Small Businesses in the North
Arctic Adventures in Business Law – Challenge and Potential of Operating a Small or Family Business in Canada’s North
Written by Rebecca Jaremko Bromwich
As those of us working in the north learn quickly, everything happens differently north of 60. Whether we learn that in the thick of our first five-day blizzard, or the first time we see the Northen Lights, we learn it quickly. Operating a small or family business in Canada’s northern regions, such as Northern Manitoba or the territories, presents unique challenges and opportunities. While vast and picturesque arctic landscapes offer untold riches in the form of natural resources for mining, and the cultural richness of the north’s Inuit and other Indigenous populations is compelling, offering future growth and prosperity, the harsh environmental conditions, sparse population, and limited infrastructure pose significant hurdles for entrepreneurs. In this discussion, we will delve into the multifaceted challenges faced by small or family businesses in these remote areas and explore potential strategies for overcoming them.
Geographical Isolation and Limited Infrastructure
One of the most prominent challenges of operating a business in Northern Manitoba or the territories is the geographical isolation and the associated lack of infrastructure. Canada’s north has the most geographically dispersed, and least dense, population in the world. The vast distances between communities, coupled with rugged terrains and harsh weather conditions, make transportation difficult and costly. This isolation extends to the limited availability of essential services such as healthcare, education, and telecommunications, further complicating business operations.
For small or family businesses, the lack of infrastructure translates into higher operational costs and logistical complexities. Transportation expenses, for instance, can eat into profit margins, making it challenging to compete with businesses in more accessible regions. Additionally, limited access to reliable internet and telecommunications services hinders communication and connectivity, impeding businesses’ ability to reach customers and engage in e-commerce effectively.
Seasonal Variability and Climate Extremes
Northern regions are characterized by extreme climate conditions, with long, harsh winters and short, intense – and magnificently beautiful – summers. These seasonal variations present significant challenges for small or family businesses, particularly those reliant on outdoor activities or seasonal tourism. For example, businesses operating in sectors such as agriculture, construction, or tourism may experience disruptions and revenue fluctuations due to weather-related factors such as snowstorms, flooding, or wildfires.
Moreover, the short growing season limits agricultural productivity, making it difficult for farmers and producers to sustainably cultivate crops or rear livestock. Similarly, tourism operators may struggle to attract visitors during the colder months, leading to reduced revenues and financial instability. Adapting to these seasonal variations requires careful planning, diversification of revenue streams, and investment in resilient infrastructure and equipment capable of withstanding extreme weather conditions.
Workforce Recruitment and Retention
Recruiting and retaining a skilled workforce poses another significant challenge for small or family businesses in Northern Manitoba or the territories. The region’s sparse population, coupled with outmigration to urban centers, exacerbates labour shortages and limits the pool of available talent. A shortage of available housing in territories such as Nunavut, compounds this issue. In many communities, it is impossible to simply arrive and look for work. Housing must be secured first. Further, the remote location and harsh living conditions may deter individuals from relocating to these areas or staying long-term, especially if job opportunities are limited.
As a result, small businesses often struggle to find qualified employees, particularly those with specialized skills or expertise. Moreover, the high cost of living in remote communities, coupled with limited amenities and recreational opportunities, may further deter potential employees from considering employment opportunities in the region. To address these challenges, businesses may need to offer incentives, and especially competitive wages and benefits, invest in employee training and development, and explore innovative recruitment strategies such as remote work arrangements or partnerships with educational institutions.
An example of a partnership between a community, educational institution, and business is the ,Redfish Arts Studio of Cambridge Bay, in Western Nunavut, where the local mine and the Federal government jointly support a welding apprenticeship through which at-risk Indigenous youth are taught a trade and prepared for employability in industry, which will afford them wages and a lifestyle that will support their families and communities. I’m very proud to serve on their Board.
Legal, Regulatory, and Administrative Barriers
Navigating regulatory and administrative requirements can be particularly challenging for small or family businesses operating in Northern Manitoba or the territories. While regulations are intended to ensure safety, environmental protection, and compliance with legal standards, they can also create barriers to entry and impose additional costs on businesses, especially those with limited resources and expertise.
For further instance, obtaining permits and licenses for various business activities may be time-consuming and costly, particularly in sectors such as natural resource extraction or land development. Moreover, regulatory compliance requirements may vary between jurisdictions, complicating business operations and increasing administrative burdens. Small businesses may struggle to keep pace with regulatory changes and updates, leading to compliance issues and potential legal liabilities.
It is important that businesses in the north work with lawyers specifically experienced with working in their region, even where they do business with southern clients and trading partners.
Conclusion
Operating a small or family business in Canada’s northern regions presents a myriad of challenges, ranging from geographical isolation and limited infrastructure to seasonal variability and workforce recruitment difficulties. While these challenges may seem daunting, they also offer opportunities for innovation, resilience, and community collaboration.
By leveraging local resources, investing in infrastructure and technology, and fostering partnerships with government agencies, indigenous communities, and other stakeholders, small businesses can overcome many of the obstacles associated with operating in Northern Manitoba or Canada’s territories. With determination, creativity, and adaptability, entrepreneurs can thrive in these remote and rugged landscapes, contributing to the economic vitality and sustainability of Canada’s north. With the opening of new deep-sea harbours in communities like Iqaluit (in 2023), the thinning of Arctic ice sheets and the development of northern resources, Canada’s north is certainly a space where businesses have a promising future.
The views and opinions expressed in the blogs and case reporter are the views of their authors, and do not represent the views of the Desautels Centre for Private Enterprise and the Law, the Faculty of Law, or the University of Manitoba. Academic Members of the University of Manitoba are entitled to academic freedom in the context of a respectful working and learning environment.