Evaluation of the Indigenous Entrepreneurship and Business Development Program

Program strengths

The evaluation found that the IEBD Program remains relevant to both Indigenous and federal priorities, including a priority to advance Indigenous self-determination. The Program helped remove barriers to Indigenous People seeking business capital and supports, and is meeting the intended outcomes of sustaining the network of Indigenous lending institutions, creating and expanding Indigenous businesses, and creating or maintaining jobs through lending.

During the evaluation period, the administration and delivery of the ATC program was transferred to Indigenous partners representing the network of Indigenous-owned lending institutions (IFIs and MCCs), which overall went well and is widely supported by Indigenous partners. The importance of continued funding to support the ATC program is also underscored by findings that Indigenous entrepreneurs feel a stronger and more personal relationship with IFIs and MCCs than with mainstream lending institutions. In addition, the program has had positive impacts for individuals, families and communities, and the lending system moved quickly to respond to the needs of Indigenous entrepreneurs and businesses amid the COVID-19 pandemic.

Program limitations

There continue to be barriers to Indigenous entrepreneurship and business that are not addressed by the current scope of the program. The evaluation found that the program's investment in the Indigenous lending system is not sufficient to meet current and anticipated future levels of demand for loans and business supports, given the anticipated growth in the Indigenous population. The evaluation also found that there is an ongoing need for targeted investments in pre- and post-care to facilitate success across all stages of business development. As well, a siloed approach to funding across the IEBD sub-programs creates challenges for entrepreneurs, particularly when navigating various supports and requirements. Also, the transfer of the ATC program is currently limited to the delivery of contributions, and further work is required to fully transfer the suite of IEBD programs.

Although efforts have been made to improve the inclusivity and reach of programs across distinctions, gender and age groups, more work is needed to reach and monitor equity in access. The current logic model and inconsistent program data do not reflect outcomes relevant to Indigenous entrepreneurs, nor do they allow for the assessment of program impacts. An updated performance measurement framework is required in order to reflect outcomes relevant to Indigenous entrepreneurs and key program partners. The evaluation also found that the Indigenous lending system does not have sufficient funding under the program to meet current and anticipated future levels of demand. This said, the lending system moved quickly to respond to the needs of Indigenous entrepreneurs and businesses amidst the COVID-19 pandemic.

Recommendations

It is therefore recommended that ISC:

1. Engage First Nation, Inuit and Métis partners to explore options to transfer the full IEBD program, including the Indigenous Business Directory and the ABO stream of funding. This includes a recommendation to:
   1. Work with First Nations, Inuit and Métis partners to fully transfer the ATC program, including the design, delivery, eligibility, and reporting of results on a distinctions basis.
2. Engage First Nations, Inuit and Métis partners of all program streams to develop an approach to further reduce barriers to entrepreneurship, including by broadening program access for Indigenous Peoples who are harder to reach and/or face exacerbated barriers to the pursuit of entrepreneurship. This includes recommendations to:
   1. Engage First Nations, Inuit and Métis partners of all program streams to consistently support pre- and post-care for Indigenous entrepreneurs;
   2. Explore and ensure that the federal procurement process is equally accessible to First Nations, Inuit and Métis businesses; and
   3. Perform ongoing monitoring of the adjustments resulting from the modernization initiative to ensure that adjustments prove effective.
3. Co-develop with First Nations, Inuit and Métis Peoples a new program logic model and performance measurement framework that contains broader outcome measurements supported by Indigenous partners. This includes a recommendation to:
   1. Collaborate with internal and external partners to expand and employ Gender-Based Analysis Plus to their data collection, and sustainable targeted approaches meeting the needs of diverse groups.
4. Explore options to increase the funding envelope under IEBD, allowing for greater reach, impact and transparency. This includes recommendations to:
   1. Work with ATC partners to explore long-term funding mechanisms that will better support the sustainability of IFIs and their ability to deliver developmental lending; and
   2. Work with First Nations, Inuit and Métis partners to explore targeted approaches and better leverage existing approaches to support IFIs/MCCs in retaining skilled employees.
5. Standardize the PSIB Coordinator role and provide ongoing centralized support to the PSIB Coordinator Network. This support may include ensuring Coordinators have sufficient onboarding, training, and capacity to perform the functions of this role, and that there is a consistent and transparent line of communication between ISC and the Network of Coordinators.

Overall management response

Action plan matrix

2.1 Background

The Indigenous Entrepreneurship and Business Development (IEBD) program is a core program under the Lands and Economic Development sector at Indigenous Services Canada (ISC) and is designed to support business and economic development efforts of Indigenous entrepreneurs and communities. IEBD is comprised of three program areas that support Indigenous entrepreneurs and business owners in Canada:

Aboriginal Entrepreneurship Program – Access to Capital (ATC) provides funding to establish, expand and diversify the network of Indigenous Financial Institutions (IFIs) and Métis Capital Corporations (MCCs) providing developmental capital to Indigenous entrepreneurs, thereby enhancing access to capital for Indigenous entrepreneurs across Canada. The ATC program is comprised of five complementary sub-programs:

1. Aboriginal Business Financing Program which provides equity financing for Indigenous entrepreneurs to obtain commercial loans and to keep the cost of capital affordable, ultimately to increase the number of Indigenous businesses in Canada. IFIs offer non-repayable contributions to eligible Indigenous entrepreneurs up to a maximum of $99,999 and to community-owned Indigenous businesses up to $250,000 which can be used toward eligible expenses related to business start-up and expansion.
2. Aboriginal Capacity Development Program which funds ongoing training to support IFIs and MCCs in their continuous efforts to maintain and build capacity and effectiveness as developmental lenders including through product support training, professional development, and business support.
3. Aboriginal Developmental Lending Allocation Program which provides a subsidy to IFIs and MCCs that supports them in recovering some of the delivery, administration, and repayment costs associated with the deployment of developmental lending.
4. Enhanced Access Program which is a small loan fund that helps IFIs and MCCs serve Indigenous entrepreneurs and communities who normally do not have access to the network of Indigenous-owned and controlled financial institutions for various reasons, including geographical remoteness.
5. Interest Rate Buy-Down Program which provides an interest rate subsidy to qualified IFIs and MCCs with a low liquidity ratio to offset the interest costs associated with accessing capital from other financial institutions for additional developmental lending.

