Story by Katharine Sandiford

Photo by Cathie Archbould

When faced with the dilemma of whether to go back to work or stay at home to raise her toddler and six-month old, Stacey McDiarmid decided she wanted neither. Instead, she opened a convention-bending store in Whitehorse where she could parent full time while also running a store devoted to parenting. “We needed more stores for children in town but I wanted to be able to stay home with my kids,” she says. “I’m a teacher by trade but I wanted to be able to bring my kids to work with me.”

So in addition to the racks of colourful toys, books, maternity supplies, diapers and skin care products, Tots & Toddlers also boasts a bottle-warming station, diaper-changing table (with free diapers for those in a pinch), a large sofa for breastfeeding and a huge play area where McDiarmid’s two-and-a-half year old son Parker hocks toys to visiting ids. “He’s my little junior associate,” she says of Parker. “He even goes to the door to greet people.”

While simultaneously running a shop and looking after her children can be extremely taxing, McDiarmid says she’s become a “master multi-tasker” and couldn’t ask for a better job. “Plus customers are really flexible,” she says. “They see that I have a little baby. Sometimes I might be feeding her and they’ll say, ‘Oh, take your time. We’re not in a rush.’”

Ron Near remembers the first time he saw the Tibbitt to Contwoyto Ice Road. It was the mid-1990s. The Ekati diamond mine was under construction and the former RCMP officer and one-time Yellowknife warden had started his own company, SecureCheck, to police truckers and enforce driving speeds (no more than 25 clicks) on the 400-kilometre ice road.

Near sold SecureCheck to Nunasi Corporation in 2005, but his bond to the ice road has only solidified since then. He joined Tli Cho Landtran, which trucks up fuel and other crucial supplies to Ekati and its diamond mine counterparts, Diavik and Snap Lake. Now, as director of the winter road on behalf of Tibbitt to Contwoyto Winter Road Joint Venture, he actually gets to direct the whole operation, which he dubs the “the longest school zone in the world.”

Up Here Business caught up with Near last month to discuss the ice road’s prized role in the North – and how much longer that role will last in the face of climate change and potential competition.

What kind of year is 2012 shaping up to be? It’s a pretty good year. We should have approximately 6,500 loads. That amounts to just under 210,000 metric tonnes.

Any special deliveries? Diavik is trucking up the components of its wind farm (a project with a construction cost ranging from $12.5 million to $15 million), along with the crane that’s going to be putting it up. That’s about 100 loads alone. It’s the first time anything like this has been done, so we’re having the radiuses and slopes of certain portages adjusted to make sure the loads can go up safely.

There’s been a lot of talk lately about the effect of climate change on winter roads throughout Canada. One journal, Nature Climate Change, posits that the Tibbitt to Contwoyto road will lose 17 per cent of its typical seven-to-10-week operating season between 2008 and 2020. From where you sit, what impact is climate change having? It’s such a hard question to answer. This year we’ve had some warmer temperatures in December and the early part of January, so right now, the ice is slightly less thick than it was this time last year. It’s such a minute number, though, that it’s not an issue.

As far as what happens the rest of this year, that’s hard to determine. There was a group from Carleton University that did some summer work up the road. The studies they’ve been doing were supposed project a 10-to-15-year period of colder winters overall, unless something out of the ordinary happens like El Nino.

The first hybrid air vehicles (HAVs) are currently being eyed for a 2014 unveiling up north. Do they threaten the economic viability of the winter road? I don’t think so. My concern is to try to supply the mines with the equipment and supplies they require in the safest way possible and in the most cost-efficient manner. And right now, that’s being met by using the winter road.

If it can be proven if there’s other ways that you can either eliminate or reduce the number of loads that go up the winter road, and it can be done in a cost-effect and safe manner, that’s a bonus to the mine sites.

But I think there will always be a need for the winter road, at least for the next 10 or fifteen years, just because I don’t think using airships or using the Bathurst Inlet Port and Road Project is going to be able to meet the demands of the diamond mines…

Let’s say HAVs can take the same types of loads that the winter road does, and that reduces the number of loads on the winter road. Is there a point where the number loads just doesn’t justify building the road?

If there were enough airships available, probably so … (But) it’s also hard to answer that question, because there are so many things that need to be proved about airships. Are they safer? On paper, they can carry huge loads. If they got to that point that they can do it safely – where they can carry the size of loads that they want and be more cost-effective than building a road – the clients that we serve would be crazy not to take advantage of that.

It’s a great conversation, and I would love to see one move the amount of freight that they supposedly can … But to serve every spot? You would have to have a huge fleet of them.

Do you still get calls from “Ice Road Truckers” fans wondering if they can drive on the road? When I was at Tli Cho Landtran – which hosted the TV show crew during the show’s first seasons – I would get emails from all over the world (Hungary, Australia) from truckers applying for work. And not just applying, but saying, ‘I’m ready. I’ve got my bags packed. Just tell me when to be there!’ It’s turned into a cult.

I got my haircut in a place named Buderim, north of Brisbane in Australia. The barber started asking me where I’m from, what I did. I said Yellowknife and she said, ‘That’s where “Ice Road Truckers” is!’ When I told her I built the road, she stopped cutting my hair and called her husband. And he came over to meet me. Something like that happened at least five or six times over the course of the month.

 

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A well-placed Up Here Business spy infiltrated the heavily-secured set and snagged a copy of the Arctic Air show bible, outlining the direction the series will take should it last five years. Here’s a spoiler-laced sneak peek.

Season 1: The diamond project hits a roadblock when its water licence is entangled in regulatory red-tape, stalling further development. The licence becomes the show’s very raison d’etre, much like the “Will they or won’t they?” romance of Moonlighting and the pursuit of the one-armed man in The Fugitive.

Season 2: The project gets its worst setback yet when it’s discovered the deposit is nestled in an ancient aboriginal burial ground. See: The Shining. 

Season 3: In a multi-episode cross-over storyline with “Ice Road Truckers,” special guest star Alex Debogorski plays himself, a rich reality TV star whose own failed diamond venture prompts him to team up with Ronnie, boosting the project’s profile, if nothing else. Just in time for Sweeps!

Season 4: In an explosive two-parter meant to inject new life in the show, the project is refused its water licence by the land and water board, prompting the show to move to Nunavut, where the regulatory regime is deemed more friendly.

Season 5: The mine finally opens, but in Bob Newhart style, it turns out to all be a dream!

It’s nice to see Yellowknife on primetime TV, but did the show get the details right? Guy Quenneville takes a hard look at Arctic Air’s pilot episode.

Who knew Yellowknife could look so purty? Well, we all did; now the rest of the country knows, too. About 1.1 million Canadian viewers tuned in to the January 10 premiere of CBC’s Yellowknife-set Arctic Air.  How big an audience is that? Put it this way: it’s about 10 times the number of people who live in all three territories.

The show’s production company, B.C.-based Omni Productions (see Ice Pilots NWT) filmed several of the pilot’s dialogue scenes in the NWT capital, during the twilight-hued days of late summer 2011. Sharp-eyed viewers (or those, like me, who blew the show up on their walls using a digital projector) caught more than a few Yellowknife landmarks and businesses.

Which ones made the cut? What strange, fictional doppelgangers doubled for real-life locations? And how was Yellowknife gussied up for its TV serenade? Behold, my totally obsessive, frame-by-frame guide to celluloid YK.

Omni appears to have shot the city’s downtown (see left) with a lens that tightly compressed several widely-spaced-out blocks crisscrossing Franklin Avenue. The result? A downtown Yellowknife that is packed and robust – entirely in keeping with the show’s conception of Yellowknife as a town teeming with opportunity (or, as one character boasts, the next Calgary).

Ah, how typical: In the opening scene, co-pilot Dev says he moved all the way from India for the chance to fly the airline’s incomparable DC-3s. As his flymate Krista Ivarson (Pascale Hutton) tersely corrects him, “Dev, you came all the way from India because Arctic Air can’t keep staff.” Who in the North can’t relate to that?

A brief drive-by shot of the downtown core (left) gives a glimpse of real estate company HomeLife Sunrise and its neighboring gym, BreakAway Fitness.

“Gentlemen, this is the one we dream about”: Jim McCallister (Aleks Paunovic), an old buddy of lead character and disgraced ex-Yellowknifer Bobby Martin (Adam Beach), says the hot-ticket kimberlite pipe at the centre of the story contains traces of olivine, chromite and eclogitic garnate - as it turns out, the same indicator minerals found in kimberlite at Rio Tinto’s Diavik diamond mine. Somebody clearly did their homework!

