Home page Site map Email Québec Portal Search Francais
Menu Contenu
Secrétariat aux affaires autochtones

Economic development

The economic development component of the Aboriginal Initiatives Fund II (AIF II) reserves $64 million for Aboriginal nations and communities covered under the program.The goals of this component are to:

  1. Establish conditions that are conducive to the emergence of economic development;
  2. Create and develop businesses;
  3. Create and consolidate jobs;
  4. Foster entrepreneurship among women and youth.

A. General terms

In order to access this component of the program, a nation or community must:

  1. Have signed with the Minister for Aboriginal Affairs a specific agreement in which the nation or community undertakes to submit economic development projects. This agreement must be signed no later than two years following the publication, in the Gazette officielle du Québec, of the Order in Council that approved the creation of the AIF II;
  2. Not have previously signed with the Gouvernement du Québec an agreement allowing it to fund economic development projects, unless such agreement specifically provided that it would not have a prejudicial effect on the renewal of funding under the AIF II.

Under the economic development and community infrastructure components, should a community wish to transfer residual amounts from the AIF to the AIF II, the AIF agreement will be terminated, and all projects will be assessed pursuant to applicable criteria under the AIF II. The other AIF components ended on March 31, 2012. The resolution of the council to enter into specific agreements relating to AIF II with the Gouvernement du Québec would have to reflect this intention, where applicable.

B. Eligible organizations

Eligible organizations are as follows:

  1. The Aboriginal communities and nations recognized by the Québec National Assembly;
  2. Non-profit Aboriginal organizations or their equivalent;
  3. Profit-oriented Aboriginal organizations or their equivalent.

C. Eligible projects

In order to be eligible for the amounts reserved for nations and communities, an economic development project must:

  1. Enable the goals of this component of the program to be reached;
  2. Be a priority for the nation or community;
  3. Be submitted to the Secrétariat aux affaires autochtones (SAA) within five years of the date on which the specific agreement is signed.

Projects that are eligible for the amounts reserved for mobilization, youth entrepreneurship and social economy projects, must:

  1. Enable the goals of this component of the program to be reached;
  2. Be submitted to the SAA and be completed prior to March 31, 2017.

In order to be eligible, a project must fit into one of the following six categories:

Entrepreneurship

Projects in this category are meant for starting, expanding and developing businesses.

Studies

Projects in this category are mainly meant for the completion of studies necessary for putting together eligible projects within this component of the program for economic development (including business plans).

The share allocated to studies may not exceed 10% of the amounts reserved by the program for the economic development of the nation or community.

Assistance for local economic development

Projects in this category mainly seek to help the nation or community so that it can better structure its own economic development. More specifically, these projects are mainly meant to:

  1. Support communities in the development of a strategic plan for economic development;
  2. Survey the resources of the environment, and make them known and more accessible;
  3. Hire and train local economic development officers in an Aboriginal setting.

Financial assistance for local economic development may not exceed 30% of the amounts reserved for the economic development program of the nation or community.

Labour force training

Projects in this category are mainly meant for the development of the Aboriginal labour force, especially through vocational training.

Retraining, training in the workplace that is necessary for starting, expanding or consolidating an entrepreneurial project eligible within this component of the program may be eligible, where the beneficiary of the retraining training is Aboriginal. Furthermore, Local First Nation Commissions as well as local employment centres must be solicited by the proponents as partners, pursuant to their respective responsibilities. The AIF II’s general application framework stipulates that the program is a complementary tool.

Social economy

Projects in this category are mainly meant for the initiatives of non-profit organizations in the social economy field.

Under the program, $2 million is reserved for social economy projects developed by off-reserve Aboriginal companies or organizations. The contribution limit for each project is set to $100,000, allowing for exceptions. The first-come, first-serve principle applies.

Social economy companies offer products and services in innovative fields that are just as varied as those covered by traditional companies. “Social” community businesses, whose goal is to produce and offer goods and services that meet community needs, have an entrepreneurial nature that is based on a social purpose.