Access to Business Opportunities (ABO) provides funding to Indigenous organizations, businesses or individuals to improve access to business opportunities and to enhance the capacity of Indigenous businesses. The program provides national level funding to promote a culture of entrepreneurship for activities including:

• institutional development (e.g., training and development and business supports to business development organization);
• business advisory services and training;
• commercial ventures including business innovation and growth;
• market development; and
• business development and advocacy activities.

Whereas ATC provides funding to the National Aboriginal Capital Corporations Association (NACCA) and the MCCs for their operations in support of Indigenous entrepreneurs, ABO funds broad-scale initiatives to support entrepreneurial activity.

Procurement Strategy for Indigenous Business (PSIB) seeks to increase federal contracting opportunities and to support Indigenous businesses in gaining access to the federal procurement process, including through enrolment in the Indigenous Business Directory. 90 PSIB coordinators support the strategy across federal departments and agencies, each of which have a target of 5% of all contracts being released to Indigenous businesses.

The IEBD program intends to meet the following outcomes:

3.1 Scope and evaluation issues

The evaluation covered the thematic areas of relevance, effectiveness, and efficiency over the five-year period from 2015-16 to 2020-21. Given the transfer of the ATC stream to Indigenous-led organizations, additional focus was placed on understanding the service transfer process and impact.

The evaluation used a Gender-Based Analysis Plus lens throughout all evaluation phases and processes. Gender-Based Analysis Plus is an analytical process that provides a rigorous method for the assessment of systemic inequalities, as well as a means to assess how diverse groups of women, men, and gender diverse people may experience policies, programs and initiatives. The "plus" acknowledges that Gender-Based Analysis Plus is not just about differences between biological (sexes) and socio-cultural (genders), it considers many other identity factors such as race, ethnicity, religion, age, and mental or physical disability, and how the interaction between these factors influences the way we might experience government policies and initiatives, which is a commitment of the Government of Canada^{Footnote 1}. Using Gender-Based Analysis Plus involves taking a gender and diversity-sensitive approach to our work.

This evaluation strove to integrate a GBA+ approach in a variety of ways. Wherever feasible program and survey data were disaggregated across gender, age, location and distinction group. Interview and discussion circles included lines of inquiry that intended to further understand impacts across various identity factors, including impacts for youth, women, individuals in the 2SLGBTQI+ community, and individuals living with disabilities. Where gaps in program data existed, additional secondary data were sought to understand impacts across identity (for instance, in the document review).

The evaluation also used a distinctions-based approach with the intent for the evaluation to reflect the unique interests, priorities and circumstances of First Nations, Inuit, and Métis entrepreneurs. Upon their request, a consultant served as an interface between the evaluation team and the MCCs to support their ability to fully participate.

A Technical Advisory Committee was established to advise on the design of the evaluation and ensure it used culturally relevant and appropriate approaches. The work of the Committee included guiding the evaluation so that it was ethical, methodologically rigorous, and respectful of Indigenous Peoples and communities; ensuring that it addressed the needs of key program partners; helping to identify stakeholders to be engaged in the evaluation; providing feedback on evaluation findings; and supporting the dissemination of results. The Technical Advisory Committee included representatives from the NACCA, IFIs, MCCs, and Inuit Tapiriit Kanatami. For these meetings, a balance was made in the selection of First Nation, Métis, and Inuit Elders, who were invited to support each meeting with an opening and closing prayer and were encouraged to participate in the meeting itself.

The evaluation approach was consultative, inclusive, and collaborative - tailoring methods to provide the most simple and straightforward engagement requirements and valued insight. The approach to the evaluation was refined based on feedback from the Technical Advisory Committee. The evaluation was guided by ethical principles that express the value of human dignity, including:

• Respect for persons;
• Concern for welfare;
• Collaborative;
• Self-determination; and
• Understanding of distinct contexts^{Footnote 2}

These ethical principles were practiced during the key informant interviews and through the dialogue circles in which all persons' ideas and experiences were respected, welfare of all participants was protected, and facilitators ensured a distinction-based approach. For example, the evaluation team conducted interviews confidentially and began with verbal consent from the participant, including whether they agreed to have their interview recorded. The written notes from the interview consultations were shared with the interviewees to review and approve. Any information provided was used by the evaluation team to learn more about how to evolve the programs in the future. Interviewees were informed that all interview notes, transcriptions, and recordings are subject to access to information and privacy requests by the Canadian public as per the Access to Information Act and Privacy Act^{Footnote 3}.

The evaluation was centred on Indigenous worldviews, such as the Seven Grandfather Teachings of the Anishinaabe People (love, respect, honesty, courage, wisdom, humility, and truth) and Two-Eyed Seeing (an approach drawing on the strengths of both Indigenous and Western ways of knowing, for the benefit of all), which were implemented through every phase of the evaluation. The teachings were implemented by following Indigenous protocols such as inviting Elders to open and close the meetings of the Technical Advisory Committee and ensuring representation of First Nations, Inuit, and Métis in this governance structure. The evaluation team implemented Two-Eyed Seeing through the interview questions, ensuring they at once responded to the western-centric evaluation needs while also tapping into Indigenous culture and spirituality. For example, in the interviews, specific questions were asked regarding how programs are aligned with Indigenous cultural and spiritual values and aspirations.

3.2 Design and methods

During the methodological development phase, consultations were undertaken with program representatives and partners to discuss the proposed data collection approach and instruments in detail. This approach permitted the meetings of the full advisory committee to focus more holistically on key topics within the methodology. The evaluation was based on a review of secondary and primary data collected from various engagements (N = 493). A summary of each method employed follows; additional details on the evaluation questions and methods can be found in Annexes B and C, respectively.

