Recommendations for Economic Development in Nunavut
On March 25th, Kaapittiaq was invited for a one hour presentation at the Nunavut Economic Development Agency's annual conference. As a relatively new company in Nunavut, we were able to speak directly to the challenges of building a start-up social enterprise in the territory. We completed our presentation with a series of recommendations that we would like to share as part of a wider call to encourage the territory to recognize and support the social enterprise business structure.
Building and growing Indigenous networks
We require a strategy for how to grow an Indigenous focused business network within our territory. As a social enterprise, Kaapittiaq has a mission to build and support Indigenous capacity, training and businesses. Many of the alliances and business partnerships we make are with small Inuit businesses like our own; namely ones that continually struggle to support themselves given the higher costs of shipping, salaries and materials within the territory. Developing supply and production chains both strengthen these businesses, but introduce an underlying vulnerability to the network as a whole. If one business collapses, it increases the likelihood of the same happening for other businesses who critically rely on them. In brainstorming ideas for how we can grow our partnerships with Indigenous businesses in a more sustainable, financially manageable, and risk-adverse manner, we voiced our need in the following areas:
Small business growth funding whose budgets can accommodate for the higher operating costs of working in Nunavut. Many national programs have expectations for productivity and budgets that are set according to southern business benchmarks.
Solutions for scaling our staff capacity in a more sustainable manner. Kaapittiaq is currently run on an almost entirely volunteer basis. This is not a conscious choice, but a reflection of how difficult it is to find sustainable funding to invest in wages. Until a company can produce sufficient revenue to fund a fair living wage for one full-time staff member (in Nunavut this is estimated at $26/hr, or roughly $51,000/year), they must rely on short term and contract labour. This both increases the workload on existing staff, and creates an environment of financial insecurity for those employed on short-term contracts. It is important to note that most business funding offers only payments for contract staff positions or consultants, with no support for wages to sustain these positions over time. The difficulty of retaining qualified and experienced workers--already an issue in Nunavut--is further compounded when they can only be offered short term and contractual jobs.
The need for northern and Indigenous partners in key shipping and distribution roles. Drop-shipping and order fulfillment are increasingly become the reality of how small and local businesses can afford to operate in a global context. With no northern-based order fulfillment centres available, companies are incentivized to move their production and distribution to the south. Order fulfillment comes with a high cost for businesses (the usual rate being around $3 per item shipped, not inclusive of storage costs), as it is a high demand service that many small companies have no choice but to use. We advocate for Nunavut to begin investing in its own drop-shipping and order fulfillment centres as a way to create Inuit jobs, subsidize shipping for Inuit business, and bring down often prohibitively expense fulfillment costs for small business owners.
Creating new models for Inuit Social Enterprise
We are trying to develop and codify a business framework that can be successfully scaled as we grow larger, and which can be used to ensure the company's sustainability and transferability to new staff. We are interested in thinking in novel ways as to how this framework can accommodate Inuit values and priorities. We need:
•territorial program recognition of social enterprise (ownership of a company by a non-profit organization) as a valid model for Inuit owned businesses.
•federal support for social enterprise, and for local infrastructure development under a social enterprise model. Existing models of funding still see financial return as the basis for project and infrastructure investment
•Increase in social financing at territorial and federal levels to support the broader social benefits produced through social enterprise.
Breaking into new business markets
As a northern based business, we need to identify target markets for retail, and assess which stores/industries we have the quantity and price points to sell through. We need to either find a way to increase awareness of higher overhead costs for Nunavut-based businesses and social enterprises, or find some way to subsidize costs to an extent that we can be more competitive. We need:
•ways to be competitive outside with non-Inuit and non-Arctic companies for industry contracts outside of Nunavut.
•subsidies for shipping of Nunavut-made products throughout Nunavut.