By Canadian Press

Boost Indigenous business to counter Trump’s tariff threats, leaders say

Feb 7, 2025 | 4:28 PM

OTTAWA — As U.S. President Donald Trump’s tariff threats rattle Canadian investors, the head of a group representing thousands of Indigenous businesses is calling for governments and Canadians to boost their support of First Nations firms that have strong ties to the land and are less likely to move south.

“We have relied on foreign investment and foreign actors to come to Canada to set up shop to manufacture, and the government highly subsidizes this. But what is the return on investment from doing that?” said Shannin Metatawabin, CEO of the National Aboriginal Capital Corporation Association.

“Support Indigenous businesses that are looking to actively create manufacturing facilities on their First Nation, utilizing their members. That’s a direct impact for Indigenous people that supports the Canadian economy.”

Trump has threatened to impose 25 per cent across-the-board tariffs on all Mexican and Canadian imports — with a lower 10 per cent tariff on Canadian energy. He called it an economic penalty to compel America’s two geographical neighbours to stop illegal flows of fentanyl across the border, though he has also tied it to trade, complaining that both Canada and Mexico export more to the U.S. than it exports to them.

The tariffs were to begin Feb. 4 but Trump pushed that back to March 4 after speaking to Prime Minister Justin Trudeau about Canada’s border strategy. Trump is now looking for a new economic negotiation, which could involve renegotiating the same continental trade deal he renegotiated with Trudeau during Trump’s first term in office.

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Governments of all levels and political stripes in Canada are looking to shore up Canada’s economy to make it less vulnerable to an American shock. That includes looking for alternatives to the U.S. for export markets and breaking down internal trade barriers that have made many businesses find it easier to do business north-south than east-west within Canada.

Metatawabin said what First Nations businesses need to succeed is investment from governments and support from Canadian consumers.

“If we’re going to respond to the threat from the U.S., it requires a wholesale change in how Canada operates its economy,” Metatawabin said.

Statistics Canada estimated the size of the Indigenous-run economy at $56.1 billion in 2021 — about 2.4 per cent of Canada’s gross domestic income. Indigenous gross domestic income has been increasing at a rate faster than the national economy.

But First Nations sometimes struggle to take advantage of business opportunities because the Indian Act bars First Nations communities from leveraging their land for loans.

Deep infrastructure shortfalls — including inadequate roads, housing, internet connectivity and access to clean water — also undermine growth. The Assembly of First Nations and Indigenous Services Canada believes it would cost $349 billion to close that gap by 2030, an investment the AFN and the Conference Board of Canada say could boost Canada’s GDP by $308 billion over seven years.

Metatawabin said the Indigenous economy could be hit hard if Trump follows through on his tariff threat — especially the construction, retail and natural resource sectors, which account for about 45 per cent of his clients.

And since most of those businesses only have between one and five employees, he said, the impact could be seismic.

Bill Lomax, CEO of the First Nations Bank, said Trump’s tariffs could be the first instance of an economic shock that affects First Nations businesses to the same degree as the rest of the economy.

“When we look at history, First Nations in particular have not had the same kind of impacts from recessions that the broader community has had. Oftentimes, it was because things just weren’t that great for them already,” Lomax said.

“What’s changed now is the participation rate in the broader economy that First Nations have that they didn’t have before,” he said, citing growing Indigenous ownership in the hotel, forestry, fisheries and metal manufacturing sectors.

Assembly of First Nations National Chief Cindy Woodhouse is warning that any response to Trump tariffs that includes Canada’s natural resources, cannot be done without First Nations. Many provinces are looking to ramp up resource extraction, including oil, natural gas and critical minerals — as an economic boost.

Woodhouse Nepinak said as most of those resources are found on First Nations land, First Nations have to be at the table.

“Provinces don’t trump First Nations,” Woodhouse Nepinak said.

“These territories hold vast deposits of critical minerals, forests and fresh water supplies that fuel industries and sustained (Indigenous) communities on both sides of the border.”

This report by The Canadian Press was first published Feb. 7, 2025.

Alessia Passafiume, The Canadian Press