The widely held belief that small business is the backbone of any productive economy rings true just as loudly in the remote Nunavut community of Rankin Inlet (population 2,358 in the 2006 census) as it does in the bustling metropolitan cores of Toronto or Vancouver.

Despite the challenges of geography, small businesses have been able to thrive in Canada's northernmost territory. Darrin Nichol, president of the Nunavut Development Corporation, headquartered in Rankin Inlet, says the success of small local enterprises may surprise other Canadians.

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"Small business is critically important to the Nunavut economy and it is the least-known economic good news story in this country," he said.

Established with the creation of the territory in 1999, the NDC helps to foster employment opportunities in Nunavut and stimulate growth for local businesses, which have been able to overcome such problems as high overhead and transportation costs.

"Certainly, excessive overhead costs relating to utilities and fuel far outstrip any sort of challenges a business in Ontario would have to come up against," Nichol said. "But I think the Nunavut economy is healthy, despite these challenges."

Kyra Fisher, general manager of Uqqurmiut Arts and Crafts in the coastal town of Pangnirtung, says she has to import nearly all of the materials her artists require for their work.

"For our business, the only things available locally are stone and antler, so all other materials have to be brought in," she said. "Very often, they're flown in and those costs are high for a small business.

"You also have to make sure your supply doesn’t deplete because sometimes it can affect your shipping plans."

Fisher says the market for her products is predominantly outside of Nunavut. But the high cost of shipping arts and crafts to customers or galleries has not destroyed her bottom line.

"[These costs] can affect our competitiveness but on the other hand we’re the only business of this kind in Nunavut, whereby we’ve been making tapestries for over 40 years," she said."We also have a special product, the Pang hat —people are quite willing to pay our prices because our products are unique."

Unique challenges

Nichol says the successful expansion of Nunavut’s mining sector has had a trickle down effect. "The opportunities for Nunavut-based businesses to provide supplies to the operations involved in the advancement of Nunavut's mining sector have been very impressive."

Brian Schindel, general manager of Kivalliq Arctic Foods in Rankin Inlet, says his company has been able to succeed in recent years by focusing nearly all of its efforts on the growing demands for fish products within Nunavut.

"Between 1999 and 2008, we were exporting a great deal of caribou meat into Canada, the U.S. and Europe," he said, pointing out that biologists had been encouraging a cull of caribou on Southampton Island because of rising populations.

"But that herd controlled itself and the hunting was not necessary so we needed to put the focus on Arctic char."

Schindel says the switch from a lucrative product like caribou meat was difficult but the company had little choice in the matter.

"It was a bit of a challenge because we built the market and then the product was not there," he said. "But that's part of doing business here — wanting to be good caretakers of the land. One has to be cautious in not overtaking your resources."

He says the local demand for Arctic char has grown in the past year or so and Kivalliq has been able to recoup some of its losses from the restructuring.

"The product that we're processing now is predominantly sold in Nunavut because the territory is able satisfy all the product we have for sale."

If Schindel does eventually choose to export more Arctic char, the market in the United States is hungry for the fish. Kitikmeot Foods, based in Cambridge Bay, saw its sales jump by about $150,000 in 2009 following a spike in interest from U.S. restaurants.

Communities evolve and progress

Nichol says the NDC works with companies like Kivalliq and Uqqurmiut in order to alleviate some of the high costs associated with those sectors, like shipping or power generation.


A tapestry woven at Uqqurmiut Arts and Crafts in Pangnirtung. (Nunavut Development Corporation)

"Our arts initiatives, for instance, wouldn't exist without the support of the corporation."

Still, Fisher sometimes finds it difficult to sustain her workforce, partially because the territorial government has been creating so many jobs in recent years.

"People aren’t as dependent anymore on earning money through arts," she said. "In certain ways, our labour force has been eroded, partially through attrition, but a lot of printmakers and weavers have gone to work for the government for better paying jobs."

However, she says the cultural industry in Nunavut remains integral to the territory's economic growth, as evidenced by the Nunavut government's arts and crafts initiative announced in 2007.

"The definition of cultural industry in Nunavut is much broader than it ever was," she said. "For people who don’t have as much education, arts and crafts are still very significant ways of earning a living.

"Also, the cultural industry is what brings tourists to a community – they certainly don't go to see construction or mining work."

Nichol says Fisher and Schindel's experiences show that small businesses in Nunavut have significant potential to contribute to the Canadian economy.

"People don't know a whole lot about the exciting things that are going on in this territory at an economic level and they should," he said. "Despite the challenges, the territory’s small business sector has proven to be extremely resilient and adaptive to challenges and changes – it's an exciting time."