By Sara Minogue -- Now 25 years old, the Inuit birthright corporation Qikiqtaaluk Corp. has built a business empire while creating jobs for Inuit in the Baffin region. With operations in mining, real estate, fisheries and, of course, the Baffin Gas Bar, the company has enjoyed six straight profitable years. But does QC have a vision for the future of Baffin Inuit?
Baffinland Iron Mines’ plan to revive the Mary River iron ore project – announced in 2004 – brings to mind the storybook giant invited to lunch with the Queen. Where, in the story, palace servants stacked grand pianos on grandfather clocks to build a table for their outsized guest, the junior mining company sketched plans to berth 18 small barges, side-by-side, to create a makeshift dock in Milne Inlet. It was a trial run for the end goal: to move a mountain of rock from Northern Baffin Island to the steel mills of Europe.
The near mythical feat would never work without lots of manpower and plenty of support from the communities that relied on the caribou that roam the area. To solve two problems at once, Baffinland called on Qikiqtaaluk Corporation, the birthright corporation of the Baffin Inuit. By August of 2008, QC’s wholly owned Qikiqtaaluk Logistics had almost 300 workers on site, 87 per cent of them Inuit. Their wages funneled $6-million into the homes and businesses of struggling local communities, and made profit a reality for some Nunavummiut for the very first time.
In this and other ventures – from commercial fishing to real estate holdings to pumping gas – QC was doing what it was set up 25 years earlier to do: create meaningful economic, employment and career development opportunities for Inuit. Baffinland’s operations manager, Al Gorman, says the contract with Baffinland was so successful there is “undoubtedly” a future role for QC if the mine gets off the ground. That kind of praise from a business partner can’t be discounted. And perhaps QC has its house in order. But was the Baffinland deal a product of skill that can be built upon to secure future contracts for QC, or was it a matter of being in the right place at the right time – and the only option for Baffinland?
To many Iqalummiut, QC is known principally for its blue-dome debacle, which began when the company bought the sales pitch of a Florida company that said its geodesic domes were the way of the future. (For more on QC’s missteps, see sidebar, page 34.) But the shy and unassuming president of QC, Peter Keenainak, says the QC of today is stronger than ever. Sitting in a simple downtown office, Keenainak smiles slyly as he recites the numbers. In their sixth year of near-steady growth, revenues were up 120 per cent, from $48.3-million in 2007 to $106.3-million in 2008. Profits more than doubled, from $2.9-million to $5.9-million. By summer’s end, QC had more than 400 people on the payroll, four out of five of whom were Inuit.
At 45, this is Keenainak’s 11th year with the company and his third as president. This year’s astounding jump in revenue is an anomaly, he admits, stemming from two things: the contract with Baffinland and the unexpected sale of the gleaming new Qikiqtani General Hospital, which the Government of Nunavut decided to buy instead of lease.
With the $20-million of contracts with Baffinland finished and the global economy in a tailspin, QC will not soon see a repeat of the 2008 numbers. But Keenainak says QC remains in a strong position.
The company is very diversified,” he says. “We don’t concentrate on mining alone. We don’t concentrate on fishing alone. We have a pretty solid investment in real estate. If worst comes to worst, we could fall back on that.”
There’s a general agreement among Iqaluit’s business community that Keenainak is right. “There are a lot of development corporations in the aboriginal business world that are kind of shell outfits that people try to exploit for their own purposes,” says Brian McLeod, who was QC’s president from 2004 to 2006. “QC’s pretty much the opposite, where it’s a real, solid business.”
Asked whether the company is riding on luck or skill, McLeod has an answer ready. “You have to be able to take advantage of opportunity, and I’d attribute it to good management for the past five or six years.”
Hal Timar, the executive director of the Baffin Regional Chamber of Commerce, says QC has already proven itself to be a boon to the region. “They set the standard for Inuit employment,” he says. “Who else could have done what QC has done for Baffinland? Who else can mass the Inuit workforce like they can?”
One thing that can be said about QC is that it has come a long way in the past quarter century. “It was sort of a paper company to begin with,” says Iqaluit’s Bruce Rigby, who became one of QC’s first full-time employees in 1984, one year after the company was first incorporated. Rigby worked with Qiujisaqtit Associates, the research arm of the then- fledgling organization. (Qiujisaqtit means “research” or “study” in Inuktitut, but also, in some Baffin communities, “peeping tom.” In 1986, the name was changed.)
Qiujisaqtit investigated a range of possible business opportunities, from eco-tourism to airlines to credit unions, but the research was a side event to the main attraction: fish. QC’s mainstay, almost from day one, was an offshore shrimp-fishing license, which it soon augmented with a joint venture with Makivik Corporation to create Unaaq Fisheries, which still exists today.
When Jerry Ell joined the company as president in the fall of 1997, royalties from the shrimp fishery still accounted for most of the corporation’s revenue, which was well under $1-million. In short order, he renegotiated the shrimp royalties, securing much more than the previous rate. “That was from knowing the world prices on shrimp,” he says.
Ell also set about working his contacts to find new business for the company, starting with a deal with the federal government to clean up the former U.S. military site at Resolution Island, 300 kilometres south of Iqaluit. That ultimately led to a nine-year, $65-million project that wrapped up in 2006, the year that the project’s manager reported that birds and insects had returned to what was once the worst PCB-contaminated site in the Arctic.
