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Record year for AEDC’s community investment fund

Record year for AEDC’s community investment fund

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PHOTO: Matthew and Christine Rapp took over operations at Marrs’ Perch Lake Lodge last year with the help of the AEDC

As financing for small businesses in rural communities becomes ever harder to come by, the services of organizations like Atikokan Economic Development Corp. (AEDC) are becoming increasingly vital to economic development, said the AEDC executive director Garry McKinnon at the corporation’s annual meeting April 19.

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Banks are not keen on financing sectors it deems high-risk, such as forestry, or small businesses in economically depressed regions, and that’s where the AEDC can help access the initial funding. “Banks have largely abandoned us,” said McKinnon.

The year, the AEDC’s 29th, was another record one in terms of loan disbursement, with $1,129,989 going to 18 businesses. The funds helped launch nine new businesses, and refinance or amalgamate nine more. In total, the investments created 38 new jobs last year.

In its third consecutive year of lending in excess of $1 million, the AEDC invested in the following industries: hospitality ($174,500), service ($498,000), tourism ($191,989), retail ($145,500), transportation ($90,000) and mining ($30,000).

“This is a testament to the upswing of the community and the role of the AEDC in lending,” noted the annual report.

At year’s end, the AEDC held a total of 71 active loans totaling $4,266,474. Since 1988, the investment fund has dispersed almost $16 million.

“While the number of loans remains stable, the average value of loans has increased dramatically as new entrepreneurs seek startup financing while young entrepreneurs are purchasing existing businesses.”

Larger loans are made possible through a Northwestern Ontario regional investment fund, a pool for dispensing loans of up to $500,000. Atikokan holds 12 of these regional investments totaling $739,042. The fund has a current balance of over $3.5 million, and was formed by the AEDC and sister organizations in Terrace Bay, Fort Frances, Geraldton, Thunder Bay and Kenora.

FedNor, which also funds AEDC operations ($300,000 in 2016), contributed an additional $450,000 to the investment fund during the year; it also received $493, 235 in loan repayments.

“Our investment fund continues to be in a positive cash flow position, going forward,” said McKinnon.

The Town is the other major funder of AEDC operations ($50,000). The majority of its spending was on salaries ($224,894), along with over $52,000 in equipment and other costs and over $50,000 in administration.

Testimonial

AEDC funding helped Marr’s Perch Lake Lodge’s new owners Matthew and Christine Rapp, after the “the bank backed out of the loan for reasons we still are unsure of,” just 15 days before the purchase, said the Rapps. The Wisconsin family had first visited the lodge as customers in 2015.

“The AEDC and a vendor take-back agreement would be the only ones helping with the funding of the lodge,” states their client testimonial. “We worked with all three of AEDC’s business development staff who walked us through the business process, even when we were 10 hours away in Milwaukee.”

“Without the help of the AEDC staff, investment fund committee, and board of directors, our purchase of Marr’s Perch Lake Lodge would not have been possible. We understand the first couple of years would be hard but with the help of the AEDC they make the process easier for small businesses and families to achieve the Canadian dream.”

McKinnon added that of the $16 million in financing given out since 1988, “a fair bit went to Upsala and east and west of town, including several loans to the First Nations in this 2,400 square kilometres [AEDC service area].”

All funding applications are reviewed by a committee comprised of four community members and three AEDC directors, before receiving final approval by the entire AEDC board.

Other highlights

In September, McKinnon was elected as president of Community Futures of Ontario, which represents 65 economic development agencies, and reported is leading efforts to demonstrate to both the provincial and federal government “that Community Futures Development Corporations have the capacity to deliver additional federal programs in an effective and efficient manner in rural and small town Ontario.”

The first step is for the committee to meet with the Ontario Liberal Caucus later this month, he said.

While 2017 is not looking so rosy for the forestry sector, given the American softwood lumber tariffs and the struggles in the wood pellet market, 2016 was a robust year for both mills here.

Both worked closely with the Employment Centre (which is overseen by the AEDC) on direct hiring, as well as on filling spin-off jobs in logging and haulage. “Resolute continues to employ over 100 at its Sapawe mill, keeping skilled, well-paying jobs in the community,” reported AEDC chair Jim Turner. “Similar results were seen at Rentech, as they continue to provide high-pay employment to the community; however we continue to cautiously watch and work with them as their operations and their role in the industry are evolving.”

In addition to hosting hiring days for Resolute, concentrated outreach efforts by the Employment Centre brought in 2,450 visitors to the office and 17,279 electronic visitors.

The Employment Centre is funded by the Ministry of Advanced Education and Skills Development to the amount of $583,253, and ended the year with a surplus of $21,000. The majority of expenses were in salaries and benefits ($208,550), community development costs ($147,550) (the Centre serves the same area as the AEDC, and opened an outreach site in Lac la Croix), administration ($130,723), and occupancy and equipment costs of $56,629.

Other AEDC highlights were successes in continued tourism efforts, including the Tourism Atikokan project (spearheaded by Gord Knowles and Katie Hannon), which earned the AEDC its first national award. The AEDC also won two provincial awards, one for its work with the Heart of the Continent’s geo-tourism project (Atikokan’s Chris Stromberg is coordinator and Knowles represents the AEDC on the bi-national committee) and one for the www.VisitAtikokan.ca website.

And in September, the AEDC and Heart of the Continent shared an International Economic Developers Council award for the www.TravelTheHeart.org website.

The AEDC also worked closely with the Path of the Paddle and the region’s TransCanada Trail effort; the revived Friends of the White Otter Castle; the Atikokan Chamber of Commerce; and the new Young Professional Association of Atikokan.

Acclaimed to the AEDC board Dave Homer, Jack Pierce, Rob Potts, Shannon Riding (Upsala) for three year terms and Brian Stimson to replace Samantha Boyko for the one year remaining in her term. The Upsala rep to the board is Cleo Wolsiffer, with Julian Jordan as Lac La Croix rep.

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