.7 million in contributions to seven lending institutions has created $83 million in new capital for business loans on reserve, particularly where Section 89 impedes loan security. Participants include: Affinity Credit Union (Saskatchewan), Business Development Bank of Canada (National), Desjardins Group (Quebec), First Nations Bank of Canada (National), Servus Credit Union (Alberta), and VanCity (BC) Moratorium currently in place – program under assessment . 8 Loan Loss Reserve (LLR)

  9. The Major Projects and Investment Funds (MPIF) initiative was created in March 2008 to assist Aboriginal businesses to take full advantage of major economic opportunities by providing increased access to capital, leveraging and developing partnerships Specifically, the MPIF supports with impartiality and neutrality the participation of Aboriginal Canadians in large-scale business development opportunities through capacity support, equity contributions, feasibility assistance and facilitation of partnerships between Aboriginal businesses, the private sector and government. MPIF has two business lines: Major business projects: needs based equity-gap contribution funding; and Major business investments funds: gaps based financing provided by a third party. Concentrates on projects in areas of hydro, forestry, mining, oil and gas, renewable and alternative energy such as wind, biomass, solar, large commercial business projects, etc. Total Gs & Cs budget for 2011-12: $10.7 million 9 Major Projects & Investment Funds (MPIF)

  10. Provides advice, facilitation of partnerships, and equity contributions to large-scale Aboriginal businesses (e.g. mining, forestry, oil and gas, hydro, wind, and biomass) Aboriginal businesses may receive up to $1 million in business advisory services and up to $10 million in capital equity for commercial ventures Improves access to commercial financing (equity investment and/or repayable contributions) by leveraging new capital in partnerships with provinces/territories, Aboriginal organizations, and private equity providers Targets capacity and equity gaps and positions Aboriginal businesses to partner in major resources and energy economic opportunities There are seven Investment Funds 10 Major Projects & Investment Funds (MPIF)

  11. : MPIF has supported the creation of 7 Investment Funds BC - Regeneration Fund managed by Aboriginal Energy Partnership MPIF contribution $3M; SK - Business Ready Investment Development Gateway managed by Westcap Inc. - MPIF contribution $7.6M; MB - Resource and Energy Investment Program managed by the First Peoples Economic Growth Fund Inc. - MPIF contribution $3M; QC - Fonds d’investissements projets majeurs-Premières Nations to be managed by Corporation de Développement Économique Montagnaise - MPIF contribution $4.8M –yet to be announced; SK - Métis Energy and Resource Program managed by the Clarence Campeau Development Fund - MPIF contribution $5M; MB - Major Resource and Energy Development Fund managed by the Manitoba Métis Economic Development Organization - MPIF contribution $3M; and, NS - Mi’kmaq Major Resource and Energy Development Fund managed by the Kwilmu’kw Maw-klusuaqn Negotiation Office - MPIF contribution $3M 11 Major Projects & Investment Funds (MPIF)

  12. Over the last 3 fiscal years, MPIF invested: Over $13 million supporting 44 major Aboriginal resource and energy projects across Canada leveraging over $228 million from other public and private debt and equity financing sources; and, Over $29 million and leveraged $25.25M to create and expand 7 arms-length managed partnership funds expected to leverage over $420 million of project investments from other sources over 3 years These MPIF investments helped create over 320 direct jobs. From an investment ratio perspective, MPIF (projects and funds) leveraging power is 17.5:1 - meaning for every $1 MPIF put on the table $17.5 is leveraged from other public and private funding partners to support Aboriginal major projects 12 MPIF Leveraging Power

  13. The Procurement Strategy for Aboriginal Business (PSAB) was announced in 1996 to offer Aboriginal businesses the opportunity to access federal procurement PSAB aims to stimulate Aboriginal socio-economic development for Aboriginal businesses through government procurement opportunities INAC leads the delivery of PSAB for the Government of Canada with the help of a PSAB coordinator network Departments and agencies are encouraged to initiate and participate in supplier development activities aimed specifically at Aboriginal businesses In 2009, Aboriginal Procurement accounted for 5,527 contracts and $459.5 million in Federal Government contracts. 13 The Procurement Strategy for Aboriginal Business (PSAB)

  14. Outreach and Promotion through Supplier Development Activities for both the Aboriginal business and the Federal Government Community Set Aside Opportunities on Federal Government Contracts through the Mandatory and Voluntary Set-aside component Aboriginal Business Directory showcasing Aboriginal Business Capacity of PSAB certified Aboriginal Businesses Strengthening the PSAB policy by modeling a 21st Century Procurement module 14 PSAB Tools and Components

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