Business in Saskatchewan in the Time of COVID-19 and Beyond

A Discussion on Saskatchewan from the New Normal to What’s on the Horizon

By Brook Thalgott    Photos by Glen Schuler

On July 7, 2020, armed with public health guidelines and plenty of hand sanitizer, we gathered business leaders from various sectors across the province to discuss business in Saskatchewan—from the “new normal” to what lies ahead. Led by Wanda Hunchak, Executive Vice President of Westcap Mgt. Ltd., a local investment fund manager that, over the past three decades, has invested more than $1 billion into over 200 Saskatchewan companies through its diverse funds, including Golden Opportunities Fund and the Westcap MBO Private Equity Funds. The group included Grant Kook, Westcap’s President, CEO and Founder and leaders from its portfolio of companies: Natasha Vandenhurk (Owner/CEO, Three Farmers Foods), Casey Collins (CEO, Prairie Meats), Garth MacDonald (CEO, G-Mac’s AgTeam), Blair Flavel, (President, Degelman Industries) and Rob Harasymchuk (Director of Operations, Maxie’s Excavating). Together, yet separated, they pondered the pandemic’s impact on business and what the future holds for the province’s entrepreneurial community.

Laying the Groundwork

Hunchak began by asking about the founding principles for doing business in Saskatchewan. Kook has seen the economy change over the last 30 years since Westcap was founded as one of the first portfolio fund managers in the province registered with security regulators. “When we first started in this province, it was really an ag economy,” says Kook. “Over the course of time, things have changed. We found out that we have a tremendous mining sector. We found out that we have potash, uranium, coal, diamonds, and now helium. We found out that oil and gas didn’t stop at the borders. Over the course of time, we became a province with agriculture, mining and oil and gas—a three-legged stool.” While these sectors dominated the provincial economy then, Kook notes that in the last 10 years innovation has come out from the shadows and into the forefront. Westcap was involved in early investment in this space. “We are proud to have played a part in this,” says Kook.He sees that innovation—new technologies, new products and new processes—has now become the fourth pillar for Saskatchewan’s economy. Kook notes that this has now turned our province’s stool into a chair—much more stable and diverse. “We went from an economy where there was little capital, for small to medium-sized enterprises, while Saskatchewan people were exporting their hard-earned money out of the province, to one of the fastest growing innovation ecosystems in Canada with out-of-province investors stopping and saying—’we better take a look at what’s happening in Saskatchewan’.” Over the last three decades, the mindset has changed to supporting companies here at home, and there is local capital available for Saskatchewan companies to grow here which creates jobs and impacts our economy and local communities.

While Saskatchewan’s tech ecosystem is growing by leaps and bounds, what hasn’t changed is what we offer the world, notes Kook. “We’ve always had food, fuel and fertilizer. The only thing that is different now is that the world recognizes it.” Kook also comments that Saskatchewan has always been an export driven economy and we realize just how important we are to the rest of the world. He also comments that “fundamentally, we keep investing in these leading Saskatchewan companies due to the work ethic and culture of our people which has never changed.” This extends to Westcap’s long-standing executive and senior leadership team that has a century of investment expertise combined working with local companies here in Saskatchewan.

"Fundamentally, we keep investing in these leading Saskatchewan companies due to the work ethic and culture of our people which has never changed."

Grant Kook
Westcap Mgt. Ltd.

The Pandemic in the Room

To put the past few months into perspective, Hunchak shared some recent eye-opening statistics. “According to the Bank of Canada, Canada is officially in a recession following Q1 2020.We have had five recessions in Canada since 1961 but not one of them has compared to how fast or how deep our GDP has been impacted as with COVID-19,” says Hunchak. “It’s the steepest, fastest slide in the last 59 years since we’ve been tracking this data.” While all the companies in the room were essential services or allowable businesses (as defined by the Saskatchewan government) and continued to operate, the threats posed by the pandemic to life and livelihood were not taken lightly.

Kook noted that the first thing Westcap did was focus on an efficient remote work environment for their team saying, “we needed to make sure our team and their families were safe and then turned our attention to our portfolio companies.” Westcap focused on people first and cash flow second. The team ensured proper safety protocols were established within their portfolio companies to protect employees and customers, and then shifted to ensure portfolio companies had the liquidity they needed to weather the storm. Next, and as Kook mentions equally important, they reassured their thousands of investors and stakeholders that their investments which Westcap manages had good fundamentals and would endure the pandemic.

