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
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.”