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Arctic Closet.
Arctic Closet.

Arctic angst: Meet five small businesses striving for success in the Far North Add to ...

Logistics are cumbersome, energy costs are sky high, and rents often exceed those in the biggest cities of southern Canada.

At the same time, the local market is small because of the sparse population, and any attempts to sell goods and services to customers in southern Canada can mean onerous shipping costs.

But that hasn’t stopped the entrepreneurs in northern Canada from forging ahead, from the urban environments of Whitehorse and Yellowknife to the tiniest hamlets in the farthest reaches of Nunavut. One thing they share is determination, and a flexibility to try new things and add new ventures to keep the cash flowing.

Various entrepreneurs from southern Canada have relocated and started ventures in the North. And many Inuit – with their long history of self-sufficiency from living off the land – have now jumped into the business scene.

Independent companies are crucial to the North’s economy. While almost 3,300 small businesses are active across the three territories, Statistics Canada says, there are only about 60 medium-sized and large ones.

But financing can be a stumbling block for small startups. “Conventional sources of risk capital – such as venture capital, angel investors and institutional investors – are non-existent,” said Ken Toner, chief executive officer of Atuqtuarvik Corp., an investment firm that supports ventures in Nunavut. Atuqtuarvik was seeded with land claim funds in 2000, and now lends money and takes equity stakes in Inuit-owned companies in the territory.

Atuqtuarvik ensures that Inuit entrepreneurs are able to get involved in the development of the mineral industry, fisheries and real estate, as well as other small-business ventures – while ensuring that the profits stay in the territory, Mr. Toner said.

Other business development organizations in Nunavut, the Yukon and Northwest Territories provide grants, loans and startup capital to small and mid-sized firms.

By supporting northern ventures, these agencies ensure that people in the region can participate in the economic development of the North, while respecting the environment and the traditional lifestyles in the region.

At the same time, new technologies, from PayPal to Twitter, have helped northern entrepreneurs overcome the vast distances and even sell their goods far beyond the local market.

Here are some of their stories:

 

Jared Monkman for The Globe and Mail

Jackie Milne, Hay River, Northwest Territories:

Jackie Milne, owner of Indian Summers Market Garden and Greenhouse, insists the opportunities for entrepreneurs in the North outweigh the disadvantages – even for a farmer.

“You have to be creative and use your imagination,” she said. “You need to have the courage to try.”

Ms. Milne, 47, has a three-acre market farm on the outskirts of Hay River, a town of almost 4,000 people on the south side of Great Slave Lake. Local residents are very keen for fresh food, she has found.

Indeed, there is very little local competition. “Practically 100 per cent of [Hay River’s] food is imported,” she said, and the cost is very high. “I can sell natural, organic, chemical-free produce for the same price as the regular generic stuff. I am getting a really good price, but the public is getting a superior product.”

She was born in Hay River, but left at age 19 and moved to Vancouver Island, where she started farming. When she and her husband – a heavy equipment mechanic – moved back north 17 years later, she began a garden, saw how well it prospered, and decided to get back into farming.

Food can grow well in parts of the North. Once insulating peat moss is removed, the permafrost melts and, after a couple of years of warming, the soil is very productive in the long days of summer, Ms. Milne said.

She focuses on crops that do well in cool weather, and eschews heat-loving ones such as tomatoes and cucumbers. Vegetables such as cabbage, broccoli and cauliflower can thrive in cooler weather, as do potatoes, carrots, spinach, lettuce and kale. In the summer, plants grow significantly faster than in southern Canada, and without heat stress. Another advantage: The number of pests is far lower in the North. “I have the most pristine organic carrots, because we don’t have the carrot rust fly,” she said.

Ms. Milne has built a super-insulated solar green house to grow crops in winter, heating it with a high-tech “gasification” burner that consumes wood extremely efficiently.

Janice Chapman

Tia and Leslie Nukiwuak, Qikiqtarjuaq, Nunavut:

Tia and Leslie Nukiwuak have their eye on expansion, despite the fact that their business is based in a tiny settlement of about 500 people on the north coast of Baffin Island.

Their company, Leelie Enterprises, owns a retail store in town, handles fuel delivery, and provides guiding and outfitting services. It also owns a bed and breakfast in Iqaluit, more than 500 kilometres away.

“The key to our success is diversity,” Ms. Nukiwuak said. “We keep our eyes and ears open for opportunities, and if there are no opportunities, we make our own.”

Tia, 46, is originally from Southern Ontario, and she met her husband Leslie, 66, when she moved to Qikiqtarjuaq to teach. She wanted to get out of teaching, and Leslie, an Inuit who grew up on the land, recognized that there were business opportunities in outfitting hunting and fishing expeditions. “Leslie’s vision was to keep both of us locally employed and hire as many other local residents as possible to offer employment opportunities amongst his people,” Tia said.

The company has managed to extend the tourism season beyond the short summer window by helping entice clients to come north in September and October. It may be colder then, but that’s the time when wildlife is on the move, and it is much more likely to catch a glimpse of a bear or other animals.

The couple constantly reinvest in the business. At the moment, they are looking at buying a small plane to allow them to travel between communities and bring in clients as well as supplies.

The company has eight full-time employees at the moment, but high staff turnover is one of the biggest challenges. The best way to keep people, Ms. Nukiwuak said, is to be as flexible as possible. Inuit employees want to go hunting on the land on occasion, so it is important to give them time off and make contingency plans, she said.