And then, Westcap turned to see where they could help the community. Through their Virtual Hugs initiative, Westcap worked closely with the COVID-19 Hospital Fund and donated $250,000 for over 330 iPads and data plans to be delivered to the 158 Saskatchewan Health Authority publicly funded long-term care homes across Saskatchewan, so that residents could connect with loved ones virtually to help alleviate loneliness and isolation during this time. “During this pandemic we lived by the motto that how we treat our employees, our stakeholders, our investors, and the broader community at large is how we’ll be judged after COVID-19,” says Kook.

Feeding the Province

During times of crisis attention turns to the necessities. Everyone needs to eat. A well-known industry leader for providing quality meat products for over 35 years, Prairie Meats worked in overdrive to continue production to keep food staples—like ground beef—on their shelves. They also focused on helping remote communities in the province that were impacted by buying restrictions as the pandemic took hold. “It was our responsibility to make sure that these rural and remote communities had access to food,” says Casey Collins, CEO. The company used its inventory and distribution channels to ensure that rural and remote regions of the province had the food supplies they needed. While most people know Prairie Meats as a retailer, its primary business is in wholesale. “We opened up our delivery channels not just to our wholesale customers, but to the general public. This provided options and the ability for people to take care of their family,” says Collins. “A lot of our team members are from remote regions, and they felt a sense of responsibility and gratification by making sure that they took care of their hometowns.” To make the changes needed to meet the demand, Prairie Meats shifted resources—in a hurry. “We had to adjust our model to meet demand as we started to experience what typically would have been an entire week of sales start to come all in one day,” says Collins. “We focused more on our retail channels, being creative and working with businesses in our wholesale network to help people survive through this.” Collins witnessed his customers and partners changing everything that they did overnight. “We knew that in the current climate, if we had an employee get sick or a family member get sick, we could lose our whole production facility, we saw it happen in other facilities across the country,” says Collins. “We had to change everyone’s schedule. We changed everything that we do in production and still tried to manage to produce the levels that our customers expect.” While it was a major adjustment, the company recognizes that they were able to accomplish much more than they ever thought possible. “This pushed us and changed how we look at our business going forward and what we are capable of,” says Collins. “This has definitely opened our eyes to the possibilities and where we can go in the next decade.”

"This has definitely opened our eyes to the possibilities and where we can go in the next decade."

Casey Collins
Prairie Meats

Strength in Local Supply Chains

Natasha Vandenhurk, owner/CEO of Three Farmers Foods, known for their local, healthy snack products, has found her company’s strength through the pandemic in its local supply chain. “All of our roasting is done here. All of our raw products are purchased from here. says Vandenhurk. “We were very lucky to have such strong local partners such as AGT Food and Ingredients where we source our chickpeas, our lentils and our peas,” right here at home. So, we didn’t see any disruption to our supply chain.”

They felt some significant disruption in their distribution channels and revenue streams. While major grocery chains were booming with shoppers ensuring they had enough food in their pantries, other snack food channels like drug stores, airports, and convenience stores saw declines. For Three Farmers Foods, opportunity presented itself as consumers moved their business online. “We saw a surge on our eCommerce platform. We had invested quite a bit of time building our Amazon platform in 2019 and were lucky to be up and running when this all hit.We saw revenues over double on those platforms, which was significant for us,” says Vandenhurk. The company also started to explore discount store options, such as dollar stores—which are now more than ever a major player in retail. “Hard discount is going to thrive in the long-term here. We look at different product lines that we could innovate and put into those stores that won’t directly compete with the rest of our business,” she says. “We are looking to innovate into healthy snacks and the natural and organic food channel is certainly growing.” Vandenhurk sees that the snack food category as a whole has been growing, but certainly healthy products within the snack foods space is also growing as demographics change, as well as consumers prioritize healthy eating. “People, now more than ever, are really focused on staying healthy and building their immunity to fight these types of situations. I think that’s going to certainly be one of our strengths in the long-term as well,” says Vandenhurk.

