The federal government and Canada’s biggest banks are partnering to provide a combined $221-million over four years in credit and services for Black entrepreneurs to address systemic barriers to success.
The backbone of the Black Entrepreneurship Program will offer better access to capital, with Ottawa committing up to $33.3-million for loans worth between $25,000 and $250,000. That money comes in conjuncture with a combined $128-million in commitments from the Big Six banks and the Vancity and Alterna Savings credit unions.
The first program of its kind in Canada, it will also include up to $53-million for Black-led business organizations to build a better ecosystem of support for business owners through mentorship, financial-planning services, business training and funding access. A $6.5-million Black Entrepreneurship Knowledge Hub, run by Black community and business organizations, will serve as a data-collection organization to identify barriers to success.
“Our challenge is about systemic racism and lack of access to capital because of our skin,” said Nadine Spencer, the president and chief executive of the Black Business Professionals Association in Toronto, in an interview Wednesday. The association was one of several groups that helped Ottawa structure the new program, including The Canadian Black Chamber of Commerce, Groupe 3737, Côte Des Neiges Black Community Association, and Nova Scotia’s Black Business Initiative.
Prime Minister Justin Trudeau announced the Black Entrepreneurship Program at Hxouse, a creative incubator in Toronto backed by pop star The Weeknd. “We never felt like we had a seat at the table, and society hasn’t been trained to address us equally, and for the first time in my lifetime … we have a chance to level the playing field, to make it fair," Hxouse co-founder Ahmed Ismail said in an interview.
Access to capital has long been a problem for Black entrepreneurs. Research from the Kauffman Foundation, a non-profit focused on entrepreneurship, found in 2016 that Black business owners were nearly three times more likely than white entrepreneurs to have difficulty achieving profit because of issues accessing funds. The cost of capital also disproportionately affected their profitability.
Rustum Southwell, the Black Business Initiative’s interim CEO, said that access to capital is only part of the equation. “The money is important, but the management skills, the ideas, the tenacity is important,” he said.
“We got together and presented a proposal to government and said, ‘This is where we need your support,’ ” said Ms. Spencer, who is also CEO of the marketing and communications agency BrandEQ Group Inc. She described the organizations' proposal as a “nothing for us without us” strategy: “When you build these programs, it has to be through a Black lens.”
Mr. Trudeau was joined by Small Business Minister Mary Ng and Parliamentary Black Caucus chair Greg Fergus at Hxouse Wednesday, a week and a half after the incubator launched its own series of programs to further the careers of creative Black Canadians that will soon be expanded with programs for Indigenous creative workers and other creative workers of colour. “For the first time ever, governments have acknowledged the miscalculations in the past in supporting [Black, Indigenous and people of colour] entrepreneurs,” said Mr. Ismail of Hxouse.
Mr. Trudeau said he hoped the Black Entrepreneurship Program could help thousands of entrepreneurs to recover from the COVID-19 crisis and to expand their businesses. “An investment in Black excellence is an investment in economic empowerment,” Mr. Trudeau said.
“Economic empowerment is justice. It’s justice against a system that has locked out far too many Black entrepreneurs, and denied them the same opportunities as other Canadians.”
The pandemic has illustrated the inequalities that disproportionately hurt Black Canadians, Mr. Trudeau said, adding it underscored the need to restart the economy in a way that allows Canadians an equal chance to succeed.
Mr. Fergus called Wednesday’s announcement historic. While noting it does not eliminate systemic discrimination and the consequences in one fell swoop, he called it a positive step forward.
“It is a way for Black Canadians to tell a different story to non-Black Canadians about what we want to do, a prosperity we want to create, the opportunities that are before us,” he said. “Now we have the means to do this. It is also an opportunity for the Black community to tell ourselves a different story; that we are economic actors.”
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