Saskatchewan’s economy is famous for its ‘three-Fs—food, fertilizer and fuel.’ But there’s a fourth F that could be just as important.
As Saskatoon Regional Economic Development Authority president and CEO Alex Fallon noted recently, First Nations are “possibly the most important economic growth opportunity facing this province.” But many people still think of First Nations businesses as just gas bars and casinos. In fact, KISS frontman Gene Simmons expressed that stereotypical view in a conversation with Robert (Bobby) Daniels, CEO of Misty Ventures, at a Saskatoon restaurant recently.
“(Simmons) said you’re either into gas stations or casinos,’’ Daniels said in a recent interview. “That’s what the (Indigenous) tribes do in the U.S.—gas stations and truckstops, bingo halls and casinos—and they make good money at it.’’
While gas bars and casinos are good businesses (in fact, Misty Ventures owns a gas station), Daniels says First Nations—like Mistawasis Nehiyawak, which owns Misty Ventures—are investing in new types of businesses and using different business models.
“We follow our investment policy and investment strategy to a tee,’’ Daniels says. “And if it doesn’t fit our criteria and our process, then that’s not what we’re interested in.’’
Historically, Mistawasis Nehiyawak band members were keepers of the land, then developed trading relationships with surrounding communities and started new businesses to create jobs and generate revenue for the First Nation, located southwest of Prince Albert.
In 2011, Mistawasis decided to separate its business operations from other band activities and, under the “business-ready’’ bridge program supported by the federal government, formed Misty Ventures Inc. as its economic development agency. In 2013, Misty Ventures was restructured with a board of directors made up of Mistawasis band members, and got its strategic plan, incorporation and financials in order during the next two years. “It was established in 2011, but 2016 is when it really took off,’’ says Daniels, who was hired by Mistawasis in January 2016 as CEO after spending about two years working to get Misty Ventures up and running.
Since then, Misty Ventures has formed seven successful companies, including the gas station/restaurant at Leask; a property management company, which manages buildings and infrastructure assets for the band; a portable storage bin and container company; a concrete, gravel and topsoil company, and a general contractor for heavy industrial, electrical and infrastructure projects.
“One of my first objectives and goals was to create a gas station for the community, which they never had,’’ Daniels says. “By April 2016, the gas station was open. That was our first real business. From there, it just took off.’’
Of course, other First Nations are getting into the gas retailing business, so the “pie is getting smaller and smaller,’’ Daniels says. That’s why Misty Ventures is moving up the food chain and forming limited partnerships. For example, Misty Ventures partnered with Regina-based Clifton Associates to form Misty Clifton Engineering to provide environmental engineering and consulting services. “We want an equity share, a seat on the board and a position at the audit and finance committee to make business decisions,’’ Daniels says.
Another Indigenous economic development agency that likes limited partnerships is FHQ Developments. Formed in 2010 by the File Hills Qu’Appelle Tribal Council—11 First Nations representing 15,000 members in Treaty 4 territory—FHQ Developments’ mandate is to facilitate business and job creation, Indigenous equity ownership and partnership with non-Indigenous businesses.
“We’ve changed our business model over the years,’’ says Thomas Benjoe, president and CEO of FHQ Developments, based in Regina. “We’re focused on developing real companies with our partners. That means changing from joint ventures to limited partnership agreements.’’ Benjoe, who was named president and CEO in 2016, says limited partnerships give the Indigenous partner “more staying power to grow equity, build assets and build capacity for our employees inside of those organizations.’’
“In our experience, joint ventures we had in the past were very transactional in nature. We were always looking for the next big industry project, trying to find partners to bid on projects. If you do win, you get a percentage of the profit or percentage of the contract… But if you didn’t sign any more contracts, everything kind of just goes away.’’ Now FHQ Developments seeks partnerships with local and national companies with strong management teams.
“The (limited partnership) businesses are not just looking for the next big project. The businesses are looking for constant and ongoing contracts and opportunities in the market.’’
“That allows us to have the ability to invest in people and their training and development to ensure that we’re transferring some of that capacity from our non-Indigenous partner into the (limited partnership) entity itself.’’
Two examples of FHQ Developments’ investment strategy are: Great Plains Contracting (51 per cent), a partnership between FHQ and Graham Construction, a Calgary-based construction firm, and Points Athabasca, a Saskatoon-based contractor; and Stone Arrow Consulting (51 per cent), a partnership between FHQ and Stantec Consulting, a major Canadian engineering consulting firm.
“With limited partnerships, we’re playing the long game,’’ Benjoe says. “We won’t see big cash distributions or dividends from the company immediately. You have to reinvest the working capital in the company to continue its growth. So that’s what we’ve chosen to do, reinvest in the business and not take cash out.’’
Limited partnerships can serve other purposes, like separating politics and business, or reducing risk, while maintaining core values. For example, Sturgeon Lake First Nation, near Prince Albert, formed a limited partnership between the band and Sturgeon Lake Development Ltd. in 2009 to remove day-to-day economic development operations from direct band control, while retaining virtually 100 per cent ownership by the band. Last year, Sturgeon Lake Developments signed a limited partnership agreement with Lake Country Co-op to build a gas bar and convenience store in Prince Albert.
