Kitikmeot businesses feel pinch from inflation, supply chain woes, regional lender warns
Community Futures director calls for ‘creative way’ to help businesses cope with pandemic and emerging economic challenges
A photo of Cambridge Bay, the Kitikmeot region’s largest community. Businesses in the region are struggling to build revenue in part due to the COVID-19 induced supply chain delays and rising inflation, KCFI executive director Marg Epp said. (File photo)
Global supply chain issues and rising inflation are hitting Kitikmeot businesses particularly hard, says Marg Epp, executive director of Kitikmeot Community Futures Inc.
In the western Nunavut region, which relies on shipping from the sealift for its goods, costs and delays are exacerbated, Epp said.
“You hear about the global delays [in shipping] all the time on the news. Well it affects us even more so, because you only have one shot at getting stuff up here,” she said.
Inflation in Canada hit an 18-year high in October, according to Statistics Canada. Meanwhile, global shipping times are expected to continue to lag throughout 2022, partly due to shipping companies cutting their schedules in response to the COVID-19 pandemic.
Epp said that she has been told that, for example, getting a window that cost $400 a few years ago can now cost as much as $1,200. On top of that, delivery delays make starting a project difficult.
“You have a project [as a business] and you can’t get the window for eight months, well now you’re not going to get the revenue for that project,” she said.
The KCFI helps distribute economic development money from the territorial and federal governments to Kitikmeot businesses, in the form of grants and loans. It also offers services like bookkeeping for local businesses.
If businesses in the region are going to take on more loans, that debt has to be manageable, Epp said.
“The businesses aren’t looking for handouts,” she said. “But they need some kind of creative way of getting helped through this [pandemic] while they are very low on revenue.”
One solution, Epp said, would be to treat Kitikmeot businesses a bit more like farmers are treated in the south.
She points to a program offered by Farm Credit Canada, which gives farmers cash advances in order to afford growing their crops. Something similar could be offered to Kitikmeot businesses, which could receive money upfront to pay for sealift costs, then repay the money once the business has grown revenue.
The KCFI will be negotiating with the Canadian Northern Economic Development Agency and the Government of Nunavut’s Department of Economic Development and Transportation on future funding programs like the regional relief and recovery fund, Epp said.
Epp added that any solution needs to recognize that COVID-19 is no longer a short-term challenge as businesses in the North will still face pandemic related challenges in building revenue going into 2022.
“We need to focus on the recovery. But we need to focus on the long-term economic recovery.”
Hey, if businesses get some money for sealift costs upfront until they earn the revenue, how about individuals get money for sealift costs upfront until they realize the savings?
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The poor get poorer because of their lack of capital. They buy a 2-pack of toilet paper for $6 ($3 each) at Northern because they only have $10 to their name, whereas others buy multiple 40-packs at $20 ($0.50 each) to be included in their multi-thousand dollar sealift. Such is a poverty trap.
Well spoken, y’all
I find it odd how organizations like kcfi are concerned about construction companies meanwhile the construction companies mostly rely on government contracts or private contracts in order to operate making hundreds of thousands or millions a year in profits. wouldn’t a construction company normally just include things like shipping cost into their bid ?
KCFI Doesn’t sound very well educated on business stuff the more they talk the more it seems like they just like to hear their own voice. Perhaps they should shift their focus towards helping other types of businesses that actually need the financial help unless this is just another popularity thing. KCFI ISNT DOING ANYTHING FOR THE KITIKMEOT.
For sure you are correct “Who’s knows”; I’ll bet the farm that an audited list of KCFI’s accomplishments over the past sixteen years will be extremely, extremely, extremely short
KCFI concerned with construction companies? Not how I interpreted it. The windows bit was merely used as an example about supply chain issues and inflation—you know, the main point of the article?
Scanning their website/socials it appears as if they do quite a bit for small and medium sized businesses across the region. In other words, KCFI IS DOING SOMETHING FOR THE KITIKMEOT.
“I’s knows”: please enlighten us with names of Kitikmeot organizations that have been assisted by KCFI over the past sixteen years, and the nature of that support
There are no names – like this comment section, “S” – but reviewing their info easily found online they seem to be helping Kitikmeot more than you and “Who’s knows” let on. Surely if info is in their annual report it’s been audited so feel free to read it. Outside of Kitikmeot-wide loans, it appears as though they also offer basic accounting courses, advisory and mentorship, free job search/resume writing centre, bookkeeping for non-profits and other community betterment initiatives. Not bad for an ‘extremely, extremely, extremely short’ list of accomplishments, eh?
KCFI concerned with construction companies? Not how I interpreted it. The windows bit was merely used as an example to highlight supply chain issues and inflation—you know, the main point of the article?
Scanning their website/socials, it appears as though they do help small and medium sized businesses across the region. In other words, KCFI IS DOING SOMETHING FOR THE KITIKMEOT.
Kugluktuk has never , in its glory days before this coronavirus epidemic, seen or heard of such organization! What a rip off for us kitikmeot inuit. Free money to be had under the table
*pandemic
They give out loans with higher interest than banks, do daycares books, take chances on businesses banks wouldn’t touch, if you own a business you’ve heard of them, they have members from Kugluktuk.