A studio lot outside Vancouver doubled for Yellowknife’s sole erotic dance club, Harley’s. The giveaway? Anyone whose’s been there knows it only has one strip pole, unlike the two seen on the show.

Nice place; can I stay there? Bobby checks in at the city’s finest hotel, The Frontier - another Vancouver studio set sitting in as a darkly-lit, elegant-looking cousin to The Explorer Hotel.

The highly-prospective diamond exploration project catches the eye of the endearingly-named venture capitalist Ronnie Dearman (Brian Markinson), who has some, well, curious views on resource extraction North of 60: “Climate change – best thing that that ever happened to the North. Every degree the temperature rises makes it that much easier to get at the resources.” Yeesh. Talk about giving mining a bad name.

“The days move along with regularity… then suddenly, there is a change.” — Travis Bickle, Taxi Driver

One day you’re blowing your usage cap downloading Scorsese movies, feeling like there’s no way Northern internet service will ever improve, and then, in the span of a week, two companies come along promising millions of dollars in communications infrastructure to speed up service.

Last week it was Toronto businessman Doug Cunningham, who wants to build a $640-million fibre optic cable between London and Tokyo, routing it through the Northwest Passage.

The latest is Telesat Canada, who already provide the bandwidth to much of the Canadian North via their Anik F2 satellite. This morning they announced they’re ready to put $40 million toward the Arctic Communications Infrastructure Initiative, which would double the amount of satellite bandwidth available for remote Northern communities. All of Nunavut and much of the Northwest Territories rely on satellite connections for their internet service.

The total project cost is estimated at $160 million, far cheaper than any fibre optic proposals so far. And Telesat says the new bandwidth could be up and running within a year of final approval.

As it happens, I have an interview scheduled with Paul Bush, Telesat’s vice president of business development, this afternoon. I’ll update this post later today.

UPDATE: Bush says Telesat’s proposal is a direct response to the gaps identified in the ACIA report linked to above. Essentially, the project aims to make more satellite bandwidth available to the North using excess capacity on the Anik F2, F3 and F1R satellites.

At the same time, Telesat would upgrade the local ground stations in each of the communities to expand the amount of bandwidth each can handle. Those are the main bottlenecks right now. The bottom line: the project would increase by three to four times the amount of bandwidth available from the current system. It should make internet faster and cheaper in the affected communities, Bush said, although the exact service improvements would be up to the internet service providers.

The other $120 million of the project’s cost would be covered by the territorial and federal governments, Bush said. The whole thing could be completed in anywhere from six to 12 months.

Bush was also pretty adamant that today’s announcement had nothing to do with the Arctic Fibre proposal that came out last week, but rather was set to launch today at the Northern Lights economic development conference that’s going on in Ottawa right now.

“We’ve been at this for the better part of a year,” Bush said.

—Chris Windeyer

Earlier this morning, Up Here Business spoke with Chris Hanks, director of environment and social responsibility for Newmont Mining Corporation.

Yesterday, the Colorado-based global miner announced that it is putting its Hope Bay gold project, located in Nunavut’s Kitikmeot region, on hold.

Newmont’s website (www.newmont.com) was promptly updated to include this amendment to the company’s description of Hope Bay: “The Hope Bay project was not included as part of the Company’s 2017 strategic growth plan or capital expenditure outlook for 2012.” The project will be under care and maintenance on an indefinite basis.

Here’s what else we found out about the decision, and its implications for the Kitikmeot region, in our chat with Chris Hanks.

— The decision to hold back on Hope Bay - which follows two years of heavy infrastructure and drilling investment - comes down to a number of complex factors. They include: results from drilling at the most developed of the Hope Bay deposits, Doris North, which was to be the first in a series of deposits eventually linking into one multi-deposit mine; underground drilling results from Doris North; the way that the project is spread out into a large area, which also includes other underground deposits called Boston and Madrid; and, given the extra cost of developing projects in the North, the relative attractiveness (presumably, cheaper development cost) of other projects in Newmont’s portfolio.

— The Kitikmeot Inuit Corporation was advised of Newmont’s move earlier this month, at the KIA’s latest board meeting. Asked what the reaction has been like, Hanks says people from the region are “probably still in shock.”

— The number of Inuit people employed on a monthly basis at Hope Bay in 2011 was 142.

— In 2011, $4.7 million was paid out to Inuit employess.

— Newmont does not know how small the workforce will become once it fully transitions into care and maintenance, though Hanks says the company will do everything it can to maximize Inuit employment.

— Kitikmeot Corporation, which is owned by the Kitikmeot Inuit Corporation, held 52 per cent of the contracts at Hope Bay, and stands to be most heavily affected by the decision. Its subsidiaries/joint ventures with Hope Bay contracts included Kitikmeot Caterers.

— Hanks added one interesting point, which is that Newmont’s submission of a project description for Phase 2 of Hope Bay to the Nunavut Impact Review Board last year might have created unrealistic expectations that Hope Bay was a go.

Hanks said that, due to the logistical complexities of working in the infrastructure-deprived North, permits to operate need to be applied for, and obtained, as early as possible. That way, when a project is ready to move into commercial production, all of the pieces of the infrastructure puzzle are in place. Project descriptions are just a step towards obtaining permits and do not necessarily connote action on the part of a company.

— Guy Quenneville

A construction giant from the Big Apple has taken a good bite out of a prominent Northern builder – but it’s not what you think. Turner Construction Company, the New York City-based firm behind monuments like the Whitney Museum of American Art, has purchased a 51-per-cent stake in Clark Builders, founded 35 years ago by Yellowknifer Andy Clark

What does the new partnership mean for Clark Builders? As president Paul Verhesen tells UHB: “More horsepower.”

So who pursued whom? We went out looking for a partner.

Why? We found ourselves in this mid-market space where there used to be a number of us. In recent years, those guys have either teamed up or gone to different levels. We’d always been – and still are – an organically growing business. But given where the market was going … we just didn’t see us growing at our past rate. We were sort of growing by 10 to 20 per cent a year, but that just wasn’t sustainable.

What other factors played a part? We used to be able to go to Maritimes and draw people; now they’ve got ship-building contracts and they’ve found oil out in Hibernia, so there isn’t the talent pool out there that is willing to come west and North, like there used to be. The pool has literally dried out.

It’s obviously a different story in general south of the border right now… Turner runs about 5,000 people across their operation. Quite a few are not fully employed or producing at their potential. That’s the win-win situation. They like who we are … and they have horsepower that we don’t. We can tap into that horsepower.

Does the short-term construction slowdown in the North also factor in? Not really, actually. The markets in individual sectors of our business in the North are still a huge part of our business – 20 per cent a year, on the low end.

But is Clark feeling the pinch in the NWT? We’re busy, but we’re not as busy as we could be if there were mines being built. The ironic part is there’s lots being talked about.

Are you changing your name? No. It takes a 66-per-cent ownership stake to make significant changes. Turner has 51 per cent, but they don’t have control. So our corporate brand won’t change; ditto our employee ownership program.

What does this change? Turner is 10 or 15 years ahead of the Canadian construction industry when it comes to new building methods, like building information modeling. We’re going to bring those techniques to all of our projects, including those in the North.

By Chris Windeyer

In a non-descript prefab in Yellowknife’s Kam Lake Industrial Park, surrounded by blank American Apparel hoodies and shelves lined with tubs of printer ink, a young woman stamps out T-shirt after T-shirt on a silkscreen press.

This isn’t a sweatshop. For Sarah Erasmus, the 25-year-old entrepreneur behind Erasmus Apparel, this is the office.

Born and raised in Ndilo, a Yellowknives Dene settlement at the tip of town,  Erasmus says her best-known T-shirt design is the two-tone silhouette of the Giant Mine tower, also located just outside town. It’s a shocking yellow-ink-on-purple design, appropriate for an image that’s been permanently imprinted on her mind’s eye. “I’ve looked at Giant Mine every day of my life,” she says.

Erasmus’ line of shirts represents Yellowknife for the people who live there. They’re not of the “my-friend-visited-Yellowknife-and-all-I-got-was-this-lousy-T-shirt” variety, so common in souvenir shops. One shirt unabashedly celebrates certain Northern quirks as points of pride, boasting: “I’ve been to the Gold Range. I use tinfoil as a curtain. I’ve slept under the midnight sun. I wouldn’t want to live anywhere else.”