In this evaluation report, the following terms are used to describe the number of participants who shared their comments or findings highlighted:

Overwhelming Majority: over 75% of the respondent group
Majority: more than 50% up to 75% of the respondent group
Some: between 25 to 50% of the respondent group
Few: under 25% of the respondent group

3.3 Limitations

The evaluation encountered a few limitations to data collection. There was limited access to performance data related to the impact of the program beyond the individual borrower. However, the team attempted to understand the broader impacts of the program, including the impact that entrepreneurship is having at the community- and family-level (e.g., the multiplier effect), through interviews, Discussion Circles and a survey. Also, few scholarly articles discuss Indigenous entrepreneurship and business approaches in Canada and around the world, and the periodic surveys that do take place have small sample sizes.^{Footnote 4}

The evaluation team encountered challenges in reaching representative respondents to inform the evaluation, particularly through the survey. When the survey was first launched in September 2022, the responses received were primarily from Métis entrepreneurs and there was not proportional representation of First Nation and Inuit entrepreneurs to provide a full lens on Indigenous perspectives related to starting and sustaining Indigenous businesses. As a result, the survey was relaunched in November 2022 to enhance outreach to First Nation and Inuit entrepreneurs who have accessed the ATC program and, ultimately, to increase the response rate. This relaunch succeeded in expanding the reach and led to a higher number and broader base of participants, but Inuit entrepreneurs continued to be under-represented in the response. The outreach supports provided by NACCA, IFIs and MCCs encouraged a strong response; however, the response rate may have been affected by the approach to survey recruitment and collection as only online methods were used. This may have particularly posed an issue for entrepreneurs living in Northern, rural, or remote areas with limited broadband connection. Additionally, it is possible that not all IFIs/MCCs shared the invite to participate with their client base.

The evaluation team encountered challenges in gathering data and information to assess how the accessible the programs are to individuals across identity characteristics, and particularly those who are most marginalized. NACCA has introduced programs that are targeted to women and youth; however, it is more challenging to understand, for example, how two-spirited, Elders, those with disabilities and/or those from rural communities are accessing IEBD programs. This was largely attributed to the fact that most of the IFIs and MCCs provide character-based lending based on both their knowledge of the borrower, and the viability of the proposed business. In these cases, decisions are made based on business viability as opposed to how the applicant identifies. Additionally, the PSIB and ABO streams of the program collected limited data to support the assessment of access or impacts across any sub-groups of the population.

4.1 Key findings: Relevance

4.2 Key findings: Service Transfer

4.3 Key Findings: Effectiveness

Source: Survey of Indigenous entrepreneurs. Sample sizes for each impact vary, given that participation for each item was voluntary. The sample size of men ranged from 75 to 110 with an average of 95 responses per impact. The sample size of women ranged from 64 to 105 with an average of 90 responses per impact.

Text alternative for Impacts of Entrepreneurship

Impact Experienced	% of Sample in Agreement (Women)	% of Sample in Agreement (Men)
Sharing skills with community	75	78.9
Role modelling	77.4	81.4
Provide monetary contribution to community	73.8	76
Increased family income	73.2	80.8
Improved social supports within community	75.3	81
Improved mental health of self	81	84.8
Improved mental health of family	81.3	84
Improved life satisfaction of self	83.7	89.1
Improved life satisfaction of family	80.4	85.4
Enhanced community economic/social wellbeing	76.5	84
Hiring/training workers from the community	81.3	84

Despite the positive impacts of entrepreneurial activity that have been experienced, Indigenous entrepreneurs who participated in the evaluation survey identified numerous barriers that they face in pursuing entrepreneurial activity beyond access to capital, including balancing family and business responsibilities and the lack of options for microloans (see Figure 3). Initiatives funded by the Access to Business Opportunities program address some of these barriers to entrepreneurship, including building business acumen among Indigenous entrepreneurs and building the understanding of the business landscape.

Some examples of ABO funding distribution and impacts include:

• The annual Young Entrepreneurs Symposium, an annual event intended to build skills among young entrepreneurs and provide a space for networking.
• Funds for eight Indigenous women to attend the Values-Based Entrepreneurship Workshop hosted by Indigenous Fashion Week.
• The 2nd annual National Aboriginal Trust Officers Association Indigenous Women's Summit, which had 150 registrants.
• The Native Women's Association of Canada completed a feasibility study which determined that the best model for the Indigenous Women's Maker Space Pilot was an Elder-led drop-in crafting program enhanced by the other employment and entrepreneurship programs; this study informed development of future programming and larger scaling of the Native Women's Association of Canada's work.

However, the extent to which these initiatives advance entrepreneurship is unknown given the national scope of these funded initiatives.

Certain sub-groups of the Indigenous population face even further exacerbated barriers to entrepreneurship beyond access to capital. First Nation women entrepreneurs have identified barriers including: balancing familial responsibilities, lack of financial resources to invest in business due to lower average income and increased reliance on government transfers, sexism, and lack of knowledge and business training in financial literacy, business planning, regulations and management^{Footnote 20}. Of the entrepreneurs who participated in the evaluation survey, women were more likely than men to have experienced each of the listed barriers to entrepreneurship, while being less likely to have experienced the positive impacts of entrepreneurship. A significantly greater proportion of women (88%) agreed that the lack of options for microloans was a barrier to their entrepreneurial activity than men (76%), and a significantly greater proportion of women (81%) agreed that sexism was a barrier to entrepreneurial activity than men (42%). Although outside the scope of this evaluation, the evaluation team heard from NACCA and MCCs that funding initiatives specifically targeting Indigenous women are oversubscribed, and have seen numerous benefits for women, families, and communities. In alignment with the federal United Nations Declaration Action Plan 2023-28^{Footnote 21}, further work to address these barriers to entrepreneurship experienced by Indigenous women is a responsibility of ISC to advance self-determination and economic reconciliation.

Source: Survey of Indigenous entrepreneurs. Sample sizes for each barrier vary, given that participation for each item was voluntary. The sample size of men ranged from 64 to 107 with an average of 94 responses per barrier. The sample size of women ranged from 69 to 101 with an average of 86 responses per barrier.