Bob Baxter, Whitehorse, Yukon

In the mid-1990s, Bob Baxter and his friend Alan Hansen were sitting around the campfire on a canoe trip on the Jennings River in the Yukon when they came up with the idea of starting a brewery in the North. The two engineers, who both originally hail from Southern Ontario, finally brought their dream to fruition in 1997. Today, their Yukon Brewing Co. makes the most popular draft beer in the territory, but sells 35 per cent of its brew in British Columbia, Alberta and even some international markets.

The biggest challenge is the small size of the local market, Mr. Baxter said. “The entire Yukon has 35,000 people in it. We knew off the bat that the only way we would ever survive is to rely on exports out of the Yukon.”

But selling to those unfamiliar with an obscure brand was tough initially, he says. “We learned pretty quickly that you are only the home team at home. When you go somewhere else, it is hard to get noticed.” Still, the brewery has taken advantage of the sheer “exoticness” of its locale as a key marketing strategy, Mr. Baxter said.

Financing was tough at the start, although government loans helped get the business launched, Mr. Baxter said. Most banks were reluctant to lend, but more than two dozen local residents put up cash to buy shares.

Logistics can be tough for a company making a commodity such as beer in an out-of-the-way location such as Whitehorse, but the brewery has overcome those challenges. Mr. Baxter said. Water comes from local sources, hops are fairly easy to ship in, and grain comes up the highway via truck at a reasonable cost. The company also invested in a special washer, so it can recycle bottles locally.

Now, Yukon Brewing is getting ready to tap into a new market. The company bought a still in 2009 and has starting making whisky. After a few more years of barrel aging, it will be ready to sell. “I have no idea how the whisky market works,” Mr. Baxter, 57, admits, but he’s going to give it a try.

His advice to other northern entrepreneurs? “Be stubborn. Refuse to fail.”

Dave Brosha for The Globe and Mail

Fadil Memedi, Yellowknife, Northwest Territories:

For Fadil Memedi, co-owner of the Javaroma coffee shop in Yellowknife, the biggest challenge in owning a small business in the North is finding and keeping employees.

“In the North, recruiting is a challenge,” says Mr. Memedi, 55, who owns the shop with partner Rami Kassem, 34. The main problem is that in a town where many resource industry jobs pay very well, it is hard to hang on to staff in service industries. “We can’t really compete with the wages of a diamond mine or gold field or anything like that,” he said.

Still, Mr. Memedi has been fortunate to attract people who heard about Javaroma from others who worked there in the past, and liked the atmosphere. Those word-of-mouth referrals have gleaned him several employees over the years. His current workers include locals as well as people originally from the Philippines, Japan and Ethiopia.

There are many other challenges. Shipping costs are a big expense, since Javaroma gets most of its supplies from Montreal, and it’s costly to transport them all that way. Rent is also substantially higher in the North than in equivalent locations in southern Canada.

With financing tough to get in the food business, Mr. Mamedi tapped the nest egg he built up when he ran a taxi business in Yellowknife before buying Javaroma four years ago. “I managed to put a little bit away and I’ve got a partner who did the same thing.”

Mr. Memedi was born in Macedonia, lived in New York for a time, then ran an Italian restaurant in Pickering, Ont., before a couple of friends in Yellowknife suggested he try moving there, partly because he liked outdoor activities. He moved in the mid-1990s and has been there ever since.

There are advantages of operating in a small northern city, Mr. Memedi says. Yellowknife’s isolation makes it feel almost like a village, so after a while “you do know just about everybody,” he said. If a business creates a good impression, word travels fast.

And despite the remote location, a trendy coffee shop can bring in celebrities. Duchess of York Sarah Ferguson dropped by Javaroma a few years ago while filming a reality television series in the North, and the stars of the TV series Ice Road Truckers have come by on occasion, Mr. Memedi said.

Vicki Aitaok, Cambridge Bay, Nunavut:

In Cambridge Bay, a hamlet of about 1,500 people on the southeast coast of Victoria Island, Vicki Aitaok, 50, and her husband Jorgan, 46, run Arctic Closet, a gift, clothing and craft shop.

It is tough to make a living as an entrepreneur in a small isolated community, Ms. Aitaok acknowledges, given the tiny market and high expenses. “There is only so much money to go around” in a town of this size, she said. “That is just the reality.”

While there is government financing available for Inuit-owned firms, Ms. Aitaok and her husband have tried to make the company viable without that help. “We want it to be self-sustaining,” she said.

The Arctic Closet store is breaking even, but not generating much of a profit, so the couple have tried to diversify into other areas. They recently opened a second branch at the town’s airport terminal, and added coffee and food service at that location.

“The only way we have been able to manage is to diversify and broaden into other areas,” she said. The new airport location, for instance, gives the business exposure to a different clientele, including people who are changing planes but not staying in the community.

The couple have also started up an eco-tours business, and Ms. Aitaok does some part-time contract teaching to help make ends meet. She first went north in her 20s as a teacher – she was born in Saskatchewan – and met her husband, who is Inuit, in Cambridge Bay.

She also organizes the town’s efforts when Arctic cruise ships come to town each year and passengers get off to look around. Ms. Aitaok co-ordinates activities at Cambridge Bay’s cultural centre – along with local artisans and elders, taxi companies and retailers – so the visitors get a more coherent experience. The town, of course, benefits from everything the visitors spend, and it helps buoy all the small businesses involved.

The combination of the natural entrepreneurial tendencies of the Inuit, with the backing from new institutions that provide financial support, bodes well for small business in the North, she said.

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