In accordance with the directions of the Gouvernement du Québec in this area, the operating rules and principles of these companies define them in a particular way, so:

  1. Their purpose must be to serve their members or community rather than simply to generate profit and focus on financial performance;
  2. They must be managed in a way that is autonomous from the State;
  3. They must integrate, in their statutes and ways of doing things, a democratic decision-making process that includes users;
  4. They must defend the primacy of people and jobs over capital in the division of their surpluses and revenue;
  5. They base their activities on principles of participation, empowerment and individual and collective responsibility.

The social economy sector consists of two types of companies classified according to their legal status:

  1. Cooperative and mutualist, composed of cooperatives in accordance with the Cooperatives Act or the Act respecting financial services cooperatives, as well asmutual insurance companies established in accordance with the Act respecting insurance;
  2. Associative, which includes non-profit organizations (NPOs) created pursuant to division III of the Companies Act and whose financial viability mainly depends on independent revenue from production and goods and services.

Note that NPOs that are not mainly entrepreneurial in nature, such as community-based agencies, charitable organizations, economic development corporations, municipal bodies, and the like, are not social economy companies. Nevertheless, such organizations can still set up social economy projects that respect the above-mentioned criteria to generate autonomous revenue.

Economic mobilization

Projects in this category must have a mobilizing effect in the economic field for Aboriginal nations or communities in general. They must also have been submitted by non-profit Aboriginal organizations and have been the subject of a consensus among the relevant Aboriginal nations or communities.

Youth entrepreneurship

Under the AIF II, $2 million is reserved for economic development projects led by young Aboriginal entrepreneurs aged 35 or under, whether or not they live in their native community, in addition to amounts reserved and split among the Aboriginal communities that are eligible for the program.

These projects are to be submitted directly to the SAA, which will analyze their eligibility based on the applicable standards of the program. The first-come, first-serve principle applies. The contribution limit is set to $100,000 per project, allowing some exceptions.

D. Eligible expenses

Generally speaking, eligible expenses are limited to capital expenditures, as defined in generally accepted accounting principles. Operating expenses, the repayment of debt or deficits, as well as working capital are not eligible expenses.
Some exceptions can be made in the following situations:

  1. For study, labour force training and mobilization projects, all expenses are eligible;
  2. For local economic development assistance and social economy projects, all expenses are eligible over a maximum period of five years;
  3. In the case of business acquisitions or acquisitions of interest in existing companies, the expenses incurred are eligible if they have direct and significant impacts on job creation in the community.

E. Determining of the financial assistance

General section

The financial assistance takes the form of a grant, the maximum amount of which is determined by taking into account the proponent’s financial needs and the assistance granted by other departments and agencies of the Gouvernement du Québec and of the federal government.

The assistance granted by the Gouvernement du Québec and its agencies may not exceed 50 % of eligible expenses, and the total amount of the financial assistance awarded by the two orders of government may not exceed 90% of the total cost of the project, allowing for exceptions.

In order to encourage partnerships between Aboriginal and non-Aboriginal people, any business formed by such a partnership will be considered to be 100 % eligible for the program, under the condition that the Aboriginal proponent retain effective control over the business and more than 50 % ownership of the company. Where an Aboriginal proponent does not have a majority share in the company, the financial assistance that may be awarded to the project will correspond to the share of the company under Aboriginal control.

Specific section

In order to make funding more accessible for Aboriginal women and youth, a specific section was put in place. The SAA has increased the combined financial assistance awarded by the Gouvernement du Québec and its agencies to 60 % of eligible expenses for projects carried out by Aboriginal women and youth. Similarly, the combined assistance granted by the two orders of government has risen to 95 % of the total costs of such projects.

Only young Aboriginals aged 35 or under and Aboriginal women of all ages may benefit from this specific funding section.

Companies for which over 50 % of effective control and ownership are held by young Aboriginal entrepreneurs aged 35 or under or female Aboriginal entrepreneurs of all ages are fully eligible for this specific section of funding.

F. Terms of repayment and reporting

Generally speaking, authorized projects will be the subject of a funding agreement between the eligible organization and the Gouvernement du Québec. The agreement will define the activities, conditions for the payment of financial assistance and commitments of the parties. Moreover, this agreement provides for a reporting process.

Signature gouvernementale
Secrétariat aux affaires autochtones
905, avenue Honoré-Mercier, 1er étage - Québec (Qc)  G1R 5M6 - 418 643-3166
Last update: September 29, 2013
Online as of: November 2, 2012