By Darren Campbell -- In tiny Fort Simpson, NWT, Nogha Enterprises has managed to get a $4-million gas bar, restaurant and camp-accommodations complex built. They did it by forming a joint venture and without government money. Welcome to the future of business North of Sixty.

In the winter of 1810-1811, a Northwest Company fur trade post known as Fort of the Forks – located on Simpson Island, near the site of present-day Fort Simpson, NWT – came upon hard times. Arctic hare, the winter survival food for aboriginal and non-aboriginal people alike, were nowhere to be found. The weather was so cold and the ice on the Mackenzie River so thick, nets could not be set under the ice to catch fish. And so employees of the trading post faced a dire situation – no hares, no fish, no food. In desperation, they turned to eating fur pelts. But that didn’t help. Four people subsequently died at the post during the month of March and it was abandoned the following spring.   

Dennis Nelner, the general manager of Nogha Enterprises, hopes the 2009 reincarnation of the Fort of the Forks will turn out better for Nogha and its partners than the original did for the Northwest Company. Nogha, the economic arm of the Liidlii Kue First Nation in Fort Simpson, is gambling that a recently built $4-million accommodations complex, convenience store, restaurant and gas bar named after the ill-fated trading post will pay off. But he’s also hoping this joint venture between Nogha, Landmark Logistics and catering giant Sodexo Canada – developed on the outskirts of the village of 1,200 people with no government money – will be a model copied by other aboriginal businesses across the North. “We took the Nike approach – just do it,” says Nelner. “There were naysayers, but this is a good news story.  It’s encouraging coming from this region.”

The Deh Cho region is located in the southwest corner of the territory and is home to eight small, sleepy communities, including Fort Simpson. If anyone outside the NWT has heard of the Deh Cho, it’s likely because that is where the Nahanni National Park is or because some aboriginal organizations here – particularly the Deh Cho First Nations – have developed a bit of a reputation this decade for being anti-development crusaders.

But the region also has considerable economic potential, particularly when it comes to oil, gas and mining. And it was that potential Leo Hardy, president and CEO of Landmark Logistics – a Norman Wells-based investment company – had in mind when he started applying for land near Fort Simpson in 2006 with the idea of building a truck stop.
Although Hardy now makes his home in Alberta, he was born and raised in the hamlet of Tulita, another tiny NWT community located in the Sahtu region. Hardy is aboriginal and a Sahtu land claims beneficiary. He’s also a businessman who once owned the Rayuka Inn hotel and restaurant in Norman Wells back when it was known as the Narwhal Inn.

Hardy could see there was potential for some serious economic activity in the Deh Cho. He had also seen how a settled land claim (the Sahtu Dene and Métis Comprehensive Land Claim Agreement came into effect in 1994) could provide aboriginal people with the authority to participate in that activity on their own terms. While there is no settled land claim in the Deh Cho, negotiations between the DCFN, of which Liidlii Kue is a member, and the federal government are ongoing and it’s understood that no work gets done in the region without aboriginal buy-in.
The first piece of Hardy’s puzzle was finding a partner with deep enough pockets and a willingness to build such a facility in Canada’s hinterlands. He managed to do that by bringing Montreal-based Sodexo to the table. The second piece of the puzzle was getting the support of aboriginal people, which he did by bringing the Liidlii Kue First Nation in as a willing and enthusiastic partner. He also managed to get support for the project from the Fort Simpson Métis Council and the village council.

Hardy admits he also had an agenda in pursuing the project beyond making a profit. As an aboriginal businessman, he is familiar with the bad old ways of doing business in the North. The days – 20 or 30 years ago – when aboriginal people were not consulted about work done on their land and thus derived minimal benefits from it. He is also aware of how difficult it can be for aboriginal groups to find capital to start up their own businesses. He wanted to help change that and show other aboriginal people how it could be done, without begging the federal government for seed money and grants that came with strings attached.

“How many businesses do aboriginal people in Fort Simpson own?” Hardy asks rhetorically. “There are all kinds of blockages to us getting into business. We often can’t get working capital because we are new to the game. In this case we found another way to do it.” The other way to do it was a joint venture.

By definition, a joint venture is a strategic alliance between two or more parties, usually businesses, that form a partnership to share markets, intellectual property assets, knowledge and, of course, profits. The concept isn’t a new one. In fact, many aboriginal groups in the NWT with settled land claims have employed it.

The Inuvialuit have been using it to their advantage since its claim was implemented in 1984 – the successful joint venture Aklak-Canadian Helicopters Ltd. being just one example. To the south of the Inuvialuit, the boom that accompanied the opening of the first of three NWT diamond mines in the late 1990s has seen the Tlicho First Nation’s economic development arm – the Tlicho Investment Corporation – enter into numerous joint ventures to take advantage of the job opportunities the mines inside its traditional territory have provided.   

But in the Deh Cho, joint ventures haven’t been as common. That’s partly due to a lack of progress between the federal government and the DCFN in settling the land claim, which makes business reluctant to invest here because key issues like land ownership and what areas will be off-limits to development are unsettled. But it’s also due to the Deh Cho being somewhat of an economic no man’s land.

For all it’s potential, there isn’t a great deal going on in the Deh Cho. Oil, gas and mining companies view the Deh Cho warily. The DCFN, particularly during the years Herb Norwegian was grand chief, became infamous for its opposition to a Mackenzie Valley pipeline going through its region and for favouring a land-use plan that protected large chunks of the Deh Cho from development – much to the chagrin of the mining industry. 

