Statement by MP Jean Crowder on tribal Wi-Chi-Way-win court case

I fully support the decision by Tribal Wi-Chi-Way-Win Capital Corp. (TWCC) to sue the federal government after being shut out of a new program designed to increase capital available to small and medium businesses in Aboriginal communities.

I fully support the decision by Tribal Wi-Chi-Way-Win Capital Corp. (TWCC) to sue the federal government after being shut out of a new program designed to increase capital available to small and medium businesses in Aboriginal communities.

It is a shame that this government has turned its back on the financial institutions that started the entrepreneurial movement in First Nations, Métis and Inuit communities. When no one else would offer capital to small businesses on reserves, the Aboriginal Financial Institutions (AFIs) were created and took on that risk. Now the government is pushing them aside.

The new Loan Loss Reserve program is a backstop to guarantee any loans made to small or medium businesses. Loan guarantees make it worthwhile for financial institutions to offer loans to First Nations, Inuit and Métis entrepreneurs because the risk of loans going unpaid is reduced. Before the creation of AFIs, there were no options for business owners in Aboriginal communities who didn’t have personal property to put up as collateral for a loan.

The Minister of Indian and Northern Affairs himself said that AFIs were critical to long-term Aboriginal economic self-sufficiency. Why is he keeping this new tool out of their hands?

Although financial institutions like TWCC had negotiated with the federal government for months, when the new Loan Loss Reserve program was announced, only banks and credit unions were eligible to become lenders. The official explanation is that the Loan Loss Reserve program is designed for loans over $250,000, which is the upper limit of what an AFI can offer an entrepreneur or community. But they have been able to offer larger loans in special circumstances.

The Minister needs to open up the Loan Loss Reserve program to Aboriginal Financial Institutions or he will be limiting the options for First Nations, Inuit and Métis entrepreneurs and limiting the growth of capital development in Aboriginal communities.