Economic Reconciliation Isn’t Just Up to the Government. Businesses Play a Key Role

Dear business owners, economic reconciliation isn’t just up to the government – it’s as simple as sourcing supplies and equipment from Indigenous suppliers.

Prior to colonization, Indigenous peoples had systems in place for the production of goods and services with extensive trade networks for their distribution. These established market economies diminished with the arrival of Europeans, who disrupted their trade economy by introducing a monetary system and the punitive policies of the Indian Act. 

Economic reconciliation addresses the historical injustices endured by the Indigenous peoples in Canada by working towards Indigenous economic independence and prosperity. For Indigenous peoples, it means the opportunity to take their place in the national economy and foster sustainable growth for generations to come. 

Though progress has been made, there are ways to accelerate growth for Indigenous businesses and unlock their potential. 

In the ongoing dialogue about economic reconciliation in Canada, there’s a vital piece often missing from the conversation: the role of businesses. While there have been many roundtables, committees, and panels formed on long-term strategies and policies, the immediate actions that businesses can take to support Indigenous communities are frequently overlooked. 

Within the complex landscape of reconciliation, it’s crucial that businesses recognize their power and responsibility in driving meaningful change, and there are steps they can take now. 

Money In and Money Out: Lack of Access to Capital and Economic Leakage Hinders Indigenous Economic Growth

As of 2023, there are over 50,000 Indigenous-owned enterprises in Canada. While Indigenous entrepreneurship continues to grow in Canada, there are barriers that remain, hindering them from pursuing their maximum potential.

There’s currently a massive $83 billion gap in access to capital for Indigenous entrepreneurs compared to the level serving mainstream Canada. Additional research indicates that Indigenous entrepreneurs are three times more likely to be denied loans compared to their non-Indigenous counterparts. This systemic inequality severely hinders their ability to start, sustain, or expand their businesses.

Economic leakage is a pressing problem that further worsens these imbalances, with a significant portion of spending flowing out of Indigenous communities. For every dollar spent outside of Indigenous-owned businesses, Indigenous communities lose 90 cents, continuing cycles of poverty and dependency.

The Role of Non-Indigenous Businesses in Accelerating Indigenous Economic Growth

To address these barriers and advance economic reconciliation, businesses must prioritize supporting Indigenous-owned companies in their procurement decisions. By consciously choosing to source goods and services from Indigenous suppliers, businesses can contribute to economic empowerment and Indigenous self-determination. 

Supporting Indigenous suppliers is not only a moral imperative but also a sound business decision. Recent research indicates that diversity and inclusion are correlated with improved financial performance, suggesting that businesses stand to benefit from engaging with Indigenous suppliers.

Working with Indigenous companies is also an indirect way for non-Indigenous organizations to contribute to the strength and growth of Indigenous communities. 

eSupply Canada, for example, is an Indigenous-owned company that was intentionally built to give back to Indigenous communities. Its revenue generation platform drives economic reconciliation by increasing Indigenous participation in local economic activity, enabling local Indigenous entrepreneurs to launch their own online storefront where they can become their community’s dedicated distributor of business supplies. This allows them to maintain revenue within the community, putting a plug on their economic leakage to fund local initiatives like supporting children’s welfare and education. 

The benefits of economic reconciliation extend beyond the realm of business and economics. By empowering Indigenous communities economically, businesses contribute to broader social and cultural revitalization efforts. Economic self-sufficiency enables Indigenous communities to preserve and promote their cultural heritage, languages, and traditions, fostering a stronger sense of identity and pride.

Additionally, economic reconciliation has the potential to strengthen the social fabric of Canadian society as a whole. By fostering greater economic equality and inclusion, businesses contribute to the creation of a more cohesive and resilient society. When all members of society have the opportunity to participate fully in the economy, everyone benefits, leading to greater social stability and prosperity.

Advancing economic reconciliation does not rest solely on the shoulders of Indigenous entrepreneurs or businesses, however. It requires collective action and systemic change across all sectors of society. 

Canada’s 5% Indigenous Procurement Target is a Great Start, but Others Should Follow to See Real Change

While the federal government has mandated a 5% Indigenous procurement target for its departments and agencies, all private businesses, both Indigenous and non-Indigenous, should also establish their own mandated targets for partnering with Indigenous suppliers. 

Indigenous suppliers like eSupply Canada can be a model for how businesses can actively support Indigenous communities while also fulfilling their own economic interests. Businesses need supplies in order to operate. Sourcing them from Indigenous suppliers not only fulfills their business needs, but they’re also taking the necessary steps towards creating sustainable economic opportunities for Indigenous businesses. 

Furthermore, platforms like eSupply Canada demonstrate a mutually beneficial partnership wherein businesses can access diverse perspectives, innovative solutions, and untapped market opportunities. This symbiotic relationship between businesses and Indigenous suppliers underscores the potential for economic reconciliation to drive not only social progress but also economic prosperity.

Though mandating procurement targets is a good first step, the Government of Canada should also prioritize increased participation from Indigenous entrepreneurs. The First Nations Procurement Organization, for example, was recently created to help First Nations peoples and businesses overcome systemic barriers in accessing federal procurement opportunities. However, the membership group represents other organizations, overlooking direct consultations with Indigenous entrepreneurs. 

Effective Economic Reconciliation Requires Combined Efforts From Governments and Businesses

Achieving economic reconciliation requires a sustained and collaborative effort from all sectors of society. Governments, businesses, Indigenous communities, and civil society organizations must work together to address the root causes of economic inequality and create a more level playing field for Indigenous entrepreneurs.

In addition to partnerships with Indigenous suppliers and advocacy for policy reforms, businesses should also invest in capacity-building initiatives and consider mentorship opportunities to support the growth and sustainability of Indigenous-owned enterprises. A dedicated peer-to-peer learning platform for Indigenous entrepreneurs in Canada, for example, could spur collaboration and knowledge sharing to advance their business growth.

Economic empowerment also creates opportunities for Indigenous youth, providing them with the resources and support they need to pursue their careers. eSupply Canada is an online distributor of office and janitorial supplies. A portion of every sale made through its platform is used to support Indigenous scholars pursuing post-secondary education. By investing in education, entrepreneurship, and skills development, businesses can help break the cycle of intergenerational poverty and create pathways to success for future generations.

Businesses must go beyond token gestures of support and commit to meaningful and sustained action. Meaningful engagement with Indigenous communities requires listening to their voices, understanding their needs and priorities, and working collaboratively to find solutions that benefit everyone.

Ultimately, economic reconciliation is about recognizing the economic potential and talent that Indigenous communities bring to the table. By working together, we can build a future where economic reconciliation is not just a goal but a reality for all Canadians.