Skip to main content

The Globe and Mail

Despite oil's collapse, First Nations businesses thrive

Good Fish Lakes CEO Sandy Sanderson runs a dry-cleaning and industrial-garment manufacturing business that employs 150 people in the province.

Amber Bracken/The Globe and Mail

The collapse of capital spending in Alberta's oil sands has hit the region's service and supply providers hard over the past three years, but many aboriginal-owned businesses have fared better than their non-aboriginal competition as oil sands operators prioritize working with Indigenous companies.

"We're not making anything close to the margins that we used to, but, in terms of the number of employees, we're at the height of our operations," says Nicole Bourque-Bouchier, chief executive officer and co-owner of Bouchier Group.

Ms. Bourque-Bouchier, a Mikisew Cree First Nation member, co-founded the road-maintenance company with her husband, David, in 2004. Diversification into facilities maintenance and, most recently, an engineering procurement and construction (EPC) division, has fuelled the company's expansion since oil prices collapsed in 2014 to just under 1,000 employees and contractors.

Story continues below advertisement

"On the EPC side, we're currently doing a research project for Syncrude [Canada Ltd.]. We have engineers, surveyors and the capability to go from the design stage right through to the construction stage, which is really groundbreaking for a local aboriginal company," says Ms. Bourque-Bouchier, who is also president of the Northeast Alberta Aboriginal Business Association.

The Bouchier Group's growth runs against the current of shuttered office space and workers leaving the once bustling oil sands hub of Fort McMurray. With no new greenfield projects and only limited brownfield expansions on the horizon, total capital spending by oil sands operators in 2017 is less than half of what it was in the heady days of 2014, when industry invested $34-billion into bitumen production.

Although operators are spending less, Indigenous businesses are winning a bigger portion of the pie. Cenovus Energy Inc. is among the oil sands companies that are increasing spending with aboriginal companies as a percentage of their overall capital spending. Cenovus spent 19 per cent of its capital budget with Indigenous partners, up from 9.7 per cent in 2012. Suncor Energy Inc., the largest oil sands operator, spent $445-million with aboriginal companies in 2016, pushing its total Indigenous partnership to a remarkable $3.9-billion since 1999.

Certified at a gold level in the Progressive Aboriginal Relations program under the Canadian Council for Aboriginal Business (CCAB), Suncor continues to expand its involvement with First Nations. Suncor's recent $500-million oil sands storage-terminal deal with the Mikisew Cree and Fort McKay First Nations is part of the evolution.

As aboriginal companies build capacity and experience, oil sands operators are recognizing local businesses often make the best partners. Aboriginal companies are rooted in the region and there are a lot of them. Some 130 Aboriginal businesses are members in the Northeastern Alberta Aboriginal Business Association.

"What's really interesting is that now we're seeing many more Indigenous businesses competing against Indigenous businesses," CCAB's CEO JP Gladu says. "That's where we need to be. You've got to have a sharp pencil. You've got to have the experience and that's how you're going to win more contracts."

Being an aboriginal-owned business may win extra points in a bid competition, but "we never hang our hat on that," says Sandy Sanderson, CEO of Good Fish Lake Business Corp.

Story continues below advertisement

The First Nation-owned company in Lac La Biche, Alta., employs 150 people in its dry-cleaning and industrial-garment manufacturing businesses – Good Fish Lake cleans 15,000 coveralls a week. Through the downturn, management focused on improving operational efficiencies and building capacity.

Instead of outsourcing basic machine repairs, Good Fish Lake trained their own workers to do it. The company buckled down on customer service. Most recently, the company completed a research project in conjunction with the University of Alberta and the Alberta Research Council to determine the best dry-cleaning technology for oil-stained garments. That study also positions Good Fish Lake as an authority in industrial-garment cleaning.

"Our customer satisfaction scorecards have gone as high as 97 per cent recently and that's led to opportunities to do more work with our customers," Mr. Sanderson said. "The last two years have been the most profitable for the company in the last 40 years."

Fort McMurray's Tuccaro Group is one of Canada's largest private aboriginal companies. For Dave Tuccaro, the group's president, the past three years have been an exercise in cost cutting and fiscal discipline.

"In a slowdown like this, you look at every line item and cut a little bit from each one," he said.

Having transitioned from crane operator to heavy-equipment business owner in 1990, Tuccaro diversified with the industry's expansion. He added a fuel business, potable water and waste-water removal, geoscience and environmental services, break-time services and consumables restocking. The common thread through these ventures is their support of continuing oil sands operations.

Story continues below advertisement

"It's true that there's no greenfield oil sands development now, but there aren't that many [aboriginal companies] actually involved in the building of the new greenfield megaprojects. The majority of native businesses have always been on the maintenance side of the oil sands industry," Mr. Tuccaro said.

So, despite the new economic reality in the oil sands, aboriginal companies are well-positioned for the future, said Mr. Gladu of the CCAB.

"When you think about it, Canadian businesses have had 150-plus years to develop their business acumen … we've only really seen significant success in the last 10 to 15 years. That's not actually a lot of time to hone your business skills … but our business leaders are putting in the time and becoming that much more competitive."

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments are closed

We have closed comments on this story for legal reasons or for abuse. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.