"People, now more than ever, are really focused on staying healthy and building their immunity to fight these types of situations. I think that's going to certainly be one of our strengths in the long-term as well."

Natasha Vandenhurk
Three Farmers Foods

Keeping Farmers Growing

The pandemic changed business for large manufacturers as well. Blair Flavel is the president of Degelman Industries, a cornerstone for Saskatchewan’s agricultural and industrial equipment, that has been innovating through the design and manufacturing of premium equipment for almost six decades. The company was born out of necessity when local farmer Wilf Degelman designed and built a rock picker in his barn—that piece of equipment would become the foundation for the company that carries his name today. Flavel notes that during more than 40 years with the company, he has never seen anything like the pandemic. “We’ve certainly seen, the peaks and valleys in the ag industry. We were anticipating a fairly strong spring 2020, our order books were good—and they remained good,” says Flavel. “We had to make sure we could safely fill those orders and deliver the product on time because our farmers were relying on that.” The company pulled their team together, sending home anyone who could work remotely and ensuring that the production team was safe. “In manufacturing, it’s impossible to work from home,” says Flavel. It is also hard to sell from home.In-person trade shows are a major part of Degelman’s sales and marketing strategy. But the industry and Degelman had to change. With tools like demo videos and online events, Flavel sees some aspects of remote sales sticking around. Degelman is building a social distancing trade show area across from their production facility in Regina so that customers can safely view and test Degelman equipment—something their sales team is looking forward to. As an international company, Flavel credits “innovation in product design and relentless commitment to quality, as keys to success.” “Innovation is how we have survived 58 years, listening to the farmers, the end user. Wilf always said that if a farmer is going to spend his hard-earned money he does not want to be fixing,” says Flavel. “We continue to follow this principle today—we build stuff that we stand behind.”

“Innovation is how we have survived 58 years, listening to the farmers, the end user. Wilf always said that if a farmer is going to spend his hard-earned money he does not want to be fixing. We continue to follow this principle today—we build stuff that we stand behind.”

Blair Flavel
Degelman Industries

Garth MacDonald leads G-Mac’s AgTeam—serving Saskatchewan farmers for two decades as one of the largest independently owned crop input retailers in Canada based out of Kindersley with 14 locations across the province. Like Kook, he notes the change that has happened in the province in the last 30 years, especially how farmers have shifted. “They’re excellent businesspeople … ready to excel in the future and ready to adapt,” says MacDonald. “Our farms have grown. The people running the farms are managers now. It’s more about growing, marketing, and adapting to innovation and technology.” That has impacted his business over the years and now, G-Mac’s AgTeam is a provider of technology innovation. Although COVID-19 did not slow down demand as the company is key in helping farmers continue to feed the world, it did force the company to shift its operation quickly. MacDonald says it showed G-Mac’s AgTeam how adaptable and dynamic it could be. “We all learned a lot about ourselves and our capabilities. Our productivity increased, we had one of the busiest and most efficient springs. Our people figured it out. It was really wonderful to see,” he says. “Health and safety is a priority. They also found new ways to adapt with new electronic technology for load tickets. “Our customers are used to coming in, having a discussion and maybe a cup of coffee,” he says. “Now, they stay in the truck.” The company changed the process to incorporate technology and to reduce contact. Customers like it, and the process is here to stay. “We had so many positive comments on being able to adapt,” says MacDonald. “I think there is going to be a lot of efficiencies and benefits created from COVID.”

"I think there is going to be a lot of efficiencies and benefits created from COVID."

Garth MacDonald
G-Mac's AgTeam

Infrastructure at the Core

Many have compared the economic impact of the pandemic to wartime economies and some of the most successful recoveries from those times was driven by investment in infrastructure—which the province of Saskatchewan has committed to. Rob Harasymchuk, is the director of operations for Maxie’s Excavating, one of the largest excavating companies in Saskatchewan with a strong reputation for “making it happen.” Over the past four decades the company has established their reputation across a broad spectrum of services including commercial, industrial and heavy civil earthwork construction, demolition and land development, rail services and emergency responses to environmental spills. The company is heavily involved in infrastructure construction, building roads, rails and terminals and Ag infrastructure has been one of its key focuses. This diversity kept the company strong when COVID hit. “I don’t think anybody could ever be positioned to deal with a pandemic,” he says. “But, we’ve always had many irons in the fire,” Harasymchuk says. “Ag infrastructure has always been really key to us. We’ve never been busier building grain terminals and rail lines.” Harasymchuk also knows how to drive impact in our local communities. “We work across Saskatchewan and when we come into a community, we ensure we give back. We stay in local hotels, we buy our parts there, we make sure our fuel is bought there. We keep our money in these communities,” Rob comments. “There is optimism…no one knew what we could do until we did it.”

