Kitikmeot loan agency struggles with lack of capital, untrained economic development officers

CAMBRIDGE BAY — Being far away from Iqaluit takes a toll on a small government-funded agency like Kitikmeot Community Futures Inc., which is supposed to loan money to Kitikmeot businesses that can’t qualify for loans from banks or other private lenders.

Manager Marg Epp said “life would be easier” for KCFI — and for business development in the region — if its office were not located more than 2,000 kilometres and two days air travel time from the territorial capital.

If Epp were in Iqaluit, she would be minutes away from the federal government’s agency, CanNor, and the Government of Nunavut’s Department of Economic Development and Transportation, which together hold the KCFI’s purse-strings.

In Iqaluit, Epp would be able to lobby face-to-face for what KCFI really needs: more working capital to provide loans to businesses in the Kitikmeot and more stability among the region’s economic development officers.

Instead, she’s far away, and Epp gets offers of more money from the GN for the organization’s operating budget when what the KCFI really needs are more stable economic development officers in the hamlets and more money to loan out to the region’s businesses.

As it stands now, the KCFI has only about $17,000 left to lend, with one loan request for about $100,000 which can’t be met due to a lack of money.

Epp said the organization really needs at least $1 million, because loan requests are usually for more than just a few thousand dollars.

This year, the KIFC made three new loans totalling $405,630. There are also two loans that have been paid off, Epp said at the KCFI’s Sept. 30 annual general meeting in Cambridge Bay.

“All are in good standing,” Epp said in her report to the AGM.

Because the KCFI lacks money to hand out as loans, it’s often easier for a new business to get a grant from another business-development group — with no payback required — than to borrow money, she said.

The KCFI started up in 2007 as the successor to the troubled Kitikmeot Business Development Centre.

After collapsing nearly 10 years ago, the old KBDC was put under the wing of another troubled organization the Nunavut Business Credit Corp.

The KCFI now has its own office, located in the back of the Arctic Islands Lodge.

Epp tries to get word out to potential clients by word-of-mouth, brochures and a kiosk at Cambridge Bay’s trade fair.

While the KCFI can’t loan money now — because it doesn’t have enough money— the agency does provide business counselling and may look at offering bookkeeping services and training, Epp said.

In addition to its financial and organizational challenges, the KCFI also suffers from the constant rollover of economic development officers in communities, who should act as the agency’s link to local businesses in the Kitikmeot.

The Kitikmeot would probably be better off with one economic development officer hired to work under the GN rather than an EDO for each hamlets,delegates at the AGM suggested.

They said EDOs, who are hired by the hamlets with money from the GN, are often little more than “warm bodies in a chair,” who often lack the skills to do the job.

As soon as they find a GN job with better benefits, they leave. And some EDOs also get frustrated with a business environment where the biggest business is government.

Jim McEachern, Cambridge Bay’s EDO, has only been working in the community since June— and he’s the longest-serving EDO in the region.

During his two years as the senior administrative official in Kugluktuk, Derrick Power, the KCFI vice-president who now manages the co-op in Kugluktuk, said he saw more than two EDOs pass through the hamlet.

As well, the money that hamlets get to fill the EDO positions doesn’t cover all expenses and benefits connected with the job.

That’s why Kugaaruk has refused to accept the money altogether and has no EDO at all.