Erasmus Apparel got its start at Folk on the Rocks, Yellowknife’s annual summer concert, two years ago. Erasmus made up a short run of three different designs, 25 shirts each, and sold every single one over the course of the weekend. Then a Yellowknife band named The Dawgwoods came calling. Soon, there were more requests, more jobs, even contracts from Nunavut. With the help of her aunt and uncle, who invested as silent partners, and some funds from the Business Development Investment Corporation, Erasmus was in business.

Now she’s planning a move to a new downtown storefront location, where she hopes to open up shop in March. With the move comes expansion: on order is a new printer/cutter that will allow her to print decals, stickers and signs.

Erasmus calls herself a “T-shirt lover,” setting out to produce shirts for those who see an image, or think of an idea, and say to themselves, “I wish that was a T-shirt.”

“I just think of what I would want to wear,” Erasmus says. “I want to spice it up and make it interesting.” And because she does almost all the work herself, from design to production to marketing, it’s possible to churn out orders quickly, even if it means late nights working the press. “You throw some tunes on and get in a zone.”

Erasmus’ path from high school to entrepreneurship was not a direct one. She started at film school in Vancouver, then pursued a fine arts degree at the Alberta College of Art and Design. She didn’t care for that much, opting instead to attend SAIT Polytechnic in Calgary, where she completed a degree in digital graphics communications.

Being a young aboriginal woman making a name for herself has made Erasmus something of a role model. Last summer, she was invited to speak to graduates of a local high school. With her own post-secondary odyssey still fresh in her mind, she had some comforting words for grads preparing to chart their own academic courses: it’s okay to change your mind.

“I switched what I wanted to do three or four times and that’s okay,” she says. “You’re not letting anyone down.”

 

 

By Peter Jickling

How’s this for a great deal? On the back page of The Last Great Road Trip, an annual Yukon tourism magazine, there’s a collection of coupons from vendors hocking their wares to travelers making their way up the Alaska Highway. Whitehorse’s Boston Pizza has one such coupon, a rather innocuous-looking thing, until you carefully examine the restaurant’s offer: “Present this coupon and receive one free, four-topping, individual-size pizza.” That’s it. No sneaky backdoor clauses. No “Buy One Get One Free” shtick.

The intent, says the restaurant’s manager, Gordon Clark, was to win over some new customers. But Clark got more than he bargained for. At first, patrons were slow to redeem the coupons. But, gradually, people found out about the offer, and not just tourists. Locals, too. Two-foot stacks of The Last Great Road Trip disappeared overnight, and great waves of pizza-eaters flooded the restaurant. A full-blown phenomenon was afoot.

Janna Swales found out about the coupons in the middle of July. By the time they expired last month, Swales had taken BP up on its offer about a dozen times. (In the interest of full disclosure, this author will admit to plenty of hoarding himself, having even used the coupon three days in a row during a particularly vulnerable week.)

For Swales, a free-coupon night at BP was more than just a dinner out, it was an event. “The first time I used them, my mom and dad were in town, so I decided to take them out for dinner.” The coupons also bridged gaps. “It changed from a tourist thing to a local thing. Those are two groups that don’t tend to mingle.” And they made great gifts: some people cut them out and gave them as birthday presents, others gave stacks of them to the local food bank.

But someone was bound to get the raw end of the deal. Enter the restaurant’s serving staff. “I’ve heard horror stories of groups of 10 or 20 people going in, ordering water with their free pizza and not leaving a tip,” says Swayles. Nevertheless, BP never failed to live up to its end of the deal. Says the now-converted Swales, “The whole thing was handled in a classy way.”

Nunavut’s long-suffering internet users have been burned before. An Alaska company planned to build a fibre optic line through the Northwest Passage and never followed through. A polar satellite project is taking a leisurely stroll through the plumbing of the federal bureaucracy.

The latest tantalizing sign that Nunavut might one day come to know the joys of fibre optic broadband internet come in the form of Arctic Fibre, the brainchild of Doug Cunningham, a Toronto-based venture capitalist and veteran of the telecommunications industry.

If you’re interested in the technical guts of the idea, here’s a direct link to the power point presentation. But overall it’s pretty simple: A fibre optic cable connecting London and Tokyo that travels 15,000 kilometres through Canada’s Arctic archipelago, connecting Iqaluit, Cambridge Bay, a handful of other Nunavut communities and Tuktoyaktuk.

Cunningham says there’s once again growing demand for bandwidth internationally, following a price glut in the wake of a fibre optic building boom in the late 1990s. But with a wave of superphones and tablet computers flooding the market and mushrooming demand for bandwidth in developing Asia mean large fibre optic projects are once again viable.

One part of the project supports the other, Cunningham says. Without the demand for bandwidth between two of the world’s main financial centres, the Arctic segment of the project (which would also connect communities on Alaska’s North Slope) wouldn’t be feasible, and vice versa.

“If we didn’t have the increased traffic demand from international carriers, we couldn’t justify this route,” he says. 

The cost of the project is pegged at $640 million. Cunningham says he has the financial backing for Asian and European telecommunications firms, and is looking to ink deals with Canadian governments and telcos. In Canada, nothing is signed yet, but Cunningham has his eyes on internet service providers and supplying bandwidth to the Canadian High Arctic Research Station in Cambridge Bay. But he’s confident it’s just a matter of time until governments get on board, given the potential for using broadband to lower travel, healthcare and education costs.

And Cunningham says Asian telecommunications companies are looking for an alternative route to Europe that avoids choke points in the Mediterranean, Middle East and Asia where heavy marine traffic or seismic activity cause service disruptions. Or where politics can get in the way.

“We are providing a physically diverse route,” Cunningham says “We’re also providing a politically low-risk route for them, because if you’re trying to go through the Suez Canal right now, you worry about somebody pulling the plug.”

The cable is not fully financed yet, “but it will be,” Cunningham says. “I’m not wasting my own money — and I’ve put a significant amount of money into this — I wouldn’t doing this if I didn’t have confidence that I could recover my investment. It’s going to happen.” 

Essentially, the dream of a Northwest Passage, a quicker route from England to Asia, has changed only technologically, from press-ganged crews of Dickensian waifs unprepared for Arctic travel, to digital packets of stock market data. But the passage is quite literally a graveyard of dreams (and, you know, people).

Until that cable is installed, with information flowing through it, until Nunavummiut get to celebrate the end of $130 dialup-quality internet, I think it’s only natural for Northerners to remain hopefully skeptical.

— Chris Windeyer

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When Canada’s largest coffee chain came to Iqaluit, local cafes were forced to fight for their very survival. Chris Windeyer provides check-ups on all the businesses that made it out alive – and serves up a post-mortem for the one that didn’t.

It happens in small towns across North America. Chain stores and big box outlets come to a small town, undercut mom-and-pop shops, force them under and gut a city’s downtown as they sprawl into the suburbs.

But Iqaluit is not like most small towns in Canada. When Tim Hortons, the ubiquitous national coffee chain, arrived in Nunavut’s capital late in 2010, many feared it would stranglehold the town’s handful of sandwich and coffee shops and force them all to close. It did the opposite. Along with its reliably-caffeinated, if unremarkable, brew and its “always fresh” donuts, Timmies also whipped up a healthy spirit of competition. For those in the city’s coffee business, the arrival of those trademark brown paper cups offered an object lesson in rudimentary capitalism. It was time to adapt or perish.

The result? The weak died out and the surviving businesses got stronger. Iqaluit’s food service industry has never been better: more options, better quality, lower pri… actually, never mind the prices. But if you’re hungry in Iqaluit, and you don’t want to cook for yourself, your options have never looked so good.

*******

When the mighty Hortons opened three kiosk-style locations around town – the result of a deal with the North West Company, whose Northmart and Kwik Stop stores serve as the franchise’s storefronts – it was inevitable that some businesses would perish. The chain dominated the Iqaluit coffee scene instantly, which proved fatal for one long-standing coffee stalwart. Fantasy Palace, a coffee shop near the city’s airport, disappeared shortly after the national franchise set up shop.

I hate to say it, but Fantasy Palace had it coming. Long-time Iqaluit residents will tell you about a time when it sold savoury, homemade soups and delicious fair-trade coffee. But those glory days were long gone. In the days before they closed, the coffee tasted like dishwater, the sandwiches were mushy, the hot chocolate was mediocre.

And the service sucked: I once ordered lunch there and was told, upon requesting a napkin, that there were none. Could I have a piece of paper towel? I asked. Sorry, I was told, the shipment hasn’t come in yet. But I needn’t worry about getting mustard on my shirt, for I was invited to help myself to toilet paper from the men’s room.