Text alternative for Barriers to Indigenous Entrepreneurship

Faced	% of Sample in Agreement (Women)	% of Sample in Agreement (Men)
Sexism	80.5	42.2
Racism	73.8	65.2
Poverty	68.5	64.6
Location	59.5	73.4
Lack of options for microloans	87.8	75.5
Lack of community support	68.2	68.4
Lack of business infrastructure	63.3	60.2
Lack of awareness of business resources/training	81.2	77.6
Lack of access to business training	65.9	64.9
Inequitable access to education	57.6	56.2
Inability to attract qualified employees	74.7	79.3
Community infrastructure	58	52.9
Balancing family and business	88.8	82.4
Access to Capital	80.6	70.1

In addition, the ongoing impacts of colonization including lower education and income levels, inadequate social and health services, and higher rates of poverty on-reserve and in urban areas further limit the ability of Indigenous Peoples to build equity to invest into business opportunities^{Footnote 22}. Many Indigenous communities lack the infrastructure (i.e., adequate housing; business space; limited access to transportation, utilities, and Internet networks) to support business activities^{Footnote 23}. The infrastructure gap is further exacerbated by the proportion of financing tools (e.g., fees, public-private partnerships, short-term borrowing) that are tied to regulatory frameworks that do not exist on reserve^{Footnote 24}. These broader issues will continue to impact the success of Indigenous entrepreneurs and are not addressed by the current suite of programs.

Today, Indigenous Peoples represent the fastest growing segment of the population and have the potential to be a driving force of Canada's economy^{Footnote 25}. According to the Royal Bank of Canada, the number of Indigenous business owners is growing at five times the rate of non-Indigenous self-employed Canadians, and Indigenous women are starting businesses at twice the rate of non-Indigenous women^{Footnote 26}. Studies have projected a tremendous economic opportunity with growth projections of a $100 billion Indigenous economy by 2025; however, the percentage of Indigenous Peoples opening businesses remains below their relative composition in the workforce^{Footnote 27}. Achievement of the $100 billion Indigenous economy will require continued investments and supports that can respond to the ongoing barriers to entrepreneurship and evolving needs of Indigenous populations, including and beyond access to capital.

Finding 6: There is an ongoing need for targeted investments in pre- and post-care, as well as supporting Indigenous entrepreneurs in navigating the services available.

"We struggled with those at the lower end of the continuum. There is a need to support those who face greatest barriers e.g., northern, remote - lack of space and internet make it difficult to move business concept into business case for funding. We also need to help those up to the upper end of scaling up."
Source: ATC Staff

The evaluation found overwhelming agreement that Indigenous entrepreneurs need ongoing support to advance across the stages of business development (e.g., from a business idea to a proposal, to securing a loan, to establishing a business, to sustaining a business). Pre-care supports may include: challenging the business concept for viability and sustainability; guidance in writing the business proposal including basics in finance and business projections; and support in securing a loan from an IFI, MCC or a mainstream bank. While the majority of the IFIs and MCCs interviewed indicated they try to provide these types of support, they noted they have neither the resources nor the staff to meet the needs of their clients. Trainings for entrepreneurs are offered by various organizations, often focusing on how to write a business plan. However, training content is often varied and disparate without properly setting-up a budding entrepreneur for success to obtain funding from an IFI or MCC.

When asked about additional business supports that they would benefit from, respondents to the evaluation survey most commonly identified needs surrounding: financial support, business skills, training programs, and mentorship. Representatives of IFIs and MCCs shared that women and youth are often their clients who seek out mentorship and networking opportunities, but that additional factors (e.g., childcare) may need to be considered when providing training. Some representatives of IFIs and MCCs suggested that ABO funds could be used to support them in providing business supports; however, these funds are typically delivered to National Indigenous Organizations (e.g., Native Women's Association of Canada, Indigenous Tourism Association of Canada) in order to have a broader scope of impact across the country with the small amount of funding available. Programmatic data housed within ISC indicates that between 2015-16 and 2019-20, $25.5 million was provided to a mix of national, regional and local Indigenous organizations and communities through the ABO program^{Footnote 28}. Numerous projects funded by ABO during the years evaluated included stated program objectives in networking and mentorship to nurture knowledge sharing among entrepreneurs. While the ABO stream of the program intends to support organizations in addressing additional barriers to Indigenous entrepreneurship outside of financial capital, it is unclear the extent to which these initiatives advance entrepreneurship or filled the need for pre-care noted by evaluation participants. Interviewees from ABO described an anecdotal perception that the funded initiatives were meeting program outcomes (i.e., growing the capacity of Indigenous entrepreneurs); however, the requirements of final reports for funded projects do not systematically collect data to assess the fulsome impact of ABO funding. Therefore, assessments of impact are limited. Both IFIs and MCCs identified that they lack access to funding and supports for Indigenous businesses to grow^{Footnote 29}. The majority of IFIs and MCCs consulted indicated that they are challenged to provide post-care supports to their clients, which might include training in business finances and accounting, ongoing mentoring and guidance/support to grow the business.

Participants also identified challenges in navigating the services available to them and processes for accessing these services. In discussions with PSIB staff, a key challenge expressed in accessing government contracts is knowing how to navigate the federal procurement system and knowing where to start. As found in the evaluation survey, only 6% of respondents indicated being familiar with PSIB and 13% were aware of the Indigenous Business Directory; 7% had registered on IBD and only 0.4% had received a PSIB contract. Indigenous entrepreneurs who completed the survey most commonly reported "need training on process" and "unaware of PSIB" as barriers to participating in government procurement processes.

The disparate service offerings and difficult qualification processes serve as an additional barrier to Indigenous entrepreneurs. For example, this evaluation highlights two services that entrepreneurs can directly access to build their business (ATC, PSIB); however, regional development agencies, other federal agencies and private organizations offer additional options, which complicates the ability to understand and navigate the system of services available. An Indigenous Business Navigator position has now launched at ISC, which may support in mitigating this challenge. The navigator can be accessed by Indigenous businesses and owners, organizations, or communities to request support in finding and accessing the programs and services to meet their needs.

Finding 7: Efforts have been made to improve the inclusivity and reach of programs across distinctions, gender and age groups; however, more work is needed to reach equity in access. Limited data were available under PSIB and ABO to effectively assess broader diversity impacts.

