A seat at the economic table: The importance of equity participation for growing northern Indigenous communities

The ownership structure of a company is an often-undervalued aspect of a business that has a significant impact, not only on the business but also on the community the business operates in.

Locally owned enterprises add jobs and tax revenue, but also retain wealth within the community, improving a community’s confidence in itself, creating opportunities for new business and attracting new investment and residents.

Businesses majority owned by First Nations operating in northern Indigenous communities bring similar value to their home communities. That’s why having ownership stakes in businesses is vital for many northern communities. Besides jobs and revenue, equity and ownership offer a seat at the economic and decision-making table.

Birch Narrows Dene Nation’s (BNDN) economic development corporation recently partnered with Impact Energy Services, an electrical and instrumentation services contractor in the resource sector, to form Impact Energy Industrial. The First Nation has a 51 per cent ownership stake in the new venture, making it a majority Indigenous-owned enterprise.

A little over a year before the partnership formed in September of 2022, BNDN signed a mutual benefits agreement (MBA) with NexGen Energy Ltd. (NexGen), a uranium exploration company developing a project in the southwestern Athabasca Basin area where the First Nation is located.

Boyd Kampen, co-founder and president of Impact Energy Services says partnering with BNDN made sense because of the MBA with NexGen, but that offering ownership fit with their company philosophy of growing the company through local ownership in resource-based communities.

Rather than form a joint venture, which is a quick and dirty way to take advantage of a partnership opportunity, Kampen says they chose to start a new company and take a longer view of the partnership.

“Knowing that there’s a future opportunity there to have long term growth and being able to provide opportunity to new team members, and with having that line of sight of okay, this business is going from where we started out in the original year, it’s going to be 20 to 25 times over the next seven years.”

The company’s main point of contact is Birch Narrows Dene Development Inc., the First Nation’s economic development corporation, and is arms-length from the First Nation’s elected officials. But Kampen says they recognize the importance of the business for the community.

“We work independently of chief and council for the most part,” says Kampen. “But they are definitely our shareholders, and we recognize that any actions that we take have to be good for the community, as well for the long-term business viability.”

Kampen says they have hiring goals of not only bringing on Indigenous labourers but of BNDN community members achieving journeyman status and management roles. He hopes that eventually, this effort will also spin off a new business or two within the community.

“The opportunity at the end of the day would be to work inside communities, find some great community team members that want to take it a step further and potentially start a business right in the community … that can be left in the community that we can help foster and grow. That’s the type of thing that we’re looking for,” says Kampen.

Polar Oils is also partly owned by Birch Narrows Dene Nation along with other First Nations in the Meadow Lake Tribal Council, and the company has worked hard to iron out a lot of the business practices to “make this an unbiased model,” says Dylan Gould, general manager of Polar Oils.

The governance structure of Polar Oils offers each owner a vote on major decisions, and, in the spirit of co-operation and fairness, the business pays dividends based on patronage or how much a shareholder uses the business. The structure positions the company with an opportunity to scale and offer equity participation–something their competitors don’t or can’t offer.

Little Pine First Nation (LPFN) is the most recent First Nation to join the partnership, but owning a part of a petroleum wholesaler is not where the conversation started.

“When we first started discussions with LPFN, they were simply seeking an upstream vendor to supply their newly proposed Lloydminster gas bar, and everyone was at the table, all the major corporate suppliers,” says Gould.

LPFN’s new urban station is directly adjacent to Gold Horse Casino in Lloydminster. So, it’s a high-traffic area with what Gould calls “a bit of a vacuum” as the closest First Nation owned gas station is in North Battleford. So, the fundamentals of a strong business were there and that was attractive to major players.

“We were able to offer more than just a transactional relationship,” says Gould. “We provided a model of co-ownership through the equity participation in our business. So by choosing to buy Polar and be serviced by Polar, not only was Little Pine assured that they have optimal level of supplier support, but they would also become a beneficiary of our overall business growth.”

Being able to take an equity stake is a convincing differentiating factor for Polar Oils, and it’s not something they offer everyone, says Gould.

“It’s not something we would offer to every First Nation,” says Gould. “Primarily what we seek is First Nation communities that share our close cultural alignment with our leadership’s values–values rooted in a pro-development, self-determination, and joint participation philosophy.”

Having equity stakes also offers a “seat at the table” to some Polar Oils’ major corporate customers if they have another business venture to pitch these larger players.

“[LPFN] went from an ec dev agency, which essentially had no business activity to now having a retail station [and] owning the wholesaler,” says Gould. “Now they can go to Polar Oils’ existing customers, such as Nutrien, Orano, CB, and say, ‘Look, we already have a business venture, we’re already supplying you through our partner business.’ [It] gives them a seat at the table.”