If markets are risk-averse by design, repayable loans won’t unlock innovation. The North needs market-building tools—demand, first customers, and practical pathways to revenue.
In the Western Arctic, we hear a familiar story: we need more innovation, more diversification, more private-sector growth. But the tools we rely on don’t always match the reality on the ground—or the economic mechanics that make innovation possible.
A recent ArcticBusiness.ca editorial put it plainly: CanNor’s loan-based approach isn’t being widely used—not because Northerners lack ambition, but because repayable financing assumes something the North often doesn’t have at scale: a market that can reward success quickly enough to service debt.
For background, you can read the editorial here: Why CanNor’s Loans Aren’t Sparking the Northern Economy.
Loans make sense when customers are plentiful, procurement cycles are fast, and revenue can grow quickly. But much of Northern Canada operates differently. Government departments, public institutions, and nonprofits often dominate demand and set the practical conditions for what is “viable”—and those systems are understandably designed to prioritize stability, compliance, and predictability.
Entrepreneurship runs on a different logic. It requires testing unproven ideas, building before customers exist, and sometimes failing before succeeding. In the North, where the customer base is smaller and operating costs are higher, asking entrepreneurs to take on repayable debt can amount to shifting public risk onto the people least able to absorb it.
The outcome is predictable: rational people opt out.
Even when entrepreneurs can access financing, a bigger barrier often remains: risk-taking demand. A business can’t repay a loan on the strength of a good idea. It repays debt with revenue—and revenue requires buyers who are willing (and able) to purchase something new.
When the dominant buyers are structurally unlikely to purchase untested solutions—and when procurement cycles are slow and payments can be delayed—innovation becomes hard to finance responsibly. That’s why this conversation matters for the Western Arctic. If we want a stronger private sector, we need policies and programs that help create the conditions for businesses to earn revenue—not only borrow against the hope of it.
Market-building tools aren’t handouts. They recognize a basic truth: innovation usually comes before profitability, not after.
In Northern contexts, that can look like non-repayable support for early-stage experimentation and first deployments; pilot procurement that lets buyers test solutions without forcing entrepreneurs to finance the entire risk; and “first-customer” mechanisms that bridge the gap between a strong idea and a revenue-generating service.
These approaches don’t lower standards. They change the sequence—so entrepreneurs can prove value, build credibility, and reach revenue before taking on debt that assumes success has already happened.
WABA’s role is to strengthen the conditions that make local business growth more likely—especially in a region where governments and public institutions are major market-makers.
That starts with visibility. If a buyer can’t quickly find and validate local capability under time pressure, local firms lose before the conversation even begins. WABA is building tools and infrastructure that make Western Arctic businesses easier to identify, compare, and verify.
It also means reducing friction between suppliers and institutional buyers—so scopes, timelines, and expectations are clearer earlier, and participation becomes more realistic for local firms operating with tight windows and thin margins.
And it means keeping the advocacy constructive and measurable—focused on practical changes that increase local participation and real outcomes over time, not just activity on paper.
Loans can be one tool in a healthy market. But in a system where demand is cautious by design, loans alone won’t catalyze growth. If we want a stronger Northern economy, we need market-building approaches that help businesses get to revenue—so innovation becomes a lived experience, not just a talking point.
If you’re a business, make your capability easy to find and easy to verify—especially for buyers who need to move fast. The WABA Businesses Directory is one practical place to start: https://westernarctic.ca/businesses/.
If you’re a funder, program lead, or partner, and you want grounded feedback on what’s blocking participation—and what would reduce risk without adding administrative burden—connect with WABA: https://westernarctic.ca/contact/.
