Starting a business in Nunavik: it’s tough, but there’s support from KRG

Some KRG councillors say the region could use its own chamber of commerce, to help support and speak on behalf of Nunavik businesses. (PHOTO BY SARAH ROGERS)

INUKJUAK — Most Nunavimmiut will agree — doing business in the region is tough.

That’s why the Kativik Regional Government wants Nunavimmiut to be aware of the financial support available to business people in the region

“There are pros and cons of starting to grow a business,” said Adel Yassa, head of the KRG’s department of regional and local development.

“The size of the market in Nunavik is very small. Just the cost of securing a space, and then heating and electricity is very high,” Yassa told regional councillors in Inukjuak May 25.

“You have to have a volume and a revenue to cover those expenses.”

The good news, Yassa says: there are more and more innovative approaches to business emerging in the region, from accomplished seamstresses to food production and transformation projects.

And the KRG can access various places to provide help:

• the Inuit Business Development Fund offers a maximum of $20,000 towards the establishment of businesses along with research and development projects;

• the Quebec-funded Makigiarutiit I and II (now consolidated) Fund offers a maximum of $150,000 in loans, contributions and /or investments in Nunavik business or social economy enterprises. The maximum contribution for projects promoted by women and youth is 50 per cent of eligible costs;

• the Makigiarutiit III Fund offers up to $500,000 towards business development, job consolidation and entrepreneurship for women and youth; and,

• the Kativik Local Development Centre manages an entrepreneurship support fund to pay for feasibility studies, market surveys, product development and business start-up;

The Nunavik Investment Fund, which has been scaled back in recent years, continues to operate and provide loans to Nunavimmiut businesses, although it operates separately from the KRG.

Unlike Makigiarutiit, the NIC finances working capital and offers lines of credit to businesses — from $150,000 to $250,000 for community-owned business ventures.

The fund also has a new Kuujjuaq-based manager, George Berthe, who will be ready to start taking inquiries mid-June, said Yassa, who sits on the fund’s board of directors.

But despite the support available to Nunavimmiut business people, economic development officer Eliassie Nowkawalk told KRG councillors he is seeing a drop in the number of regional businesses.

The KRG does not compile statistics on Nunavik’s businesses, and could not confirm if there has actually been a decrease in numbers.

There are sectors that do better than others in the region, Yassa said, including transportation and services provided to mining companies.

In the communities, retail business has also done well in Nunavik, he said. As an example, Yassa points to Kuujjuaq grocer Newviq’vi, which recently tripled its square footage, and Mark Kakayuk’s general store business in Salluit, which he’s operated in this Hudson Strait community since the 1980s.

But some regional councillors say that, regardless of how high the demand is, the high rate of municipal tax paid in Nunavik creates a huge barrier to getting into business.

”People are suffering from the high cost of municipal taxes in the region,” said Jennifer Watkins, a Kuujjuaq regional councillor. “It’s preventing people from opening businesses and buying their own homes.”

There are no options to reducing those taxes, however, say KRG administrators, without revisiting the Kativik Act.

In the meantime, KRG executive member Mary Pilurtuut suggested the region look at launching a chamber of commerce to offer better support to Nunavik businesses.

At the KRG, Yassa said his department has already been approached by a number of Kuujjuaq-based businesses who are also interested in such a venture.

The KRG would be willing to help fund the creation of a chamber of commerce, said Yassa, who estimates such an organization would need about $35,000 to start up.

The challenge would be securing membership from across the region and money to keep the organization going over the long term, Yassa said, although he agrees a chamber of commerce would provide a strong voice to Nunavik businesses.

“The chamber of commerce could exert some pressure on behalf of these groups,” he said.