"Access to micro lending under the Indigenous Women Entrepreneur Program is particularly important to Indigenous women. They often are the caregivers but are still interested in starting their own business. They often have small income streams but their work tends to focus on and leads to investments in communities. Their work is often geared to the care sector – geared around wellness. This gets me excited – participating in something that is deeper in application and resolve – bringing a caring perspective into the marketplace."
Source: MCC Representative

The evaluation found that there continues to be Indigenous populations underserved by the program. Very few representatives of IFIs/MCCs identified diversity and inclusion goals under the program beyond NACCA's programs targeting women and youth, which were only recently launched. Indigenous women experience additional social barriers that further exacerbate challenges to pursuing business ventures, including disproportionate responsibilities in the home and in providing childcare which limits their ability to work full time in their business^{Footnote 30}. Given the disproportionate amount of time women spend on unpaid domestic work and childcare compared to men^{Footnote 31}, there is evidence that entrepreneurship is advantageous to Indigenous women due to the flexibility awarded in running a business, such as the ability to make one's own schedule and accommodate caregiving responsibilities^{Footnote 32}. However, borrower profiles from NACCA and MCCs illustrate that men continue to make up the majority of the borrowers under the ATC program. NACCA has recently launched an Indigenous Women's Entrepreneurship program to provide support to Indigenous women pursuing entrepreneurial activity and address this need; MCC representatives expressed a desire for funding for a similar program to address the needs of Métis women and noted it would help strengthen the Nation-to-Nation relationship.

Borrower profiles under ATC also illustrated that youth (under 35) have made up a very small percentage of loan recipients since 2015 across the IFIs and MCCs. In two discussion circles, participants strongly recommended more integrated supports and resources dedicated to developing business knowledge and skills in youth. In addition, one MCC interviewee noted being able to provide a larger percentage of non-repayable funding to youth. NACCA recently partnered with Futurpreneur Canada to develop new programming targeted to youth, in addition to the ATC program.

Some entrepreneurs continue to be unable to access the ATC program, due to eligibility requirements. ATC staff and interviews with Métis entrepreneurs indicated that Métis entrepreneurs continue to be underserved and/or overlooked by the AEP programs, despite the distinctions-based transfer to MCCs and eligibility requirements stating that the program serves all Métis people. ATC staff confirmed that there are some Métis people who have faced challenges in accessing this program due to definitions of heritage or identity, and approval requirements related to geographical location and registration with a Métis organization. PSIB staff echoed barriers based on eligibility requirements, particularly for Métis entrepreneurs. Additionally, the expectation of full-time involvement of the applicant with the proposed business in the terms and conditions for ATC excludes important entrepreneurs, such as women operating side-hustle businesses.

Despite the growing proportion of Indigenous entrepreneurs in today's economy, in 2018 less than 2% of Indigenous businesses had majority Inuit-ownership^{Footnote 33}. For Inuit Peoples living in the North, the ATC-equivalent program is accessed through CanNor rather than through NACCA and IFIs. A few IFIs desire a closer working relationship with CanNor to best meet the clients' needs rather than being in competition with each other. Interviews with a few ATC and IFIs suggest that IFIs need to be located in areas closer to Inuit clients. Inuit do not have a representative organization who works directly with ISC to deliver the ATC program, which would be beneficial in advancing self-determination across distinctions and ensuring that the program meets the needs of Inuit entrepreneurs.

"We do not track across GBA+ or distinctions-based – and the procurement officers and buyers can't take this on, we already have Indigenous procurement, green procurement, accessibility – we don't have the capacity for this, there aren't resources to support it."
Source: PSIB Coordinators Focus Group

Although Budget 2019 announced an investment of $1.5 million over 5 years to support administrative data collection and reporting practices with respect to Gender-Based Analysis Plus, PSIB does not currently collect data related to identity characteristics of companies awarded federal contracts nor is recent program data available. Therefore, the evaluation was unable to assess the equitability of program access and impacts for all Indigenous Peoples. Similarly, ABO does not hold distinctions-based data, but can determine the general scope of projects that might address specific needs across identity characteristics. For example, a portion of ABO's 2019-20 funding supported the National Aboriginal Trust Officers Association's 2nd Annual Indigenous Women's Summit, and in 2018, ABO supported Pauktuutit Inuit Women of Canada in a project titled Connecting Urban Inuit Women with the Inuit Women in Business Network.

Finding 8: Further reform to PSIB is required to prepare and encourage Indigenous entrepreneurs to participate in government procurement and to ensure the federal government meets its 5% target. The process to modernize Indigenous procurement has not taken a distinctions-based approach to meet the needs for First Nation, Inuit, and Métis Peoples.

"There is a need for Indigenous Peoples to actively participate in economic activity to level out the playing field and ensure that the businesses are free and able to compete for federal contracts."
Source: NACCA Interview

Despite existing for over 20 years, involvement with PSIB and registration on the Indigenous Business Directory continue to have limited uptake. In 2018, there were over 37,000 Indigenous-owned businesses in Canada providing goods and services in all sectors of the economy, but under 2000 were actively registered on the Indigenous Business Directory in April 2023^{Footnote 34}. The annual dollar value of contracts awarded to PSIB-certified businesses increased each year between 2015 to 2018, from $93.5 million (0.47% of federal expenditures) to $170.6 million (1.03% of federal expenditures); however, the 5% target remains unmet^{Footnote 35}. Among Indigenous entrepreneurs who completed the evaluation survey, participation in PSIB was very low (2%), and no participants who had competed for a federal contract were women. Additionally, only 13% of the survey respondents were aware of the Indigenous Business Directory, and of those, only 50% had registered. However, a lack of knowledge of PSIB or its processes is only one barrier Indigenous entrepreneurs face in procuring with the government. Systemic racism and tokenism towards Indigenous Peoples affect their ability to contract with all levels of government; for example, there are assumptions that Indigenous businesses are high-risk, lack capacity, and provide a lower of quality of work^{Footnote 36}. Stereotyping and discriminatory narratives regarding Indigenous businesses also cause some Indigenous business owners to opt not to self-identify as Indigenous.

In 2017, ISC launched the Indigenous Procurement Modernization Initiative which included extensive online and in-person consultations^{Footnote 37}. The review conducted as part of the PSIB modernization efforts in 2018 found:

• The volume, scope and depth of federal procurement opportunities available to Indigenous businesses is low; the majority of set-asides are concentrated from a handful of departments;
• The federal procurement process is difficult to navigate, and the outreach and training strategies do not meet the needs of Indigenous businesses at various stages of development;
• The bidding process is arduous and time-consuming with no guarantee that there will be a return on time invested, and causes some businesses to opt not to contract with the federal government;
• Eligibility criteria for registering in the Indigenous Business Directory was a barrier;
• An up-to-date comprehensive Indigenous Business Directory housed outside of government is required;
• Enhanced performance reporting is needed to drive results; and
• The decentralized approach to federal procurement limits government-wide implementation.

