Canadian Clean Tech Funding Empowers Black Entrepreneurs

14 Oct, 2023

Canadian Clean Tech Funding Empowers Black Entrepreneurs

Canada places significant emphasis on decarbonization and addressing air pollution as part of its commitment to achieving net-zero emissions by 2050. In a move to diversify and promote inclusivity within this mission, the Federation of African Canadian Economics (FACE) is overseeing the administration of the $160 million Black Entrepreneurship Loan Fund. This fund, part of the Macro Loan Program, enables eligible Black-owned businesses to access up to $250,000 in financing for capital investments, including clean transportation vehicles, refueling, and recharging equipment. It also provides options for working capital and short-term receivable financing loans.

To make this initiative a reality, FACE collaborates with the Government of Canada, the Crown corporation Business Development Bank of Canada, and financial institutions such as credit unions. The program operates through public-private partnerships, embodying FACE's cross-sectoral approach.

The timing of this favorable funding for Black entrepreneurs in Canada aligns perfectly with the nation's transition towards cleaner transportation and energy. Budget 2023 introduced five significant Clean Investment Tax Credits, amounting to over $60 billion over the next decade. Energy Minister Jonathan Wilkinson unveiled Canada's Carbon Management Strategy at the International Energy Agency in Paris at the end of September.

Adding to the funding and policy landscape, FACE presents Black-led businesses in Canada with flexible loan terms, including the possibility of postponing principal payments for up to 12 months, with a loan tenor of up to seven years. The program charges interest during this 12-month period, and fees, rates, and terms are subject to the borrower's credit rating.

This initiative is particularly advantageous for stakeholders in the clean transportation sector who are committed to enhancing their value chain through inclusive diversity supplier initiatives. A recent report by Michigan State University highlighted the substantial financial benefits that companies gain by investing in minority-run businesses. Large Canadian businesses can collaborate with Black-owned enterprises to access this program.

Inclusive and diverse financing is essential because Black Canadians encounter significant obstacles within the entrepreneurial landscape. According to the African Canadian Senate Group, 75% of Black entrepreneurs believe that their race has made it more challenging to achieve success as entrepreneurs. Statistics Canada reveals that average investments in White-owned businesses are more than three times higher than those in Black-owned businesses in terms of physical capital.

Amid Canada's clean energy innovation movement, FACE's loan program addresses these disparities, ensuring more equitable lending and enabling talented entrepreneurs to contribute to the nation's decarbonization goals. As the clean energy revolution unfolds across Canada, inclusive access to capital is vital. The nation is committed to supporting new ventures that tackle climate change, making it an ideal environment for Black-led businesses focused on clean technology, sustainability, and decarbonization to thrive.