"The common thread with everyone here has been the strongest Saskatchewan traits - adaptability and optimism. Through hardship comes great innovation."

Rob Harasymchuk
Maxie's Excavating

What Comes Next

As Saskatchewan adapts to its “new normal,” what is on the horizon for entrepreneurs and their local companies? Kook reinforces the diversification that our province has in place with its four pillars, and the opportunity for activity in these sectors. “If we get movement in these pillars, Saskatchewan is going to have significant economic growth and stimulus,” Kook says. With the infrastructure stimulus spending recently announced, Kook sees further confidence ahead. “We’re optimists in Saskatchewan. That’s how we were born and raised.” He adds that with transformational irrigation, another fifth pillar may emerge—the agri-food processing sector. “It’s great to export our commodities overseas. It’s even better to create value-added ag products—which in turn creates more wealth and jobs locally.”

“Westcap’s last three transactions are all right here in this room,” Kook notes motioning to the leaders of G-Mac’s AgTeam, Maxie’s Excavating and Degelman Industries. “They are all agriculture focused, but there’s another commonality that they have—succession planning.” says Kook, “Succession planning is a critical opportunity for growth as founders pass to the next generation of leaders to grow the business. When this time comes, Westcap is there as a partner to continue to help these companies grow while they remain local. “We will continue to be involved as a partner to ensure that these companies stay Saskatchewan-owned and create another cycle of innovation and an ecosystem for growth,” says Kook. “We won’t let outside investors come in and buy our Saskatchewan companies, take their head offices somewhere else…and when things get tough the first thing they do is kill the most important thing we have—the community and culture that these companies were built on,” says Kook. Westcap looks forward to continuing to work with these local companies, support succession planning and ensure that long-standing, generational companies with strong brands stay locally owned and continue to impact jobs and communities here at home.

For MacDonald, G-Mac’s AgTeam is focused on growth. The company has three parts to its strategy. “Strategy number one is to look after our existing customers and grow their business, in turn further growing our business. Number two is to expand to new customers, focusing on the neighbours of our existing customers that see how successful we can be. Number three is to expand to new areas,” says MacDonald. Remaining local and connected to their customers is important. G-Mac’s AgTeam continues to explore opportunities to grow here in Saskatchewan and work with far mers to add value to operations through their unique agronomy services.

Prairie Meats is also growing. The company recently acquired D&L Meats in Prince Albert, a company that has been in business for almost 30 years. Being a second generation in the meat industry, Collins is no stranger to the business, but with Prairie Meats’ founder officially retiring from daily operations in March 2020. Collins has experienced a busy first few months on his own at the helm of the company. “It was not necessarily a wake up in the industry, but this really forced me to look at the business with a fresh set of eyes and evaluate what’s happened over the years and not necessarily be tied to what we’ve always done,” says Collins.

Sitting in a room full of iconic Saskatchewan brands, Vandenhurk notes the value of a strong brand as Three Farmers Foods grows through strong local partnerships. “Our partners grow the products and raw goods,” says Vandenhurk. “We have the brand and proprietary production process to get them to the shelf.”

"We will continue to be involved as a partner to ensure that these companies stay Saskatchewan-owned and create another cycle of innovation and an ecosystem for growth."

Grant Kook - Westcap Mgt. Ltd.


Dispatch from the Frontlines

A conversation with Heather Haupstein, CEO, Golden Health Care

Due to the work that Golden Health Care does as one of the largest private providers of long-term care in Saskatchewan, and a key part of the portfolio of Westcap’s Golden Opportunities Fund, Wanda Hunchak caught up with Heather Haupstein by phone.