In 2021, ISC announced changes to make PSIB more responsive to Indigenous entrepreneurs and businesses as a result of the modernization initiative, including reducing the minimum number of Indigenous employees required for a business to qualify on PSIB. Engagements with Indigenous participants in modernization discussions provided numerous recommendations to improve participation in federal procurement, including: unbundling large procurement contracts; requiring subcontracting opportunities on large projects; matchmaking services to encourage partnerships and joint ventures; providing Procurement Readiness training; and requiring Indigenous Benefit Plans in all major procurement processes at the conception stage. Progress on the aforementioned recommendations was unclear at the time of evaluation. Further engagements with Indigenous Partners should be ongoing beyond developing modernization policy.

As a result of a 2019 Directive^{Footnote 38}, it is now a mandatory Treasury Board policy requirement that Inuit firms receive preferential treatment for government contracts in the Nunavut Settlement Area^{Footnote 39}. The Directive arose in part from Article 24 of the Nunavut Land Claims Agreement and illustrates the Government of Canada's commitment to establish procurement policies that respect Inuit firms for all Government contracts and leases in the Nunavut Settlement Area. While Article 24 and the 2019 Directive differ from the 5% mandate regarding PSIB, some lessons learned could apply to PSIB Modernization, particularly given that the 2019 Directive was a collaborative initiative with an external partner. At minimum, the existence of the 2019 Directive illustrates that the pan-Indigenous approach to federal procurement does not work when products and/or services occur specifically in First Nation communities, Inuit communities, and/or Métis settlement areas^{Footnote 40}. In fact, some participants of PSIB modernization engagements argued that a distinctions-based approach to procurement is required given the vast differences faced by First Nation, Inuit, and Métis entrepreneurs, including differences based on geography, self-government, and culture^{Footnote 41}. A distinctions-based approach to PSIB modernization also reflects Justice Canada's Principles Respecting the Government of Canada's Relationship with Indigenous Peoples, which are rooted in the rights that are recognized and affirmed in Canada's Constitution, as well as the federal commitment to reconciliation^{Footnote 42}. Further, as has been argued by the Canadian Council for Aboriginal Business, federal Indigenous procurement policies should acknowledge that all of Canada rests on traditional Indigenous territories and thus all major procurement projects in Canada, regardless of location, should include Indigenous participation^{Footnote 43}.

More recent data on PSIB, particularly following the modernization efforts and implementation of the 5% requirements for federal set-aside spending for Indigenous procurement were not available at the time of evaluation, indicating that the program is unable to collect and report on PSIB progress and impact in a timely way. In addition, it is not possible to know how many contracts should have been set aside through the PSIB. There are numerous procurement options that count towards PSIB that are underused, but could greatly increase Indigenous participation in the system and progress towards the 5%, including sub-contracting, non-competitive processes, and sole-source contracts. PSIB coordinators recommend the program undertake more audits to ensure compliance with the 5% Indigenous procurement target, regularly report on departmental performance and provide an annual briefing to the Minister on the progress towards the 5% Indigenous procurement target. Importantly, the target of 5% was set based on the calculation in the 2016 Census that nearly 5% of the Canadian population is Indigenous; however, as the Indigenous population continues to grow the 5% goal should serve as a minimal starting point rather than a final goal. A new appendix to the Directive on Management of Procurement took effect on April 1, 2022, and illustrates mandatory procedures to advance the 5%, which is to be met or exceeded by all federal departments no later than the end of fiscal year 2024-25^{Footnote 44}. It is anticipated that the requirements of the new Directive, which includes detailed reporting requirements, will address the recommendation from Procurement Coordinators to enhance performance monitoring towards the 5% target on a more timely basis than was found in the scoping years covered by this evaluation.

The PSIB coordinator role across departments is not staffed consistently, is a voluntary addition to the employee's substantive job requirements, and is accompanied by limited onboarding and training. Responsibilities range from reporting to coordinating, communications, and outreach. The role is typically taken on by staff below Director-level; the focus group with PSIB Coordinators noted that, given their level in the organization, they have little clout or ability to influence real change in the department/agency. The Canada School of Public Service and the Treasury Board Secretariat are looking to create more cultural awareness training for procurement staff, and PSIB staff indicated they are in the process of developing training workshops for the coordinators; however, PSIB Coordinators recommended that the Coordinator role be more formalized, better integrated and supported by additional resources. The cultural competency training should become mandatory for all procurement officers and PSIB Coordinators to maintain consistency.

"We are trying to balance our primary role with the PSIB Coordinator responsibilities. It has been a difficult relationship. We don't necessarily know who the other procurement officers are, so when we can't get help from ISC, and then we can't even help each other, we are at a loss... The coordinators are often the only folks in their respective Departments with any information on Indigenous procurement – so if they switch jobs that talent and knowledge is totally lost."
Source: PSIB Coordinator

Finding 9: The current logic model does not reflect outcomes relevant to Indigenous entrepreneurs. Inconsistent program data limit the ability to assess the broader impacts of the programs.

The Performance Information Profile for IEBD includes all three program streams, and represents the data that programs agreed to collect on program performance. Program staff consulted agree that the Performance Information Profile needs to be updated with a balanced focus on ATC with more relevant key performance indicators. The IEBD Performance Information Profile is primarily focused on PSIB, IFI capacity and output measures such as the number of businesses created and percentage of non-government funding in Indigenous communities. These measures are not inclusive of equity measures nor highly relevant to what the Indigenous lenders or Indigenous entrepreneurs see as the potential impact of these programs or of their entrepreneurial activity more broadly. For example, while it is generally agreed that the program has been successful at providing Indigenous businesses and entrepreneurs with access to affordable loans, a few ABO and ATC staff indicated that program data does not measure or look at what those loans have achieved. Additionally, when asked how they define entrepreneurial success, Indigenous entrepreneurs who completed the evaluation survey most commonly listed: being profitable with the potential to grow; autonomy and independence in work that I am passionate about; able to support family and community; and achieving work-life balance. Of importance is moving beyond output measures to measurement of how culturally-relevant these programs are, and the broader socio-economic impact that program funding is having on Indigenous businesses, business owners, their families, and their communities. Few data sources exist in Canada to profile Indigenous entrepreneurship, and many of the periodic measures that do exist have limited sample sizes, focus on self-employment, and do not survey on-reserve business including community-owned social and economic enterprises. As such, it is critical that the performance framework employed within the program is reliable, consistent, and a fulsome assessment of Indigenous entrepreneurship and its impacts.

