Aboriginal-owned businesses in the territory continue to face no shortage of obstacles, says the head of the Yukon First Nation Chamber of Commerce.
“There’s just so many things to tackle, where do I start?” said Lynn Hutton, citizen of Trondek Hwech’in and president of the chamber.
One item is access to capital. Many businesses start up with funds from mortgage-based loans. But for many First Nations, property cannot be used as collateral as they often do not own their homes.
Yukon First Nations with self-governing powers should be well positioned to be able to help individuals with their financing, though they are not quite there yet, Hutton said.
For now, the main financing alternative is Dana Naye Ventures, a Yukon-based financial services company. But the lack of property collateral still means they can charge higher interest rates.
Hutton said this is one reason why Yukon does not have many sole-proprietor First Nations businesses. Though there may be smaller operations like outfitting or trades operations, there aren’t many. “We need to find ways to help those guys out,” she said.
Hutton explained a loan barrier for larger projects comes from outdated classifications by banks. She pointed out that most Yukon First Nations are not Indian Act bands anymore, yet many banks carry hangover requirements from this era that seek two different loan guarantees. “That doesn’t happen in the private sector,” Hutton explained, adding that she is seeing rapid change and interest among banks to help the chamber fix these technical barriers.
Though First Nations’ development corporations cannot yet provide these loans themselves, a future goal is to create a Yukon First Nation private equity company based on contributions from all nations’ trusts to assist local businesses.
While Yukon First Nations have been self-governing for two decades, economic development plans are in some cases just beginning to unfold. Hutton pointed out that First Nation development corporations originally took care of business on a need basis, growing from housing, to fuel to other ventures.
“It’s just been since the last financial transfer agreements that we’ve changed that so we’ve moved our business under trusts, so now our trusts are actually doing business,” she said. “We get some really weird issues that we’re starting to have to learn how to deal with.”
Hutton said the chamber is also looking to create a pan-territorial First Nation business council with Alaska, Northwest Territories and Nunavut, explaining that they’ll have more to offer if they are united. She said northern companies often enjoy a competitive advantage over southern ones that lack familiarity with the land and its people.
Albert Drapeau from the Yukon Department of Economic Development is currently on loan for six months to assist the First Nation chamber. His priority is to communicate with development corporations about what they need for better access to procurement. Hutton noted that many members of the chamber are non-First Nation businesses that have an equal interest in keeping procurement in the Yukon, a subject of heated debate among the territory’s political parties.
“Up here the sky is the limit, we can do anything,” Hutton said. “We have the ability to change things. It’s our responsibility.”
Contact Lauren Kaljur at
lauren.kaljur@yukon-news.com