But after capitalism killed Fantasy Palace, it granted the opportunity for another entrepreneur to fill a glaring market demand: Iqaluit now has its first shawarma joint.

After four years working up north as a jack of all trades – driving a cab, working security, and so on – Khldoun El-Shamaa and his father-in-law, Hassan Abdulghani, opened Yummy Shawarma this past April, in the old Fantasy Palace location, after buying out the coffee shop’s owners. “They were not doing too good because of Tim Hortons, coffee shops, gas stations – everywhere there’s coffee,” he says.

For Yummy Shawarma, Fantasy Palace’s struggles helped remove what’s probably the single biggest obstacle facing any new retail business in Iqaluit: the lack of storefront space. It’s virtually impossible to find, and given the astronomical cost of construction in Iqaluit, building from scratch is not an option for a small entrepreneur. “We were looking for a place for a while, but there was nothing available,” El-Shamaa says.

Then came the standard pains of starting up. The place had to be renovated. Equipment – including three of the iconic spits used to turn chicken, beef and donair meat – had to be bought (they can cost up to $2,000 each), shipped up and installed. Then there are the cost pressures that every business must face but which are especially severe in Iqaluit. Power rates went up about 18 per cent this year. Supplies have to be flown up, further inflating food prices that are on the rise globally. The cost of living in Iqaluit means employees need relatively high hourly wages to make it worth their while. Keeping staff has been tough, El-Shamaa admits.

Then there’s the added challenge of introducing a type of food Iqaluit has never seen before. El-Shamaa says the most popular menu item is a Lebanese salad served with sliced roast chicken over top. The place is busy at lunchtime, feeding throngs of downtown worker bees, who form a growing base of loyal customers. The retail prices are obviously higher than one would expect down south, but the portions are huge. El-Shamaa is optimistic that Yummy Shawarma is here to stay. “Everybody likes it, that’s the main thing,” he says. “We don’t want to be millionaires, we just want to live off it.”

*******

So what about the rest of the competition? The coffee shops that had a better product than Fantasy Palace did – did they get shoved out, too?

No. Iqaluit did not repeat the experience of so many small towns faced with strong-arm franchise brands. The difference: the competition survived.

For locally owned businesses, there was no question of competing with Tim Horton’s prices. Everything is more expensive in Iqaluit; consumers expect that. And besides, people generally don’t choose one coffee shop over another to save a quarter per cup. They opt for convenience, quality or brand recognition.

So instead, the local stores adapted, opting for change instead of the ignominious end that Fantasy Palace met with.

Brian Twerdin and his wife, former Iqaluit mayor Elisapee Sheutiapik, have owned the Grind and Brew café since 1999. But with rumours circulating that Tim Hortons was on its way, Twerdin foresaw a major drop in traffic to his coffee shop, and so began plotting an updated menu. “We knew what was coming,” he says. “We figured if they came to town we’d certainly lose a lot of business, so we had to do something different.”

The stakes were high. The Grind and Brew – nestled in a tiny bungalow on the city’s waterfront, across the street from a string of fishing shacks – is an Iqaluit landmark. Its main items are adequate coffee and the legendary “Eye Opener,” a greasy, bacon-and-processed-cheese breakfast sandwich that’s fuelled many a workday and soothed many a hangover. Many of the Grind and Brew’s regulars are your classic small-town coffee shop old farts: businessmen, pastors and former cabinet ministers sit around, chewing the fat and talking hockey.

While the Grind and Brew loyalists held steady after Tim Hortons opened for business, Twerdin says the number of casual customers dropped off significantly. But then business rebounded. “Maybe some tried Hortons and came back here. But I can remember the first month or so. It was very quiet. I remember I got a call from a newspaper down south when Tim Hortons first opened, asking how it impacted this place,” Twerdin recalls. “When he called here, there was only one customer in the place and it was nine o’clock in the morning. I let (the reporter) speak to the customer. That’s how dead it was.”

Twerdin and Sheutiapik further developed the catering half of their business, and they expanded their menu, adding pasta, Asian food and, most importantly, pizza. The latter was a glaring hole in the Iqaluit food sector since The Snack, Iqaluit’s round-the-clock supplier of grease, dropped pizza from their menu some years back. Grind and Brew shipped up a pizza oven, which can easily run you $10,000 or more, and started selling slices at the store, and offering delivery too.

I recommend the pork barbecue pizza, although Twerdin says the Grind and Brew special, loaded with pepperoni, bacon, green peppers, mushrooms and onions, is the top seller, followed closely by that old reliable, pepperoni. Regardless, where Iqalummiut once had to settle for frozen grocery store pies or Pizza Hut Express offerings – really just pizza-like food objects seemingly conjured out of petroleum, high-fructose corn syrup and radioactive waste – they now enjoy the genuine article. And the old standard, the Eye Opener breakfast sandwich, with either toast or English muffin, is still available.

Through it all, Twerdin seems to have scarcely broken a business sweat. “I learned a long time ago that you always have to be ready to diversify,” he says. “You’ve got to make a change or come up with a plan.”

*******

Rainer Launhardt swears Tim Hortons’ impending Iqaluit touchdown had nothing to do with Caribrew Café’s decision to renovate, but it seemed a timely choice for the busiest coffee shop in town to make. As a result, they’re still the busiest café in Iqaluit – even with Timmies around.

Launhardt is the vice president of hotels for Calgary-based Nunastar, which owns Astro Hill, a sprawling complex that includes a movie theatre, bar, hotel, conference centre, office buildings, the café and the tallest apartment building in town, locally known as the eight-storey – all of it perched on a hill in the middle of the city. With hundreds of workers and residents constantly milling around, Astro Hill may well be the business nexus of Iqaluit.

With all that traffic, Launhardt says it was time for the Caribrew Café to expand its lineup of coffee, muffins, soup and sandwiches, noting the changes were complete by the time Tim Horton’s set up shop. The menu has grown to include pizza, curry, salads, mozza sticks and hummus. “We saw the trend at the Caribrew,” he says. “Food business was definitely increasing and customers were looking for different items, more selection. In order to grow, we made a decision to expand Caribrew and offer a lot more food.”

Coffee sales are down, which is not a surprise, Launhardt says. But the new menu items have more than made up for the downturn in business. “We made the right decision to expand,” he says. And he adds that the Caribrew has more than a few coffee diehards, proving that while Tim Hortons’ predictable, high-caffeine blend is popular, it’s not universally appreciated.

*******

The cost of establishing a business in Iqaluit, not to mention the scarcity of available real estate, serves to protect independent incumbents from the predation of well-funded national restaurant chains. Generally, the buildings that contain fast-food outlets have to be built to spec, an impossibility here. A franchise must meet very specific criteria, follow company protocol, and often buy everything it needs directly from the mother corporation. In the south, uniformity is often the path to profitability. But Iqaluit’s harsh market conditions have killed chain stores in the past. A Subway franchise died out because its reliance on fresh vegetables (shipped by air) pushed the cost of a foot-long sub close to $25. The place was as quiet as a tomb at lunchtime.

On the other hand, a mom-and-pop operation can wing it. Any old place with a grill and a vent will do. There’s no need to test new menu items with focus groups. Have people asked for it? Do we know how to cook it? If yes, then let’s sell it.

Tim Hortons’ ubiquity, more than the quality of its products, may be the real draw for Iqalummuit because so many residents are non-Inuit southerners or Inuit who have lived in the south for school or other reasons. It’s a taste of the south; no longer must the city rely on airline passengers returning north, box of donuts in tow, as was the ritual for many years.

And this is the real draw: Tim Hortons is Canada’s security blanket. There’s simply one everywhere you look. Driving the Trans-Canada and need a pit stop? It’s perfect. Remember that cloying commercial in which a Yukon Timmies installed a hitching post for customers arriving on horseback? Such a good neighbour! The company even created a bilingual logo specifically for Iqaluit in which “Always fresh” translates in Inuktitut into something like: “It seems like the coffee was just made.”

Although these efforts are endearing, they’re also kind of sad. Canada is a country so lacking in self-confidence and identity that there was room for a multi-national corporation to steal a place in Canada’s psyche. But this exalted position is false because really, it’s only coffee.

Still, you have to hand it to them. Growing from a single location in Hamilton, Ontario in 1964 to 3,600 stores in Canada and the U.S. today, Tim Hortons relies on relentless expansion for its continued profitability. And that’s why you open a restaurant – any restaurant – in the first place. As the first successful franchise to operate in Iqaluit, perhaps they are truer to their slick marketing scheme as Canada’s patriotic choice than we would like to believe.