"We need to put the words to it, we need to document it, we need to have the data – who are we reaching and where are the gaps… and this should inform future engagements on how best to meet these needs."
Source: PSIB Staff

Representatives of both ATC and ABO suggest that the program has a primary focus on measuring economic outputs, such as default rate and number of businesses created, whereas Indigenous businesses have social and economic objectives. Two IFI discussion circles noted the challenges they encountered in measuring success from their investments in Indigenous business and indicated a desire for improved data. Although NACCA has developed their own performance measurement framework with outcomes more relevant to their community, the funding agreement with ISC requires adherence to the federal performance framework. It was further noted across sub-programs that the program is not collecting information on how it is helping to reduce barriers for women, youth, or those living in northern/remote communities. Program staff and representatives from NACCA and IFIs identified a lack of data in numerous areas of importance, including:

• profile of the type of borrowers beyond gender and region (i.e., including the 2SLGBTQI+ community, people with disabilities)
• ability to generate income and wealth
• social impact indicators (e.g., impact on the community, family and persons such as investments back into the community, land-and cultural-based healing, ceremonies, crafts and art)
• differential impact of microlending for women and Métis entrepreneurs
• demand for and utilization of pre- and post-care supports
• job creation
• vacant positions in lending organizations
• number of Indigenous businesses in operations over time
• amount of capital utilized in the business landscape
• actual vs budget spending
• other sources of funding leveraged by the IFIs and MCCs including provincial and private sector lenders

Across program streams, enhancements to the program's performance monitoring will ultimately require resources to create and manage such reporting frameworks and analyses. PSIB coordinators indicated they have limited capacity across the network to track diversity-related data A few PSIB staff recommended the development of a comprehensive performance measurement framework that tracks not only the number and dollar value of PSIB contracts, but also the value of indirect benefits. These interviewees indicated that this would require better and sustained information sharing between federal departments/agencies and Indigenous partners. The recent PSIB modernization efforts include the implementation of new reporting requirements.

4.4 Key findings: Efficiency

Relevance

Finding 1: The programs align with economic reconciliation and self-determination, which supports the wellbeing of Indigenous Peoples, and in turn, supports families and communities. The transfer of the delivery of the ATC program to Indigenous-led organizations is aligned with both Indigenous and federal priorities and is viewed positively by the Indigenous Peoples who were consulted.

Service transfer

Finding 2: The transfer of the ATC stream from ISC to NACCA and to the MCCs went well and the relationships between the Indigenous partner organizations, and between Indigenous entrepreneurs and IFIs/MCCs, are positive.

Finding 3: The transfer of the ATC program is limited to only grants and contributions and does not include foundational aspects such as program design, expected outcomes, and performance monitoring. Further work is required to fully transfer control of the ATC program and the remaining IEBD streams to Indigenous-led organizations.

Effectiveness

Finding 4: ATC has helped to create a network of sustainable Indigenous-led lending institutions; however, IFIs and MCCs continue to face challenges with retaining skilled employees in a competitive market.

Finding 5: The IEBD programs are having a positive impact on Indigenous entrepreneurs, which in-turn, is perceived to positively impact Indigenous individuals, families, and communities. Barriers to entrepreneurial success faced by Indigenous Peoples are beyond what is addressed in the current suite of programs.

Finding 6: There is an ongoing need for targeted investments in pre- and post-care, as well as supporting Indigenous entrepreneurs in navigating the services available.

Finding 7: Efforts have been made to improve the inclusivity and reach of programs across distinctions, gender and age groups; however, more work is needed to reach equity in access. Limited data were available under PSIB and ABO to effectively assess broader diversity impacts.

Finding 8: Further reform to PSIB is required to prepare and encourage Indigenous entrepreneurs to participate in government procurement and to ensure the federal government meets its 5% target. The process to modernize Indigenous procurement has not taken a distinctions-based approach to meet the needs for First Nation, Inuit, and Métis Peoples.

Finding 9: The current logic model does not reflect outcomes relevant to Indigenous entrepreneurs. Inconsistent program data limit the ability to assess the broader impacts of the programs.

Efficiency

Finding 10: Investments in the IEBD program have not evolved with inflation nor the growing population of Indigenous Peoples and Indigenous businesses and are not expected to be sufficient to meet the needs of the growing Indigenous population.

Finding 11: The system moved quickly to respond to the needs of Indigenous entrepreneurs and businesses. The large funding envelope that was allotted to support businesses through COVID-19 had a significant impact on the reach of the program.

These findings demonstrate that in many ways the IEBD suite of programs is relevant, effective and efficient. The programs remain relevant to federal priorities and are aligned in positive ways with the goals and interests of Indigenous Peoples, and demonstrable progress has been made towards service transfer. The programs have had positive effects at the individual and community level and rapidly respond to needs of entrepreneurs and businesses. A particularly impactful and significant example of this was support through the COVID-19 pandemic, notably including a larger funding envelope.

There remain, however, several areas in which the programs could be improved. Barriers and limitations exist regarding full service transfer and retaining skilled employees, in addition to ease of program access, particularly for distinctions, gender and age groups. The program logic model fails to capture outcomes relevant to Indigenous entrepreneurs, and a dearth of relevant data makes it difficult to fully assess outcomes. Targeted investments in certain areas such as pre- and post-care, in addition to an increased funding envelope, continue to be significant needs of entrepreneurs, business owners, and program staff.

In response to these findings, several recommendations are provided in the following section, relating to service transfer, achieving and measuring program outcomes, and financial and human resources.

6.1 Service transfer

1. ISC is recommended to engage First Nation, Inuit and Métis Partners to explore options to transfer the full IEBD program, including the Indigenous Business Directory and the ABO stream of funding.
   1. It is recommended that ISC work with First Nation, Inuit, and Métis Partners to fully transfer the ATC program, including the design, delivery, eligibility, and reporting of results on a distinctions-basis.

