Nunasi Corp. sells its half of Norterra to the Inuvialuit
Nunasi chair says sale will help Nunasi focus on restructuring and “accountability” to Nunavut beneficiaries,
As part of a continuing restructuring effort, Inuit-owned Nunasi Corp. is selling its 50 per cent stake in Norterra Inc. to the Inuvialuit Development Corp., the company that already holds the other 50 per cent.
Nunasi and the IDC announced April 1 that they’ve struck a deal for the IDC to purchase Nunasi’s half of Norterra, giving the Inuit of the Inuvialuit settlement region full ownership of the company.
Norterra was created in the mid-1980s, when Nunasi and the Inuvialuit teamed up to buy the Northern Transportation Co. Ltd., which until then had operated since the 1940s as a federal Crown corporation.
NTCL’s primary business is to resupply communities in Mackenzie Valley by barge, through a transportation network that includes the western Kitikmeot.
In the late 1990s, Norterra began operating the Canadian North airline after Canadian Airlines International Ltd., the short-lived national carrier, became insolvent and ended up being swallowed up by Air Canada.
Canadian North inherited Canadian Airlines’ northern assets, many of which had been previously operated by Nordair in the 1970s and 1980s.
Besides Canadian North and NTCL, Norterra also owns Braden-Burry Expediting and some other companies.
In an April 1 release, Nunasi said the purchase is “in the best interest of both parties,” allowing Nunasi to focus on restructuring “to be more accountable to Nunavut beneficiaries.”
“We are pleased to have completed a win-win business transaction with our colleagues at IDC,” said Nunasi Corp. chair Okalik Eegeesiak in the release. “With the sale of the NorTerra Inc. shares, the Nunasi board of directors has positioned Nunasi to grow our businesses and align our business interests with the three regional development corporations for the betterment of Nunavummiut.”
In recent years, Nunasi had been financially weakened by losses suffered by the Norterra group of companies, one of its most important subsidiaries.
The corporation announced in November 2012 that it would undergo a makeover of its organization, with the goal to restore Nunasi to profitability and “ensure Inuit benefit from the economic boom Nunavut will see in the coming years.”
Nunasi started to shed assets in 2013 when it sold its subsidiary Secure Check, to Scarlet Security Services, which specializes in safety, security and screening support for remote mining, ice roads, pipeline and oil and gas projects.
But in recent years, Canadian North and its rival, First Air, have not done well financially and each airline is believed to have posted losses.
That’s partly due to the effect of the Nutrition North Canada program, which drove down freight rates paid to each airline by major retailers like North West Co and Arctic Co-ops Ltd. Under the NNC, the airlines must now compete with each other on price to win freight contracts from the retailers.
In 2012, First Air’s owner, Makivik Corp., held talks with Norterra aimed at a possible sale of the airline.
But in October of 2012, Makivik decided not to sell First Air to Norterra and continued to develop its Sakku First and Qikiqtani First joint ventures in Nunavut.
First Air’s partnerships with Nunasi sibling firms like the Sakku Corp. and the Qikiqtaaluk Corp. created an awkward situation — Nunasi’s asset, Canadian North, ended up competing against the interests of companies that are supposed to be partners of Nunasi, the regional Inuit birthright corporations.
Following its latest deal, Nunasi says it will continue to work with the IDC to promote business growth in the Arctic.
IDC and Nunasi are shareholders of two other companies; National Aboriginal Services Company (NASCO) and Pan Arctic Inuit Logistics (PAIL.)
“Under IDC’s ownership, Norterra and its subsidiaries will continue to operate as usual, and customers can be assured that there will be no change in the level of service provided by the companies, including Canadian North’s operations in Nunavut and NTCL’s operations in the Kitikmeot,” IDC chair Wayne Gordon said in the news release
Nunasi Corp., originally called the Inuit Development Corp., was formed in 1976 to participate in business opportunities in what is now Nunavut.