And so the Tim Hortons empire now stretches to every corner of the homeland. As Canada’s official motto goes: A mari usque ad mare. From sea to shining sea. 

This week: liberal manic depression; Christopher Hitchens; Soviet mapping acumen; Canadian sloth on a Northern university.

It’s a couple of weeks old, but Jonathan Chait has an interesting counterbalance in New York Magazine to David Frum’s piece lamenting the American right’s psychotic break. Chait’s theory has it that American liberals are depressed when Democratic presidents turn out not to be the radical saviours they hoped for. But in a world where both the left and right seem deluded into thinking that one day they might be able to rid the world of their political tormentors, Chait has no easy fix. In short, it’s this: there is always going to be an argument. “Since the glorious triumph of revolution never really pans out, eventually you’ll return to the alternative, bitching. But there is a third option that lies between the two – the ceaseless grind of politics.”

And on that note, we could not let pass the death of Christopher Hitchens this past week. There will be no shortage of tributes for the man, so there is no sense in belabouring the point. Politically, you could agree with him or not (or both). But more importantly he was simply the greatest English-language writer of his time and a relentless champion for independent thought. Many in the writing trade will be toasting him this weekend.

The Canadian Press’ Arctic ace Bob Weber dredges up a fascinating story about a dusty set of Soviet-era maps which indicate the USSR was routinely sending submarines through the Canadian Arctic during the height of the Cold War. Soviet subs appear to have audaciously sailed right through the Nares Strait, between two key NATO installations: Canada’s Alert and the American airbase at Thule, Greenland. The maps include numerous depth soundings that are more detailed that what Canada currently possesses. Given that the ship they were found on, the Akademik Ioffe frequently operates as a cruise ship in the Canadian Arctic, someone from Ottawa could buy a ticket and update our maps for much less than what we’re spending on current mapping projects.

Every once in a while, someone down south pops up and denigrates the very notion that Canada should build a university North of 60. There was a lively and productive debate amongst Northern Twitter users this past week about what a Northern university could look like. The suggestions were all over the map, but let’s hope from such messy beginnings some kind of clear plan begins to emerge. An institution of higher learning is a basic pillar of a functioning society. The North should not accept lazy excuses for why it can’t be done and start figuring out how it can be done.

Shortly after we named him our Entrepreneur of the Year, Jeff Philipp of SSI Micro won a major victory in his ongoing battle with Northwestel. Coincidence? Uh, yeah. It was total coincidence. Credit us with good timing, but not clairvoyance.

Shortly after our profile hit newsstands, the CRTC ruled Northwestel must allow local telephone competition in the North, effective May 1, 2012. This is good news for SSI Micro, which has been chomping at the bit to offer local phone service, but was thwarted because Northwestel didn’t have to allow access to its phone system.

“We’re extremely happy with the decision,” Philipp said today.

Northwestel now has to allow competitors that access, and it has to allow customers to take their phone numbers with them if they move to a new service provider. In the past it resisted, saying its equipment would require millions of dollars in upgrades. The CRTC, in turn, ruled Northwestel needs to submit a plan to modernize its network, and that, for now, the company can’t pass on the upgrade costs to consumers: its request for a $2 per month rate hike was also shot down by the regulator.

Northwestel spokeswoman Emily Younker told me yesterday the company was still going over the decision and wasn’t ready to comment. We’ll be happy to post their response here when it comes.

Leonard Katz, the CRTC’s vice president for telecommunications, said Northwestel is the largest remaining regional monopoly in Canada. The regulator has been following the mantra of greater competition over the last decade or two, and Northwestel’s time to enter that new market landscape is now. The CRTC’s view seems to be if Northwestel isn’t ready, that’s their problem.

“New guys can come into the marketplace under a different business model because they don’t have the burden of all these wires and infrastructure that’s been around for a long time and needs to be constantly maintained,” Katz said. “So I think there will be more competition.”

Some of Northwestel’s infrastructure is so old, it can’t support modern services like caller ID and it can’t take connections from new competitors yet. It’s been given six months to come up with a plan to make upgrades over the course of two years. But the law of the land is that local phone service is open to competition, right now. In Fort Nelson, Inuvik, Iqaluit, Whitehorse and Yellowknife, Northwestel’s switches are new enough that competitors could essentially plug in and go.

The ruling also means that if/when a new company begins offering local phone service, customers can take their Northwestel phone number with them to a new service provider. If your number is (867) 555-5555 with Northwestel, it will stay that way with a new provider. This is a big deal, because without “local number portability” getting a new phone number is a pain in the neck. You’re probably not going to go to a new phone plan to save five or ten bucks a month if it means you have to throw out all your business cards and update your website.

But if you’re waiting for SSI Micro or Honest Bob’s Discount Telephones or whomever to launch a new service tomorrow, don’t count on it. “This was a very big, positive policy decision,” said Dean Proctor, who advises SSI Micro on regulatory matters, “but it’s not complete yet.”

SSI’s precise next steps depend on another looming CRTC decision. They also asked the CRTC to examine the wholesale price Northwestel charges for access to its fibre optic backbone linking Yellowknife to the South. Proctor and Philipp claim Northwestel is inflating the wholesale cost by 3000 per cent, making it more expensive than retail. Northwestel, without giving exact figures, says SSI Micro is wildly exaggerating the markup. But there is a markup. The regulator needs to decide if it’s fair.

This is not just an internet issue. A copper wire might still run between your home phone at the main line outside, but that traffic still enters and leaves the traffic along the fibre optic backbone. It’s all digital data these days. 

In Nunavut and parts of the NWT served by satellite, SSI owns its own data connection. But in Whitehorse, Yellowknife and other centres connected by fibre they don’t. This would affect the pricing of any phone — cellular or landline, it’s all data remember — service SSI would provide. I get the sense SSI has some plans up their sleeves, but they appear to need a decision on the “backbone issue” first. The CRTC’s Katz said that decision could come down before the end of January.

We need to know that decision before we know what the future of Northern telecommunications is going to look like exactly. We know SSI wants to compete in the phone market. We may see other entrants: Telus, for one, took part in the CRTC’s hearings in Yellowknife. But the CRTC has made it abundantly clear: competition is the new watchword North of 60. Northwestel will have to adjust. 

—Chris Windeyer

The CRTC issued its long-awaited ruling today on local phone competition in the North and the news is not good for the incumbent Northwestel.

Starting May 1, 2012, Northwestel will be required to allow competitors to hook in to their local telephone exchanges under what’s called, in the florid parlance of telco bureaucracy, “local number portability.” All it means is that companies other than Northwestel can provide phone numbers with 867 area codes to customers, whether the phone service is provided traditionally or via VOIP.

Under the terms of the CRTC’s ruling, competition is now a go in Fort Nelson, Inuvik, Iqaluit, Whitehorse and Yellowknife. Northwestel must provide access to the telephone network within six months of a competitor’s request.

Northwestel had argued that local competition would be far too costly to implement without passing on costs to consumers, but the CRTC noted Northwestel will get $20.5 million in subsidies (collected from a levy on southern telephone bills) and will pull in nearly $70 million in revenue this year. That’s why the commission also shot down a Northwestel request to raise local phone rates by $2 per month.

This statement from the CRTC’s news release is illuminating: “[T]he CRTC found that Northwestel has insufficiently invested in its network despite its strong financial performance during the past few years, and is concerned that the company’s aging infrastructure is affecting the quality and reliability of its service.”

We’ll have more about this in the January issue of Up Here Business, but in the meantime, my profile of SSI Micro founder Jeff Philipp contains much of the backstory to today’s decision. You can read it here, or you can buy it on the newsstand (please buy it on the newsstand). 

Exactly how this shakes out over the long term obviously remains to be seen, but we know that competition elsewhere has caused dramatic drops in telecommunication costs for consumers. So for landline subscribers in the North’s major centres, it’s a new dawn this morning.

—Chris Windeyer

Clarification: The CRTC’s decision opens competition in all communities served by Northwestel. Leonard Katz, the CRTC’s vice president of telecommunications, told me today that the five communities mentioned above are the ones where Northwestel will be required to make phone numbers available to competitors.

This past Friday night I left a downtown bar with my girlfriend and stopped for a minute at the corner of Franklin and 50th to smoke a cigarette before we headed home.

The scene resembled a small riot. Five or six adults chased and attempted to pummel a couple who were trying to leave. A teenaged girl violently accosted another girl – apparently a former friend – who was in tears, right in the middle of the intersection, oblivious to traffic. A man, dressed in red longjohns and an overcoat, with some kind of metal phallus chained to his left ankle fell flat on his face on the sidewalk, much to the amusement of his friends.

