Sean Willy
President & CEO - Des Nedhe Development
Part of the Spotlight on Aboriginal Economic Development

Indigenous Business: Leveraging the natural resource sector for opportunities to diversify

Takeaways

  1. Indigenous participation in public procurement channels is less than 1%.
  2. The private sector, specifically the natural resources sector, contributes more towards indigenous economic development than the public sector, especially when it comes to procurement.
  3. Working with Indigenous businesses presents key advantages: high quality goods and services at competitive prices, opportunities to drive diversity and corporate social responsibility, openings to other markets, and the removal of some regulatory hurdles.

Action

Indigenous businesses should leverage their opportunities and experience in the natural resource sector, to then diversify into more knowledge-based sectors or in renewable energy.


What role do you think Indigenous communities will play in Canada’s future economy?

 
Canada is built on natural resources and large infrastructure projects. Des Nedhe has been working in natural resources for 25 years and many other Indigenous communities want to emulate our model. Indigenous people hold a lot of the lands rich in natural resources and they invest in local procurement channels in order to develop them. So whether it is mining, oil and gas, forestry, food, fishing or Indigenous harvesting, Indigenous communities are grabbing opportunities and growing businesses. When they create that wealth, they are going to try to diversify. Many of our communities in the Northern region want to diversify into sustainable blue-chip businesses in the Southern part of the country. We will ultimately replace the aging baby boomer population. Indigenous wealth creation around natural resources is going to be a source of growth in capital for Canada’s future economy.

“We want to maximize the impact of the natural resources economy, but we as communities want to take that next step [by diversifying our businesses and income].”


How are Canada’s private and public sectors contributing towards Indigenous businesses?

 
It is not the private sector; it is really the natural resource sector. If it were not for the natural resource sector, you would have to ask yourself “Where is Indigenous business in Canada?”
The natural resource sectors in Northern Saskatchewan, Northern Alberta and the Northwest Territories have invested over $10 billion in opportunities for Indigenous businesses during their procurement cycles. These private sector players have realized that Indigenous suppliers offer a value-add. Since Indigenous businesses are better at hiring Indigenous people than non-Indigenous companies, they become reliable regional suppliers. So in the aforementioned regions, Indigenous suppliers have a committed contracted base to their operations. Once companies become familiar with a supplier, they tend to strengthen that partnership through other projects as well.

“The natural resource sectors in Northern Saskatchewan, Northern Alberta and the Northwest Territories have invested over $10 billion in opportunities for Indigenous businesses during their procurement cycles.”

Why then do the provincial and federal governments put mandates and targets that these companies have to hit? For example, Cameco Corporation is the largest publicly traded uranium company and has a target of procuring 35% of its goods and services from Indigenous suppliers. It consistently procures at least 70% of its services from Indigenous providers. However, it is difficult for it to always meet the 35% requirement when the company’s shareholders are also looking for strong return on investment, secure investments and a good quality of procurement. In fact, the federal and provincial governments spend billions of dollars annually on their procurement channels but Indigenous participation in procurement is less than 1%.


What would you put forward as the top three benefits of working with an Aboriginal business, as opposed to a non-Aboriginal business?

 
Firstly, many Indigenous businesses supply high quality goods and services at competitive prices, while also providing businesses with opportunities to drive diversity and corporate social responsibility. Secondly, businesses open up doors to other markets by partnering with Indigenous businesses. For example, Cameco partnered with local communities and businesses in Northern Saskatchewan. It was the largest industrial Indigenous employer in the country for many years and spent a lot of money on the Indigenous supply chain. So when it went to other places to mine uranium, Indigenous people vowed to help it in some of those regions. Thirdly, collaborating with Indigenous businesses removes some regulatory hurdles because Indigenous-inclusive strategies have become a must have in Canada.


What opportunities and challenges will Canada’s transition to renewable energy bring for Indigenous communities?

 
Business and sustainability go hand in hand in Indigenous culture and we just have to be reminded of that fact. It has been taken away from us because of the Indian Act and then because of the onslaught of environmental groups calling us the “stewards of the land.” Instead, we are sustainable harvesters of the land. We did not sit here and do nothing for millennia before the Europeans arrived. We harvested the land but we did it sustainably. Indigenous people are known to be resourceful;from understanding cold weather climates to understanding how to live in a sustainable environment.

“Private [natural resource] sector players have realized that Indigenous suppliers offer a value-add since Indigenous businesses are better at hiring Indigenous people than non-Indigenous companies.”

When it comes to implementing our ideas, it is capital that is missing. So companies like ours want to work with other First Nations to bring them on the economic development path and to create capital so that we can diversify away from natural resources. We want to maximize the impact of the natural resources economy, but we as communities want to take that next step. We chase the jobs at the mining sites because of the lack of investment in education. It is now our opportunity to jump the line and go deep into the technology.


Where do you see the Indigenous and Canadian economy by 2050?

 
By 2050, Indigenous businesses will be highly integrated within the Canadian economy. I hope to see a place where resource development is sustainable and is driven by smart technology with renewable power. The resource development space will be owned by First Nations people not just within local economies, but across the country.

“Full inclusion means that the indigenous workforce will be right at the forefront of natural resource opportunities and reach all the way up to the CEO-level positions.”

Full inclusion means that the Indigenous workforce will be right at the forefront of natural resource opportunities and reach all the way up to the CEO-level positions. We want to diversify into Southern Canada’s value-added sector in the manufacturing components as well.