Alfred Burgesson, the founder of Tribe Network, an entrepreneurship and innovation hub for BIPOC Canadians, in Halifax on Tuesday, May 25, 2021. According to a new study published Wednesday, Black Canadian entrepreneurs say they face systemic racism and widespread barriers to growing their businesses, including accessing capital, building supportive networks and skills development.Darren Calabrese/The Globe and Mail
Black entrepreneurs in Canada say they face systemic racism and widespread barriers to growing their businesses, including accessing capital, building supportive networks and skills development, according to a new survey published Wednesday.
Of the 342 Black entrepreneurs who participated in the study, 76 per cent said their race made it more difficult to succeed as a business owner. Almost half said they believed a supplier or vendor had refused to do business with them because of their race, and 45 per cent said they felt they had been denied funding from a financial institution because they are Black.
The study, conducted by Abacus Data, was commissioned by Senator Colin Deacon and the African Canadian Senate Group.
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Alfred Burgesson, the study’s project lead and founder of Tribe Network, an entrepreneurship and innovation hub for BIPOC Canadians, said he was not surprised by the responses. As a business owner himself, he said he had also come up against barriers to growing his venture.
“Black business owners, Black entrepreneurs, Black people, have not been able to accumulate wealth like white entrepreneurs, white business owners and white people have over the past hundreds of years,” Mr. Burgesson said. “White entrepreneurs have been able to build this system that works for them, and Black entrepreneurs have not always been able to participate, or have not felt welcome or not had access.”
Thirty per cent of respondents also said they felt they have either regularly or occasionally been denied a grant or funding from government organizations because they are Black.
Mr. Deacon said he was disappointed by what he saw in the responses. “What has become incredibly clear is that there’s not a level playing field as it relates to access to the conditions for success,” he said. “You could be a phenomenal Indigenous or Black entrepreneur and never get a proper chance.”
The survey found that few Black business owners relied on bank loans or lines of credit, on grants or funding from governments, or financial gifts from family members or loans or investments from partners. As a result, “bootstrapping” is how most Black entrepreneurs have funded their companies, the report said – essentially financing from credit cards and personal savings.
Further, the survey found little trust in banks or other financial institutions among Black business owners. Only about one in five respondents said they generally trust banks to do what is right for them and their community.
“I don’t know if giving banks more money or more power to essentially control access to capital for the Black community is a solution,” Mr. Burgesson said.
In an e-mailed statement from the Canadian Bankers Association, spokesperson Mathieu Labrèche said Canada’s banks are “deeply committed” to enabling economic growth for Black business owners and entrepreneurs across the country, with several banks recently announcing “concrete actions and financial commitments to build more inclusive and equitable access to financial solutions and advice for their Black customers.”
Beyond that, Mr. Labrèche said nine financial institutions in Canada, including the six largest banks, have jointly supported the federal government’s Black Entrepreneurship Program, with more than $128-million in lending capital for the Black Entrepreneurship Loan Fund and support for the BlackNorth Initiative.
Conversely, half of the surveyed responders said they trust Black-led business organizations in their community.
The survey sought to compare the opinions of “empowered” Black entrepreneurs – those who have been in business longer, accessed capital and have identified mentors or supports for their businesses – with the “unempowered.”
In general, it found the empowered business owners to be more confident around issues of accessing funding and responding to challenges effectively.
But the survey also found respondents thought there was a general lack of support networks and mentorship for Black entrepreneurs. The majority of respondents said they do not know how to access support or advice when challenges arise in their business.
The same was true for Black female entrepreneurs, who said they feel empowered when they see other women who look like them succeeding as business owners.
“Oftentimes, Black women may not think about entrepreneurship as a career pathway because they don’t see successful Black women entrepreneurs,” said Stephanie Dei, the director of research partnerships at Ryerson University’s Diversity Institute and the Women Entrepreneurship Knowledge Hub.
“If you think about how a business develops [by] having mentorship [and] advisers – people who will help an entrepreneur along the journey who are also Black who can speak to your particular experiences and share how they have overcome [challenges] – in a world of power, an environment where systemic racism and discrimination is real, having that guidance is really critical.”
The study concluded that “actions must be taken at the societal, organizational and individual levels” to support Black entrepreneurs across Canada.
Mr. Burgesson said urgent action is needed to level the playing field.
“If we’re truly serious about empowering Black entrepreneurs and improving their quality of life, this has to be all three levels of government putting forward a commitment, and the investment needs to be a heck of a lot more than it is right now.”
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Editor’s note: This story has been changed to correct the amount Canada’s financial institutions have contributed to the federal government’s Black Entrepreneurship Program.