Even after five years in barf-in-a-taxi, fall-down-in-a-snowbank, go-to-the-wrong-house Iqaluit, it was still a shock to me.

So yeah, we have a bit of a booze problem in the North. No secret there. Nor is the fact that this problem stems from a complicated stew of social, economic and historical factors. It will take years of coordinated and sensible policy, and a lot of money, to sort this mess out.

Here in Yellowknife, the downtown business community has long argued that the chaos of Range Street is driving business out of the city’s core. So city hall is organizing a roundtable on the matter, set to start after Christmas.

Let’s hope the process moves faster than in Nunavut, where a review of the territory’s liquor act, once Jan. 1 rolls around, can be said to have been going on for years. The first public meeting was held in March, 2010 and there’s still no word on when recommendations might be forthcoming to government.

That’s not a surprise, given that the Aariak government seems destined to be eyes-deep in studies when the horn blows at the end of its mandate in 2013.

According to Quttiktuq MLA Ron Elliott, the tension over Nunavut’s liquor review is between those who want a total ban (either for biblical reasons or out of sheer desperation), and those who want to completely deregulate alcohol sales (either for libertarian reasons or to slash bootlegging).

Meanwhile, communities in both the NWT and Nunavut muddle along as best they can with the limited tools available to them. Rankin Inlet’s municipal council recently enacted its annual Christmas booze ban, over the objections of one councillor who said bootleggers already stocked up months ago in preparation for selling during the blackout.

And Norman Wells just went the other direction, voting to turf daily limits on alcohol sales at its liquor stores, much to the chagrin of other communities in the Sahtu, who fear a flood of liquor brought back by travellers passing through Norman Wells.

There are a couple of common themes in all of this. The first is bootlegging. The simple iron law of things is that demand creates supply. Make alcohol illegal and people will buy it illegally, and that pushes prices up. In some communities in Nunavut, a 60-ounce bottle of Smirnoff will go for $400 or more. In homes with addictions problems and kids, that money, when spent on booze, is literally food stolen from the dinner plates of children.

That leads to the second, which is that prohibition is an utter failure in stamping out the worst impacts of alcohol abuse. It hasn’t worked with alcohol (or drugs). It only encourages bootlegging and crime, infantilizes people, encourages binge drinking and discourages responsible alcohol use.

But neither will total deregulation serve the greater good here. In Kugluktuk, the establishment of an alcohol education committee, at the behest of the community’s fed-up children, caused a dramatic drop in alcohol related crime.

Ultimately, I can’t sit in my downtown Yellowknife office and declare that any given Northern community should do any one thing. Different communities will require different solutions. But it seems that harm reduction is a more realistic guiding principle than the ideal (to some people, anyway) of total sobriety.

The one thing that seems clear, and that governments seem to be finally warming up to, is that culturally appropriate, Northern-based addictions treatment is the key missing piece right now.

“If we could only solve some of the problems of addictions with some action… so many other issues would become less of a problem than what we have here before us today,” said Yellowknife Centre MLA Robert Hawkins in the assembly Dec. 9. “We would have less crime, less violence, fewer people on income support. We would have healthier families, fewer babies born who are sick, who are with illnesses, better educational outcomes and a much less strain on our health system.”

In the long run, treating addictions now will save all of us a lot of money, and a world of heartache.

— Chris Windeyer

Jeff Philipp is more than just a tech genius and visionary thinker – he’s a feisty fighter who’s taking on the biggest kid in the schoolyard. Story by Chris Windeyer. Photo by Patrick Kane.

For the most part, Jeff Philipp works the floor of the Nunavut Trade Show like anyone else. He hops from booth to booth, chatting with friends and acquaintances seen only a few times a year. Maybe he grabs a free pen or two. But that’s where the similarities end between Philipp and the throngs wandering around Iqaluit’s drafty Arctic Winter Games Arena. The difference: Philipp knows how to connect his iPhone to the local WiFi network (Apple phones don’t work on Iqaluit’s creaky CDMA network, owned by Northwestel and its parent company, Bell). Then, to add insult to injury, he connects up with a voice-over-internet-protocol (VOIP) program to place a free, long-distance phone call to his office in Yellowknife. And he does all this while standing brazenly in front of the Northwestel booth. Philipp knows the Northwestel guys know what he’s doing. He’s just engaging in some playful psychological warfare.

 It’s hard to talk about Philipp and his company, SSI Micro, without talking about Northwestel. SSI Micro has spent so much time and money trying to pry Northwestel’s fingers off two separate telecommunications monopolies – local phone service across the territories, and control over the internet linking Yellowknife to the south – that Philipp often ends up looking like Northwestel’s nemesis.

Philipp has come a long way. What started out 22 years ago as his tiny Fort Providence, NWT computer sales business has grown into the North’s second-largest telecommunications provider, dominating Nunavut’s internet business through the satellite-based Qiniq service, and providing an alternative to Northwestel’s internet offerings in the Northwest Territories.

But Up Here Business’ rambunctious Entrepreneur of the Year isn’t done yet. Not by a long shot. Instead, Philipp wants to provide local phone service, expand its internet offerings and, eventually, challenge Northwestel and the mighty Bell Canada Enterprises in the booming cell phone market.

In short, he wants to take Northwestel’s lunch money. Not so much for the cash, though that would be nice, but because for Jeff Philipp, competing in the telecommunications industry is fun.

Over lunch with Philipp at an Iqaluit restaurant, I suggest that he might be the supreme pain in Northwestel’s ass. Philipp winces. “I’m not trying to be,” he says, going to great lengths to point out that he harbours no personal hard feelings against anyone at the North’s Ma Bell. Nevertheless, 2011 will be remembered as the year when SSI Micro’s slow-boiling insurgency against Northwestel flared into a full-scale assault.  

Things came to a head in October when the two companies squared off during a CRTC hearing in Yellowknife. As Philipp argued, SSI wants to compete in local phone service, but it can’t. For instance, when SSI recently launched a VOIP service called Chatbox in Nunavut, it did so without access to Northwestel’s local phone switches. That means prospective Chatbox subscribers can’t get phone numbers with 867 area codes. “We can phone anywhere in the world and have it be crystal clear, but we can’t phone across the street,” says Dean Proctor, SSI’s resident legal guru. Current CRTC rules are the hurdle: Northern local phone service is strictly reserved for Northwestel. In regulatory parlance, the company is known as an “incumbent local exchange carrier,” a term reserved for what’s left of the old telephone monopolies.

For its part, Northwestel says opening up local phone service in all 96 Northern communities would cost somewhere between $30 million and $39 million, an expense that would be passed on to consumers. As a compromise, it has suggested the CRTC open up local phone competition gradually, starting with just the three territorial capitals.

But SSI’s concerns don’t end there. The company also wants the federal regulator to force Northwestel to slash the price it charges all other companies for wholesale access to the fibre optic internet connectivity running from High Level, Alberta to Yellowknife. SSI Micro claims Northwestel is marking up that wholesale cost by 3,000 per cent above southern rates, while the retail price it charges Northern subscribers is only about 30 per cent higher. “It’s effectively squeezing out all competition in the marketplace,” Philipp says. Northwestel maintains Philipp has his numbers wrong.

Regardless, Philipp’s patience has run out. In his mind, if SSI is ever to offer cheaper services to Northern customers, he needs the CRTC to see things his way.

 

Philipp has business in his blood. He grew up in Fort Providence – population, 750 – where his parents basically were the town’s private sector. His father Sieg moved to Canada from East Germany shortly after WWII.

The senior Philipp started as a diesel mechanic with the Northwest Territories Power Corporation, installing some of the first diesel power plants across the North. The family owned and operated the Snowshoe Inn, from which SSI Micro gets its name, alongside a stable of other businesses: a café, gift shop, video store, arcade, construction outfit and, for a time, the Fort Providence ferry.

During the mid-1980s, Philipp bounced back and forth between his hometown and British Columbia, where he went to high school and trade school. While backpacking in Germany, he met Stefanie, who came from Frankfurt to Canada for school and stayed for Jeff. In 1989, they got married.

Along the way, Philipp got his mechanic’s ticket from Camosun College in Victoria and a pilot’s licence. “I just wasn’t interested in university. It just wasn’t something that I felt was my passion.” Computers, it turned out, were. He’d gotten into programming during high school, discovered he had a knack for it – and promptly got into trouble with his teacher.