6.2 Achieving and measuring program outcomes

2. ISC is recommended to engage First Nations, Inuit and Métis Partners of all program streams to develop an approach to further reduce barriers to entrepreneurship, including by broadening program access for Indigenous Peoples who are harder to reach, and/or face exacerbated barriers to the pursuit of entrepreneurship.
   1. ISC is recommended to engage First Nations, Inuit, and Métis Partners of all program streams to consistently support pre- and post-care for Indigenous entrepreneurs.
   2. ISC is recommended to explore and employ distinctions-based strategies to procurement modernization to ensure that the federal procurement process is equally accessible to First Nations, Inuit, and Métis businesses.
   3. ISC is recommended to perform ongoing monitoring of the adjustments resulting from the modernization initiative to ensure that adjustments prove effective.
3. It is recommended that ISC co-develop with First Nations, Inuit and Métis Peoples a new program logic model and performance measurement framework that contains broader outcome measurements supported by Indigenous Partners.
   1. It is recommended that ISC collaborate with internal and external partners to expand and employ Gender-Based Analysis Plus to their data collection, analysis, and sustainable targeted approaches meeting the needs of diverse groups.

6.3 Financial and human resources

4. It is recommended that ISC explore options to increase the funding envelope under IEBD, allowing for greater reach, impact, and transparency.
   1. It is recommended that ISC work with ATC partners to explore long-term funding mechanisms that will better support the sustainability of IFIs and their ability to deliver developmental lending.
   2. ISC is recommended to work with First Nations, Inuit, and Métis Partners to explore targeted approaches and better leverage existing approaches to support IFIs/MCCs in retaining skilled employees.
5. It is recommended that ISC standardize the PSIB Coordinator role and provide ongoing centralized support to the PSIB Coordinator Network. This support may include ensuring Coordinators have sufficient onboarding, training, and capacity to perform the functions of this role, and there is a consistent and transparent line of communication between ISC and the Network of Coordinators.

Ultimate Outcome

• Creation and/or Expansion of Indigenous businesses.

Intermediate Outcomes

• A sustainable network of Aboriginal Financial Institutions.
• Indigenous businesses win procurement contracts.

Immediate Outcomes

• Aboriginal Financial Institutions have the capacity to deliver business capital and support services.
• Indigenous businesses are competing for federal Procurement Strategy for Aboriginal Businesses set-asides.
• Public and private procurement/ business strategies and partnerships are implemented.

Outputs

• Contribution agreements.
• Capital pools for Indigenous business development are established and expanded.
• Operational support, training and awareness sessions, promotional materials development.
• Public and/or private agreements and strategies are developed.
• Businesses registered in the Aboriginal business directory.

Activities

• Provide funding support.
• Develop cooperation agreements with key stakeholders and partners.
• Promotion, advocacy, and training.
• Identify procurement opportunities and business capacity.

Input & FTEs

• $46.3 M/year (average over 5 years).

Target Population

• First Nation, Inuit and Métis business owners and entrepreneurs.

Relevance

1. Do the programs address the needs and priorities of Indigenous businesses and entrepreneurs, including First Nation, Métis, Inuit, Indigenous women and youth entrepreneurs?
2. Are the programs consistent with federal priorities and mandate?
3. Do the programs support the well-being of individuals, families and children, and communities?
4. To what extent do the programs advance ISC's mandate to advance self-determination and the transfer of care and control of ISC-funded programs to Indigenous partners?
5. Do the initiatives align with or contribute to federal and/or First Nation, Métis and Inuit priorities on gender equity?

Effectiveness

6. To what extent have the programs contributed to:
   1. The creation or expansion of Indigenous businesses;
   2. A sustainable network of Aboriginal Financial Institutions who have the capacity to deliver business capital and support services;
   3. Indigenous businesses compete for and win procurement contracts; and
   4. The implementation of public and private procurement and business strategies and partnerships?
7. Have there been any unexpected outcomes (positive or negative), lessons learned or best practices?
8. How effective and productive are the relationships between program partners?
9. How effective and efficient was the transfer of capital programs to program partners?
10. What are the consistent successes that have been generated by the program's support?
11. Do the programs provide equitable access to all Indigenous businesses and entrepreneurs across all regions? If no, what are the barriers and how could they be addressed?

Program and Process efficiency

12. Can program outcomes be achieved with the current suite of initiatives and/or resources available?
13. Are the current funding models the most efficient way to achieve project outcomes?
14. Are there practices or innovations that could make program delivery more efficient?
15. To what extent does available data allow for the assessment of program performance?
16. How could the programs be improved to foster inclusivity using an intersectional lens?

Early Impacts of the COVID-19 pandemic

17. How has the COVID-19 pandemic affected IEBD programs (i.e. effects on planned activities)?
18. How has federal emergency COVID-19 funding been utilized within IEBD programs?

Interview consultations

Interviews were undertaken with ISC program staff and representatives of NACCA and the MCCs, as follows:

• ISC Staff interviews (n=21):
  • ATC (n= 7)
  • ABO (n= 6)
  • PSIB (n= 8)
• Interviews with representatives of NACCA/MCCs/IFIs (n= 13)

Discussion circles

The Discussion and Sharing Circles targeted small group engagements and were meant to be a positive way of understanding and honouring the stories and experiences of participants, communities and organizations – focusing on strengths, requirements, as well as social and structural issues underpinning the conditions for Indigenous Peoples as they relate to Indigenous led businesses and entrepreneurship.

Discussion Circles were organized to allow for more in-depth discussion and sharing of experiences on the programs and their impact. The following Discussion Circles were conducted:

• Representatives of IFIs and MCCs = 5 sessions (14 people total)
• PSIB Coordinators = 1 session (7 people)

Survey of program users

Indigenous entrepreneurs involved with the program since 2015 were invited to complete an online survey regarding a) entrepreneurial activity; b) existing and necessary supports for entrepreneurs; and c) experience with programs and services for entrepreneurs funded by ISC. Outreach emails were sent by IFIs and MCCs to their respective contact lists to garner participation. In total, the survey had 441 respondents. A detailed breakdown on the respondent profile follows: