Global investments put Arctic corporation in the black

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Times are tough in the Arctic. The military bugged out, the oil and gas business dried up, so the Inuvialuit Development Corporation came to realize the only way to survive was to dramatically change the way it did business.

The year 1993 was a good one for the corporation, the Inuvialuit management company which attempts to fulfil the business goals set out in the Inuvialuit final land claim agreement.

IDC returned to profitability for the first time since 1986 and handed over $2 million in profit to its sole shareholder, the Inuvialuit Regional Corporation.

But success had its costs. Lost jobs, pay cuts, and 18 months of restructuring was a difficult path to take in refocusing on the economy that exists today.

Northern communities would be happy if somebody just took some notice, said Dennie Lennie, chairman of the IDC. But the reality for the company was to rely less on the economy on its door step and reach out to the global community for economic opportunities.

"There were times when Inuvik was almost twice the size. That's when the oil business was booming. There would be huge populations in the summer times and during the drilling and off-shore activity. That's all gone now," said IDC president David Connelly.

In response, IDC formed alliances in Port Moody and Nanaimo , B.C. in real estate and property management. SRI, a subsidiary which manufactures mobile homes, opened a new plant in Winfield, B.C. In addition to its two existing plants in Estevan, Sask., and Lethbridge, Alta. Edmonton-based IDC subsidiary Valgro Ltd. launched a new product line. Northern Transportation of Hay River, jointly owned with Nunasi Corporation, a development arm of the Inuit of Nunavut, won a contract to supply fuel to the North Slope of Alaska.

The strategy was to diversify. To invest in the places that would make money for the 5,000 beneficiaries of the final land claim agreement. What resulted was a $2.5 million profit on $79 million in revenues on an asset base of $74 million.

This year marks the 10th anniversary of the signing of the final agreement, which was the first comprehensive land claim settlement negotiated on Crown lands. IRCV is the holder of the land claim and responsible to the Inuvialuit people.

IDC, the business arm of IRC, operates through 20 subsidiary enterprises which break down into six business sectors of project management and environmental services, manufacturing, real estate development, transportation, property management and northern services.

The corporation was seeded in 1984 with a $10 million dollar economic enhancement fund and provides dollars to the IRC which distributes the wealth among a number of social and community programs.

But land claim money is a diminishing resource, said Connelly. If there is something IDC can offer other communities in negotiations on claims, it is 10 years of experience in managing land claim monies, he said. Others, he hopes, can learn from the corporation's mistakes, and this year's success.

"There is a heavy bias towards doing things in a bureaucratic, government, social point of view and there hasn't been a whole lot of experience in term of the commercial model and corporate, profit-motivated model," said Connelly.

The Inuvialuit Final Agreement separates the politics from the business, and further separates the land, hunting, trapping and harvesting from the main political body, he said.

"One of the ways IDC's been economically successful is that it stays out of the political issues," Connelly insisted.