“I got kicked out of class. I was too disruptive because the teacher didn’t know enough,” he says. “But for three years I got to write my own curriculum, approved by the headmaster. I got to work in the computer lab instead of in class, got to do my own thing and really excelled at software.”

At SSI’s headquarters in Yellowknife, he takes me into a second floor boardroom to sketch out how Chatbox works on a whiteboard. He draws a little satellite here, a computer there, a telephone, swooping lines and arrows connecting the whole thing. His baritone voice booms into the hall. Stefanie comes in to tell him to dial it down a notch for the benefit of workers across the way. “You’re his friend now because he’s being loud,” she tells me.

“I’ve always believed that you’re at your best if you’re doing what you love,” he says. “Nothing else really matters. Now, that is a tough statement maybe, because a lot of people aren’t given the option of doing what they love. They took a job because they need money and they have a family to support. And I was very fortunate growing up in Providence where my parents were working and we had a small business and I liked the community.”

A fascination with how stuff works, and how to make stuff work better, has served as SSI’s modus operandi over the years. The company has built its own networks largely from scratch, right down to the billing software. Admittedly, it’s a system that’s also left SSI open to complaints from some users that the service is still too slow. Nevertheless, Philipp’s overarching goal is building a telecom network for the North, says Jeremy Childs, who’s worked with Philipp for 18 years and now serves as SSI’s director of software development (although his business card is notably free of any titles). If Philipp is the ideas guy, Childs is the nuts-and-bolts guy. “Jeff is a really dynamic guy,” says Childs. “He’s always got different ideas and for all this time I’ve just been chasing around trying to realize these ideas and take them and turn them into something concrete.”

As I speak with Philipp back in Yellowknife, Childs comes over with a new wireless transmitter he’s pried open. It’s an amped-up version of your typical home wireless router; two or three of them would turn a whole office building into a WiFi hotspot. The two men examine the guts of the thing like two gearheads peering under the hood of a hot rod. “We’re all sort of technologists at heart,” Childs says.

A passion for ideas is one of the things that attracted Stefanie to Jeff when they were dating on Vancouver Island in the 1980s, and it continues to this day, she says. He’s a guy who’s excited to get up and go to work in the morning. She should know, serving as she does as SSI’s chief financial officer. Working in the same office is not always easy, she acknowledges, but they’ve made that work too, even if he sometimes does exhibit some of the classic, scatter-brained traits of creative types.

“For years it was a party trick for us because he couldn’t remember Valentine’s Day, or even what month Christmas was in,” says Stefanie. “But he would remember anything and everything he’s ever read in a technical magazine. His brain is just wired that way.”

 

It’s easy to become enthralled with SSI Micro’s Yellowknife headquarters as a workplace. Six years ago, it was a derelict Quonset hut next door to a gas station. Today, it’s an attractive, wood-paneled, two-storey office building with a spacious deck on the front. Philipp worked out a sweetheart lease with the owner, gutted the building and created an open-concept workspace that immediately brings to mind dot-com-boom era Silicon Valley. Dogs putter around the halls. An employee reads Elizabeth Hay’s Late Nights On Air during a mid-afternoon break. Front-office staffers rib Philipp as he poses for photos. 

The break room is the crown jewel. It boasts a big, bright, yellow kitchen stocked with fruit and candy. A coffee grinder and locally roasted beans take the place of giant tins of Maxwell House. There’s a shower, an electronic drum kit, a pool table and a fridge stocked with many tasty-looking beers. A similarly equipped facility is under construction for SSI’s Ottawa office, in a former Kanata strip club that went out of business after the dot-com bubble burst and laid waste to Ottawa’s tech sector, whose employees were the club’s intended clientele. SSI even maintains exhaustive charts tracking beer demand by brand, so the fridge stays full of what people actually want. The variety is pretty impressive: everything from Budweiser to Guiness to Grolsch. A sign above the fridge door reads, “SSI Microbrewery.”

The cost of running the break room is tracked and analyzed: it works out to $1.50 per hour. But the price is worth it, says Philipp. A customer service rep having a bad day should not be delivering customer service, he reasons. So if they need a break, they should take one. It’s also a convenient place to jam over a few beers after the workweek is over. “This is the kind of place we want to work in,” he says.

 

Talk to Philipp about business and one word comes up repeatedly: competition. Sure, SSI Micro stands to profit if the CRTC issues rulings opening up the Northern market. But all that decision would do, Philipp says, is bring the North in line with everywhere else in the country, where deregulation long ago triggered a flood of competition and a corresponding drop in prices.

But Northwestel may not be so easily moved. Outside of government and the mines, it’s one of the North’s largest companies, with 500 employees scattered across the territories and northern BC and Alberta. Northwestel played a central role in how the territories gradually became connected to the rest of the world. It has always been the dominant player.

  In 1947, Canadian National Telegraphs, as it was then called, got the contract from the federal government to operate the telephone line that ran alongside the newly-opened Alaska Highway, a connection that was as much about Cold War posturing as it was about Northern development. Later, CNT was bought out by Canadian National Railway – then a Crown corporation – and renamed Northwestel. In 1988, it was sold to communications behemoth Bell Canada Enterprises.

Canada’s telecommunications industry was deregulated during a wave of changes in the 1980s and 1990s. Crown corporations were privatized, creating larger competitors like Telus, which grew from an amalgamation of BC Tel and Alberta Government Telephones.

Competition in the sparsely populated North was slow in coming, though. That’s in large part because there’s always been little to no money in providing conventional telephone service in most Northern communities. But local phone service is obviously essential, so Northwestel has always been required by the CRTC to offer it, even though it’s a loss leader. By the company’s own estimate, a phone line in an isolated Northern community costs $100 to provide, and the basic monthly phone bill is limited to $31 (though Northwestel recently applied to the CRTC for a $2 increase). The balance of that cost is made up by some $21 million worth of annual subsidies collected from southern phone customers and doled out to Northwestel.

If the CRTC opens up local phone competition, or forces Northwestel to slash prices for access to the internet pipeline to Yellowknife, Philipp predicts a flood of big-name carriers like Rogers and Telus expanding into the North’s larger centres. Which raises a question: Could Philipp’s regulatory fight result in – as he so delicately puts it – SSI Micro “shitting in our own cage”? It just might – but he’s fine with that. “If it gets opened up, great,” he says. “If everybody has a chance, it won’t be just us building new stuff, it’ll be people in the south who see a huge opportunity up here to deliver their service and they’re going to be able to do it fairly.”

Philipp could be wiped out, but at least he’ll have had a fighting chance. “If I fail to compete in that environment, that’s my failing. That’s the market. But that doesn’t even worry me, and it’s not because we won’t fail against some people. It’s not that there’s nobody more clever than us or more competitive. It’s because the world is a huge place, and we don’t have any assurance of work. So if we can’t make it in the internet market in the North on a fair playing field, we should go and do something else. We should be mechanics or pilots or whatever else.”

Northwestel is not so cavalier. Curtis Shaw, Northwestel’s vice president for consumer and small business markets, says opening up local phone service would cost at least $30 million, and he warns that customers would end up footing the bill. Shaw acknowledges more services, demand and competition will inevitably arrive North of 60, which is going to put more pressure on everyone. And it’s worth noting, as Shaw does, that as far as Nunavut is concerned, SSI Micro is the dominant internet service provider. Northwestel only offers such service in Iqaluit.

SSI’s satellite-based Qiniq broadband network was hailed as a breakthrough when it launched in 2005. But since then, the internet’s integration into every facet of Northern life, and a corresponding growth in bandwidth-hogging Java, Flash and multimedia-laden websites, means both companies are straining to meet demand. The result is that what’s called “high-speed internet” in Nunavut – no matter who provides it – bears little resemblance to actual high-speed internet in most of the rest of the world. Just ask anyone who’s watched in frustration and amazement as a 30-second YouTube clip takes five minutes to stream.

The lobbying and feasibility studies for improved Arctic connections have already begun. As a rule, satellite bandwidth is staggeringly expensive, as is, not surprisingly, launching telecommunications satellites. The Canadian Space Agency is studying the feasibility of launching a pair of polar-orbiting satellites that would provide extra bandwidth, as well as imaging and weather services, at a rough cost of $600 million. But the soonest those satellites would be in orbit is 2017.

Others, including new NWT premier Bob McLeod, say the answer lies in fibre optic cables. Supporters imagine a world where Nunavut can tap into the fibre link in Greenland, or Inuvik can see its download times reduced thanks to a cable travelling up the Mackenzie Valley. Their advantages, including faster speeds, are undeniable, but the technology is too expensive to install, says Shaw. Ultimately, he adds, the federal government is going to have to invest in more communications infrastructure for the North.