Tipi Fuel and Convenience Store officially opened last August, making it the first urban gas bar owned by Sturgeon Lake and the first Western Nations-branded gas bar launched by Saskatoon-based Federated Co-operatives Ltd. “It is important to partner with a like-minded organization,’’ says Sturgeon Lake Chief Ernie Ermine at the official opening. “Although we could open a fuel station on our own, it is smarter to work alongside an organization experienced in the industry that shares similar community values and understands First Nation community beliefs. FCL and Lake Country Co-op have proven they are this partner.’’
April Roberts-Poitras, CEO of Sturgeon Lake Developments, added that the limited partnership helped speed up the process of building, staffing and opening the gas bar/convenience store in less than six months. “If we hadn’t had Lake Country Co-op by our side, I don’t think it could have gone up as fast and I don’t think it would have been as successful,’’ she said.
One of the oldest, largest and most successful Indigenous economic development organizations in the province is operated by the nine First Nations communities that make up Meadow Lake Tribal Council (MLTC). In fact, the 2020-21 fiscal year was the best ever in the 40-year history of MLTC, with nearly $144 million in total revenue.
Al Balisky, president and CEO of MLTC Industrial Investments, which manages four wholly owned companies: NorSask Forest Products, L&M (now NorthWind) Wood Products, MLTC Bioenergy Centre and MLTC Solar Farm said record-high lumber prices resulting from the supply shortages due to the pandemic drove MLTCII’s results in the 2020-21 and 2021-22 fiscal years. Next year, MLTCII’s renewable energy projects, especially the MLTC Bioenergy Centre, are expected to contribute to the bottom line. The $80-million project, which is expected to be in operation in July, will convert waste wood chips from the NorSask mill into 6.6 megawatts of electricity, which will be sold to SaskPower under a 25-year Power Purchase Agreement (PPA). It will also remove more than a million tonnes of carbon emissions from the atmosphere over 25 years.
“It’s a waste stream that wasn’t being utilized. That’s 50 years of just burning (wood waste). Given that it’s 2022, we can do better than that,’’ Balisky says. MLTC Biocentre, which received a $52.5-million contribution from the federal government under its Investing in Canada Infrastructure Program, will also be the first biomass energy project in the province. MLTCII is planning to build the solar power project later this year, with operations set to
begin in 2023. The estimated cost of MLTC Solar Farm, which will produce about 1.6 million kilowatt hours of electricity per year, is about $2 million.
The renewable energy projects are part of MLTCII’s efforts to diversify its revenue base, as well as provide a sustainable and non-GHG-emitting source of revenue. “MLTC is committed to sustainability and operating responsibly by choosing renewable energy,’’ MLTC said in a news release announcing the solar project. “Protecting Mother Earth is our goal!’’
Des Nedhe Group is another Indigenous economic development organization that’s looking for projects that will reduce its carbon footprint and diversify its revenues for its First Nations owners. Established in 1991, Des Nedhe Development Corp. was created to grow sustainable employment and business opportunities for the 1,625 Cree and Dene members of the English River First Nation, located at Patuanak, about 250 km northwest of Meadow Lake.
Des Nedhe Group has a diverse portfolio of investments and businesses, including a welding shop (JNE Welding), a liquor store (The Patch at Grasswood, near Saskatoon) and several companies serving the mining sector (Tron Construction and Mining, Tron Industrial).
“Like other First Nations, we tried to do everything, but over time you find your niche and start to build on your niche and grow,’’ says Sean Willy, CEO of Des Nedhe Group. Most recently, that niche was serving the uranium industry, mainly Cameco Corp., primarily through the Tron group of companies. With Cameco providing up to 95 per cent of Des Nedhe Group’s revenues, the group needed to find another source of revenue when the Saskatoon-based mining company temporarily shut down its main mining and milling facilities in 2020-21.
“At some point, you realize you’re too dependent,’’ Willy says. “Most of your revenues are coming from that one company (Cameco). So like every business, you have to look at your risk and say how do we diversify.’’ So, over the past number of years, Des Nedhe Group has been diversifying into steel fabrication (JNE Welding), cannabis stores (5Buds Cannabis), liquor retailing (The Patch), land development (Grasswood) and professional services/communications (Creative Fire). And, yes, gas stations/convenience stores at Beauval, Patuanak and Grasswood.
But Des Nedhe’s recent foray into the world of nuclear energy has raised some eyebrows. In May 2021, Des Nedhe Group, Kitsaki Management and Athabasca Basin Development signed an agreement to pursue investments in Small Modular Reactors (SMRs) that could lead to the development of four 300-megawatt nuclear reactors generating 1,200 megawatts of electricity in Saskatchewan by the 2040s.
Willy says the three northern First Nations-owned partners have decades of experience working in the uranium industry and wanted to get in on the ground level in the development of nuclear energy in the province. “As three groups that have lived at the front end of the nuclear industry, we just said we want to be early on this,” Willy says. “We think we can add value and we don’t want to be left behind.”
While 20 years is a long lead-time in the world of business and investment, it’s a mere blink of an eye for First Nations people, who have lived here for millennia. “Indigenous thinking is about seven generations ahead,’’ Willy says. “That’s good business as well.’’