That success led to other contracts, including the decommissioning of the Polaris mine, the clean-up of the Fox-C DEW Line site near Clyde River and, just this year, a contract to clean up Cape Christian, a U.S. military post abandoned in 1974. Ell also helped QC get involved in the Larga Baffin medical boarding home in Ottawa, a joint venture with Nunasi Corporation. Just this year, the company secured a 20-year deal with the Nunavut government to replace that building with a brand new facility.
In the years leading up to 1999, QC also participated in the Nunavut Construction Corporation. It’s a subsidiary of the Nunavut Investment Group and a consortium of the three regional development corporations, which had been handed big contracts to build badly needed government infrastructure in anticipation of a brand new government. QC is still part of NCC, which is now working on phase three of its three-part Inuksugait Plaza apartment and office complex in Iqaluit.
Despite the early successes, the fledgling company came perilously close to dying just a few years ago. In 2000-2001, QC posted losses close to $2-million, and saw an exodus of senior staff. Seven years into his reign, Ell was forced out of the company, accused of fraud and mismanagement. He was later cleared, but the episode damaged the company. Keenainak recalls a board meeting in Iqaluit in 2003 where the primary topic of conversation was whether QC could continue to exist. The answer, the board decided, was yes. Two years later, QC had cuts costs and was back in the black, buoyed by management fees from the Qikiqtani General Hospital project and income from contaminated site clean-ups. The past six years have been consistently profitable, with a slew of businesses in operation.
The royalty-based fishery is now a joint venture with Nataaqnaq Fisheries in which QC owns a 51-per cent stake. The venture owns the $10-million MV Saputi, which trawls for shrimp and turbot in the rich fishing grounds off Baffin Island. Returns have been marginal of late – thanks to low shrimp prices, high fuel costs and a high Canadian dollar – but quotas are still money in the bank and the fishing industry has great potential for Nunavut and QC.
Qikiqtaaluk Environmental, a joint venture with Montreal’s Sinanni Inc., is also gathering steam. Last year, the company collected more than $1-million in contracts, including a deal to get rid of waste from Nunavut Power Corporation’s 25 diesel generation plants across the territory. QC also has an ownership interest in Nunavut Eastern Arctic Shipping, which is breaking into the sealift business in the region.
In Iqaluit, QC’s most visible storefront enterprise had a record year. The Baffin Gas Bar, an eclectic mix of small-town coffee stop and ultra convenience store, saw sales go up by more than $1-million. The staff, 16 out of 18 of whom are Inuit, is a model for Inuit employment in the city.
Things are going less smoothly across town at Frobuild, a lumber supply shop that QC bought three years ago. Sales were marginal to begin with. Then, in early November, a cargo ship carrying 700,000 pounds of building supplies was turned around at Kuujjuaq, Nunavik after Nunavut Eastern Arctic Shipping’s beachmaster determined ice conditions made it unsafe to unload in Iqaluit so late in the season.
“That hurt,” says Chris West, QC’s manager of retail operations. Frobuild is now working with contractors to decide what needs to be flown in and what can wait until next shipping season.
It gets worse – QC has an ownership interest in NEAS, and while Frobuild was one of the businesses worst hit by the shipping snafu, it’s not the only one. Contractors across town are scrambling to explain to customers why their projects will be held up. At least one is contemplating a lawsuit against the company.
And at least one of QC’s hoped-for projects is on thin ice. Last fall, the company bid on a 20-year project to provide medical boarding services for the Government of Nunavut in Iqaluit. The contract was recently awarded to the Nova Group of Companies. QC has taken the GN to court to attempt to turn that decision around.
Despite the setbacks, Timar sees QC’s breadth of operations as a selling point that makes the company an attractive partner for any number of southern businesses looking to work in the North. “At the end of the day, small- and medium-sized businesses drive the economy across Canada,” he says. “Creating small- and medium-sized businesses is what QC is doing.”
Former president Ell, on the other hand, says QC has lost some of the initial excitement that came with its creation. “Compared to its potential, it’s just barely floating,” says Ell, who now works full-time as a carver in Winnipeg.
He says QC should be looking at bigger opportunities, like the deal he once worked on to bring new generators to communities and lease them to the Nunavut Power Corporation. He’d like to see the company take the public private partnership model from the Qikiqtani General Hospital – the first of its kind in the territory – to other infrastructure needs, such as arenas, community halls and schools. “They could solve the territory’s housing crisis,” Ell says.
For QC’s ultimate owner, the Qikiqtani Inuit Association, the company’s recent performance is more than satisfactory, and not just because of the half-million-dollar dividend presented at its annual general meeting this fall.
Terry Audla, QIA’s executive director since 2001, says Inuit employment, no matter the industry, is the end goal for his association’s business arm.
“In my opinion, probably the best way to put money into your pocket is to earn that through a salary,” he says. “There’s more of a sense of pride to it, and there’s more of a sense of ownership and responsibility.” Despite the boondoggles and missteps, QC seems to be meeting that goal. The challenge now is to build on its successes and to not repeat its failures.
Sara Minogue is a writer based in Iqaluit. During her time as a reporter with Nunatsiaq News and CBC North, she’s often reported on the Qikiqtaaluk Corporation’s fortunes.
