THUNDER BAY — The Nishnawbe Aski Development Fund (NADF) has dispersed upwards of $4 million across its demographic this year, with $2.8 million of that in the areas of Thunder Bay, Fort William First Nation and other parts of the northern region.
The dispersion represents a 25-per cent growth for the organization and the Indigenous business landscape. In March, the development fund reached an overall milestone of dispersing $60 million to the growth of Indigenous businesses in Northern Ontario.
Brian Davey, the development fund's executive director, says the funds originated from a federal government capitalization program in the 1980s, which ended 10 years later.
"The agreement ended but we were allowed to keep the funds and we kept reinvesting it," he said. "We get principal interest back and then put it out again. There's no government ties to it (anymore). We now get contracts from the government to administer assistance on their behalf, but it's not as large as our initial capitalization."
Labour challenges, costs to borrow money
Businesses in the Indigenous sector are also dealing with labour shortages.
"Immigration and the large influx of newcomers to the area has allowed businesses to flourish and to do better because now they have access to employees who weren't here before," Davey said.
"Another challenge is that interest rates are high and hopefully, that will change as the government gets a better grip on inflation and reduces it to reach their two-per cent target."
Davey predicts that interest rates will head downward in 2024, which he says will be good for everybody.
"I don't think we're going to hit two per cent with inflation rates, but maybe under three per cent would be my guess," he said. "We still have an issue with a lack of housing and rentals in Thunder Bay and it's driving the price and rates up, making it difficult to find a place to stay. If we're going to bring in more people to live in the city, we've got to have room for them to live."
He added that developers of new buildings try to recoup their inflation and material costs and pass that cost on to the tenant through higher rental fees.
On landscape availability, Davey says there seems to be a willingness for new businesses to look at the downtown cores to start up because there's already established infrastructure.
"Although it's very expensive to build out infrastructure to areas that haven't been developed before, we need to look at expanding the city to (those) areas and I think they're (starting) to do that to some extent," he said. "It's going to cost money but more funds are needed for expanding the infrastructure to build out those areas that are undeveloped.
Commercial reserve worth exploring
Davey noted both the City of Thunder Bay and Fort William First Nation should take a serious look at the idea of a commercial reserve that's owned by several First Nations.
"They do this in the southwest and it develops in the city," he said. There's going to be a service agreement for water and sewer and but it'll attract more businesses, particularly Indigenous businesses because the salaries are tax-exempt for a lot of the employees if you are status.
Davey says there are different places to establish this with one being the "federal land" by the airport.
"They are not large tracts of land and usually have office buildings, distribution centres and storage facilities and (gas stations)," he said.
"These types of things are multipurpose buildings that you see on commercial reserves. Fort William First Nation is getting crowded. You also need a bridge or another exit point. There's too much traffic trying to get onto the reserve points."
Davey says the Nishnawbe Aski Development Fund's goals for 2024 include the completion of their $10-million Indigenous Opportunity Fund that they created as a loan fund for accredited investors.
"We're putting that money together in a fund and loaning it to two businesses," he said. "We just don't have enough capital to meet the demand and we're getting a lot of requests."
Davey says they work with small businesses, but some larger asks are coming in that they can't meet. They need to establish a larger loan fund and there is interest from people in southern Ontario who are looking to participate in this endeavour.
"We're looking to set that up and have it operational this summer," he said, adding this is primarily for Indigenous businesses which are jointly owned by Indigenous and non-Indigenous people as long as there's a 51 per cent ownership on the Indigenous side.
"It will positively impact many businesses, not just Indigenous, and we're excited about that," he said. "That's our goal."
The Chronicle Journal / Local Journalism Initiative