Golden Health Care residents are the most vulnerable in this pandemic, and Hunchak noted that Golden Health Care was well-prepared to respond and explored the impact to staff and residents. Their unique building design, and philosophy of care, made a major difference. “We break our large environment down into houses,” says Haupstein. “That gives us the ability to provide our residents with personal space in their suites. The design of our homes allows us to better protect our residents in these types of situations.” The design of their care homes meant that when COVID-19 hit, Golden Health Care’s homes were already organized into small clusters, so residents had their own kitchen and their own living room. Having residents and their care teams in small groups meant that there was no spread throughout their homes. Golden Health Care has been successful thus far in keeping COVID-19 away from its homes, protecting both their vulnerable residents and their staff members. “We have not had the virus come into our front door yet,” says Haupstein. “We have a wonderful care team that understands the importance of containing the virus and keeping it out of our home with proper hygiene and good protocols.” Golden Health Care has been proactive in its measures to protect residents and closed its homes to visitors prior to public health orders to do so.

Haupstein notes there is a cost to the lockdown. “It does come at a price. It is not human nature to be isolated. It changed the life of our staff and affects our residents. One element of keeping life secure in the home means keeping life outside the home from coming in. That by far has been the hardest thing for both sides. It has been hard for the care staff. It has been hard for the residents and it has been hard for the families.” Golden Health Care’s staff, as caregivers for people that are most vulnerable, also had to modify their lives off the clock. The company knew they were asking so much of their staff that they did what they could to ease the burden. “We set up grocery delivery for our staff to come to the home,” says Haupstein. Staff members could skip their grocery shopping and collect their orders at work. Plus, the company set up daily communications that not only shared important information and protocols, but also recognized the effort the team was making every day to keep our residents safe. The outpouring of appreciation from the communities and families of residents was significant for staff—the homes were filled with thank you signs posted outside the front doors.

Haupstein says that her business will not be the same going forward. “We have an invisible enemy. It’s like fighting a war. What do we need to do to keep everybody safe? And yet, what do we need to do to keep everybody healthy and happy mentally as well as physically? She does see it as a catalyst for change. “The focus is on the very thing that Golden Health Care always believed in, and that is how you build your homes has a huge effect on quality of life,” says Haupstein. “Business as usual is not business as usual anymore.”

Haupstein also sees what the future may hold in seniors’ care. “Long-term care is really under the microscope right now. They are looking at ways to have a much healthier environment,” she says. She hopes that the Golden Health Care model, and their philosophy of care, can help change how seniors are cared for in their golden years. And for Saskatchewan’s aspiring entrepreneurs, she advises that passion is necessary. “You need to have a service or product that you just truly believe in, right to your inner core,” says Haupstein.

Advice for the Next Generation

“I’m not calling any of us old, but we have quite a few years behind us and a lot of experience in this group” Hunchak jokingly turned the conversation to advice for the next generation. “If you have the right people and you share your vision with them, you’re all pulling in the same direction, that’s the key for success. And I think we have a leg up n Saskatchewan because we have a strong group of people that believe in the same thing,” says Flavel. “The key to success is passion. If you’re passionate about what you’re doing it will rub off on people,” says MacDonald. Like MacDonald, Harasymchuk is about drive and passion and encourages the next generation, “Don’t stop till they’re nailing shut your coffin. Don’t stall. You throw yourself into it. Give all you can give and it will pay off.” Collins sees Saskatchewan as a place to grow and have a family. “That opportunity exists here. You don’t need to move to a large centre to find that fulfillment and balance. This is the place where you can achieve it. You can succeed in your career and have a family. It’s unlike any other place.” Vandenhurk notes the value in learning and getting good advice. “First and foremost is cultivating continual learning within the organization. As an entrepreneur and now as a CEO of a growing company, you have to love to learn,” she says. “Secondly, we’ve really surrounded ourselves with strong advisors, we have a formal board that asks hard questions.” In closing, Kook advises young entrepreneurs to never fear making a mistake or failure. “I think the fear of making a mistake and having to pivot holds people back and that shouldn’t define failure.”

Hunchak wrapped up with a simple question “when we look back at 2020 and all that the year has brought, will you remember the challenges or the opportunities more?” Every person in the room said “opportunity,” and Saskatchewan is the place that has it.