 

The CRTC won’t issue a ruling on SSI Micro’s complaints until the end of this year, possibly not until early 2012. Regardless of the outcome, Philipp’s wired personality – his inability to settle for the status quo – guarantees he will find something to do. In the last few years, SSI has gone international, offering wireless services in places like Barbados and the far-flung, south Pacific nation of Kiribati, which, much like Nunavut, is sparsely populated and lacking a fibre optic connection. Unlike Nunavut, though, Kiribati is near the equator, meaning it has easy access to satellite transmissions, not to mention year-round shipping routes.

Philipp has also been active in South America, where SSI has been getting into the lucrative cellular phone service market in cities written off as too small by major operators. At 50,000 to 100,000 people, however, these cities are easy pickings for a company like SSI, which is willing to dive into the market. Compared to offering internet in Nunavut, that’s a cakewalk. “One of the beauties of the North is that it’s the hardest market we’ll ever have,” Philipp says.

But whether developing its products gets any easier for SSI is outside Philipp’s hands. Indeed, much of the company’s growth up North depends on the outcome of the CRTC’s decisions. In spurring the federal regulator to make a call on whether SSI Micro can offer local phone service, or be able to compete with Northwestel in the internet market, Philipp is no doubt looking at his own bottom line – anxious, especially, to grab a bigger piece of the lucrative Yellowknife market. But it goes beyond that, he insists. It’s also about improving the North’s access to the wider digital world, which, in these days, ranks right up there in importance with food, water, shelter and health care. It’s about quality of life, really.

Speaking of which: Philipp wants to retire to the break room and pull a few lagers from the fridge, but he’s cutting it a little close to a previously-scheduled mid-afternoon business meeting. On goes the blazer. Happy hour will have to wait.

 

This week: The best and worst punditry on Attawapiskat; swearing; the looming end of email; spays and neuters on wheels

The National Post’s John Ivison pens an execrable column on the housing crisis in Attawapiskat, in which he basically suggests the Canadian hinterland is less a key part of the national identity than extravagant burden for the allegedly besieged high-bracket taxpayer. But without the hinterland’s natural resources, the Canadian economy would right now resemble that of Greece or Italy, so who’s zooming whom here? Bottom line here John: you really need to get out of the 613 area code for a while. And no, Muskoka doesn’t count.

Further to the above, the Yukon News’ Al Pope strikes again by pointing out what Ivison failed to mention (and which a quick Google search would have revealed): Attawapiskat actually does have an economic rationale. I’m no economist, but a diamond mine is pretty good for GDP, I think. For all the howling about $90 million over five years going into Attawapiskat, the $500 million per year that De Beers’ Victor mine produces seems like a decent trade off for the good taxpayers of urban Canada.

And in a post that quickly went viral, this blogger breaks down the $90 million in federal funding Attawapiskat received over the last five years. For a fly-in community of 2,000 people, this hardly seems an outrageous sum. 

On a more amusing note, Nunavut MP Leona Aglukkaq, the federal health minister, and NDP MP Pat Martin (he of the Carlin-esque Twitter outburst), found themselves on the receiving end of a goofy prank this past week. A fake Health Canada news release supposedly “announced” a tax credit for seniors who shovel their own snow. Martin’s “response,” as the Winnipeg Free Press reports, was a lurid stream of cuss words, including no fewer than 10 in one sentence. I used to consider myself a master stylist of obscene prose, but I am humbled now.

 A French high-tech company is phasing out the use of email on the grounds that it saps productivity, opting instead for chat programs, or, you know, face-to-face contact. Sounds like a good idea, but I worry about text-speak seeping into intra-office communications: “OMG our third quarter earnings r up big time!!! u guys did awesome 4 real!!!”

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Iqaluit pet owners got some long-awaited and welcome news this week. Leia Cunningham, who grew up in the Nunavut capital, is back as a fully-licensed veterinarian with a clinic-on-wheels that’s fully equipped to do spays, neuters and vaccinations. Could the days of the “Iqaluit special” – the weird crossbreed of dog spawned by the random couplings of the city’s many disparate roaming mutts – be numbered?

Nunavut Tunngavik Inc., the land claim organization representing the Inuit of Nunavut, finalized a new policy governing resource revenues during its annual general meeting in Cambridge Bay last week. Among other things, the policy sets out a 12 per cent baseline royalty rate and establishes ground rules for the regional Inuit associations to negotiate further benefits. NTI estimates it stands to haul in $500 million in royalties in the next six years and billions more over the next 20 years.  The policy also lays out a formula for distributing those benefits. Associate editor Chris Windeyer spoke with Terry Audla, NTI’s chief executive officer, about the new policy and what it means for Inuit, industry and government.

How did NTI settle on 12 per cent as a royalty rate? It’s been in existence since 1997. It’s nothing new at all. That’s not our ceiling, it’s our basement, it’s our starting point. If you look at the policy itself it’s worded that anything greater than 12 per cent will actually have to be negotiated with the regional Inuit associations.

And that will be on a case-by-case basis? Yes. What NTI’s saying is that any company that comes in, they’ve known for a while now that the royalty would be 12 per cent at a minimum.

And 12 per cent is the going rate on Crown lands. Yes. That’s where Inuit organizations initially got the 12 per cent royalty. It was felt at the time that anything over and above the 12 per cent the regional Inuit associations would negotiate within an Inuit impact benefit agreement.

Will NTI have anything to do with those negotiations? No. What we do for IIBA purposes is set minimum standards and leave it to the regional asssociation to actually negotiate on behalf of their region. The region being impacted would have to benefit.

Was there any concern that this new policy would serve to discourage any miners or exploration firms? No, I wouldn’t say. They know that going to any area where aboriginal groups are involved that there are minimum requirements. You have the Crown rate and then you negotiate an IIBA. That’s pretty much common throughout the country and it’s not something industry is too afraid of based on the fact that it’s been common for a while.

So is this policy more about establishing the resource royalty trust than setting a rate? It was a combination of addressing the need to negotiate above and beyond 12 per cent and where that money would go, and at the same time, once we start receiving the royalties, how is that divvied up? Once its been divvied up then you have to establish a trust as well as figuring out how you distribute the money.

The policy is trying to ensure beneficiaries are well informed and that it covers all the factors that would be involved.

How do you foresee this royalty money being distributed in the future? We’re aiming for programs and potential scholarships and that sort of thing, being mindful of the fact that we’re not going to try to replace whatever the government is required to do. At the same time, the regional Inuit associations will have the independence to make those determinations for their beneficiaries as well.

When it comes to distribution to individuals, it has to be approved by the membership only during the annual general meeting, and it has to be approved by 75 per cent of the members. A lot of people assume that distribution to individuals is simple but it isn’t necessarily. There’s administrative implications, tax implications and everything else.

The GN has been agitating for a devolution agreement with the federal government to get access to royalties. Where does this leave the GN? The GN still has to go through devolution talks with the Crown. NTI will be involved with that process.

Inuit (through NTI) own 350,000 square kilometres of land and the rest of Nunavut is Crown land or municipal land. When it comes to the Crown lands, where there are subsurface rights, the GN would have the opportunity to have those discussions on devolution.

In the land claim, under the Nunavut Impact Review Board, there’s a socio-economic monitoring requirement. The argument is there that if there’s a mine and a strain on services, then somehow that community has to be resourced. It’s going to take a combination of the Crown, the GN and NTI to remedy some of those issues.

NTI has criticized the GN in the past for the GN’s failure to provide certain services like education and social services. But the GN doesn’t have a whole lot of money. Would NTI consider an agreement so that the GN gets a steady stream of benefits directly from the projects that are going to be coming online soon? That would be taking away responsibility from the feds for working out a devolution agreement.

What we’re talking about is actual, specific Inuit-owned lands that we own outright. So it’s our iron, it’s our gold and it’s company A or B that comes in and actually digs it out of the ground. What we’re saying as owners of the land is that we collect a royalty. The Crown does as well.

So for us to take that money and turn around and give it to the GN for whatever purpose, it’s going to have to be done in such a way that weighs the pros and cons and whether or not it actually benefits Inuit to the optimum level of encouraging the self-reliance that the land claim requires.

But again, there is more Crown land out there than there is Inuit owned land. We had to give up a lot (during the land claim negotiations) to gain some. But if a community is in dire need of facilities for the health of the community, then there’d be talks with both levels of government to see what NTI or the regional Inuit association, the feds and the GN could do to make things better.