Nelner agrees that Norwegian’s five-year reign as grand chief from 2003-2008 may have cast a chill on investment in the region that has yet to thaw. (Norwegian was ousted as grand chief during a special assembly in January 2008, after he pled guilty to assaulting a woman in December 2007). “It’s hard to get people to move beyond that because that’s all they have been exposed to,” Nelner says. 

However, the Fort of the Forks is one attempt to show that investment in the Deh Cho region can pay off. Right now, Fort of the Forks doesn’t look like much, set as it is on a dirt-filled, yet-to-be landscaped, nine-acre patch of land a few kilometres outside of Fort Simpson. But it’s a big deal for the region: The facilities include 48 rooms, each with its own satellite television and bathroom. There are meeting rooms, an impressively stocked convenience store, a restaurant and, of course, pumps where you can gas up. Hardy says there is also room on the site to put in another 150 rooms if things get really busy.

Nelner says Nogha has sunk approximately $300,000 into Fort of the Forks in development costs. Nogha, Landmark and Sodexo all own portions of the business, although none of the parties will say how much each partner owns. What they will say is Landmark and Nogha have the option to buy Sodexo out after 10 years and take over the business completely.

And by then, the Deh Cho and Fort of the Forks could be busy places. The future of the 1,200-kilometre Mackenzie Valley pipeline doesn’t look promising right now, but no regulatory decision has been made yet, and it could still be built. If it does go ahead, it will have to pass through the Deh Cho, bringing with it job opportunities both during and after construction – thanks to oil and gas exploration a pipeline of this size inevitably spurs.

Completing an all-weather road through the Mackenzie Valley – the road now ends in Wrigley, one of the eight Deh Cho communities – is another multi-billion dollar project that could provide Fort of the Forks with a lot of business. And then there is Canadian Zinc Corporation’s Prairie Creek project. The proposed lead, zinc and silver mine located west of Fort Simpson is undergoing an environmental assessment by the Mackenzie Valley Environmental Impact Review Board, which is expected to be completed in late 2010. If the mine gets the regulatory go ahead and goes into production, it would employ approximately 225 people and have a mine life of 10 years.

It’s projects like the Prairie Creek mine and the extension of an all-weather road up the Mackenzie Valley that the Fort of the Forks joint venture is designed to take advantage of. Not only would the complex provide gas, food and lodging to the many truckers and contractors that would pass through the area doing work for the mine or driving goods up a new all-weather road, but it will be the training ground for Liidlii Kue’s members and provide experience the joint venture can use to secure the big camp and catering contracts from Canadian Zinc and other resource extraction companies.

“Sodexo is not here because of our good looks. They see an opportunity,” says Nelner. “Companies like Canadian Zinc and Selwyn (Resources Ltd.) are in various stages of development here from exploration to setting up a mine. What smart companies do is partner with first nations now and then prosper. We’re not going to be in a recession forever.” 

Nelner and Hardy’s vision for Fort of the Forks is to see locals get needed training and experience in the camp and catering industry from Sodexo – learning how to be waiters, cooks, cleaners and hotel staff. And by the time the major activity happens – pipelines, highways, mines, whatever – the joint venture will have the staff, knowledge and track record to eventually take over managing and running the business completely.

Of course, the big jobs Hardy and Nelner hope to land have yet to materialize and there is no guarantee they ever will. The recession has caused headaches for businesses in the region and isn’t helping to attract investment. The Saskatoon company contracted to build the complex went bankrupt midway through construction, delaying completion by six months. And the completion of Fort of the Forks, which was scheduled to have its grand opening this month, surely has ruffled some feathers among established Fort Simpson businesses in the accommodations and food industry, like the Nahanni Inn. It all makes residents like Marie Lafferty, president of the Fort Simpson Métis Council, wonder if building Fort of the Forks was a wise move by Nogha and its partners.

“We wish them well but they’ve taken on that business in hopes the pipeline will go through and things are a little slow there. So I don’t know how they’re making out,” says Lafferty. “It’s provided a few extra jobs. But I’ve heard wages are quite low. Hopefully they are going to pay a decent wage.” 

If the business goes through some early rough patches, at least Nogha and Landmark Logistics know they have a heavyweight like Sodexo in its corner. With 12,000 employees in Canada, the company is no stranger to working with aboriginal businesses and organizations. In fact, it’s had a gold level status in the Canadian Council for Aboriginal Business’s Progressive Aboriginal Relations program since 2003. The program requires companies to measure their performance in developing progressive business relations with aboriginal people in four areas: employment, business development, capacity building and community relations. 

The company impressed Nelner because when the Fort of the Forks project was being pursued, Sodexo was the only one that offered Nogha an ownership interest and a promise to build it before any big development activity happened. “Other companies only offered a percentage of the profits when things happened,” says Nelner. “Sodexo said, ‘We are going to build it now.’”

Hardy also has plenty of kind words for his southern partner. “They’re well respected and well-known in the aboriginal business world,” he says. “They are fair and have the capacity to train our people and end up with us running our own operations. There are good joint ventures and bad ones. We feel we have a good one.”   
But whether this joint venture ends happily, with everyone making a handsome profit and meeting their goals, depends on some big, expensive, uncertain projects going forward. If they go ahead, all is well, and the modern version of Fort of the Forks will surely avoid an unfortunate fate like the one suffered by that little trading post at the confluence of the Liard and the Mackenzie Rivers 200 years ago.