When the majority of your community members are unemployed, there are significant social and economic challenges, and you simply don’t have enough funding to cover your community’s needs, it is incredibly tempting to tap into any resource you have to help address the challenges.
Like many First Nations communities, our company’s shareholders face these kinds of challenges every day. Which is why their unwavering commitment to their original vision is so remarkable.
And so crucial to Athabasca Basin Development (ABD)’s success.
The seven communities in northern Saskatchewan’s Athabasca region – Fond du Lac, Hatchet Lake, Wollaston Lake, Black Lake, Stony Rapids, Campsell Portage, and Uranium City – are three First Nations and four settlement communities whose leadership shared a common vision when our company was started thirteen years ago. These original values were based on two ideas. First is that together, seven communities were stronger than one. And the second idea was to build wealth for the region by retaining and reinvesting earnings.
Since our company’s inception, our focus has been on long term growth. Our formula is quite simple: we take the majority of the previous year’s earnings and use those to invest so that we create new earnings in other businesses, geographic sectors and industries, and so we can be diversified and expand our investments.
Our leadership has been committed to reinvestment, proven through the decision to not receive a dividend for our first five years. Dividends affect a company’s ability to grow because they limit cash that can be used for reinvestment or to ride out difficult years. This commitment has resulted in the ability of ABD to pay a sustainable, consistent dividend that our communities can depend on even in poor market conditions.
By being consistent and focusing on growing wealth for the future, our company has experienced remarkable success in a relatively short time. Our partner’s capital has grown exponentially, starting at $100 per unit in 2002 and now at a value of over $830,000 per unit. We have grown to include investments in twelve successful companies across multiple industries that employ over 1000 people and do business across Canada. We won a national award from the Prospectors and Developers Association of Canada. We were named 2014 Business of the Year by SaskBusiness magazine. Three of our investments have been listed in the Top 100 Saskatchewan companies.
Ok, that’s great, but so what? some people could argue. How does a company’s success help the people in the communities who are dealing with so many difficult challenges?
“Building a Future Through Investment” is accomplished through the pillars of building wealth for the communities, donations, community distributions, building a reputation, and building capacity. Some of these are financial benefits – such as donations, distributions, and building wealth – while others have a more intangible value – such as building a reputation. The key to making all benefits possible is in building wealth for the communities; without this foundation, the other pillars would not be possible.
By continuing to build wealth, we remain in a position to pay reliable dividends that can be leveraged by the Athabasca communities to finance other larger projects. For example, the Fond du Lac community arena was financed by the bank using ABD distributions as income to pay the loan.
By continuing to build wealth, we remain in a position to make donations that benefit the entire Athabasca region. For example, in 2013, we were able to partner with SaskTel and Huaweii Canada to make our largest ever corporate donation of $249,000 for cell towers in the North, and this year, two of the towers became operational. This represents a $5M investment that benefits the entire Athabasca region. This is just one example of many donations our company has made, and most of these have been possible in the last few years – when our company has grown to where we are now able to consider these types of donations.
Part of our company’s mission is to raise awareness of the challenges and potential opportunities in Northern Saskatchewan. By building our company’s profile and reputation through marketing efforts, participation in boards, giving presentations, and business excellence, this helps bring awareness of the region to the province’s business community and to the government.
There is also building capacity. In addition to having ownership in companies that can provide employment opportunities and often work with local subcontractors, there is also the ABD board and staff. The ABD Board of Directors is comprised 100% of representatives from the Athabasca communities. Participation on the ABD Board builds local capacity through experience governing a complex investment company, as well as through board education opportunities provided by ABD. In addition to this, ABD lends its staff’s expertise to the communities through things like participation in local development corporation boards, marketing and administrative assistance.
As much as we have done, there is much, much more to do. We are a young company, and we are just starting to be in a position to be able to make an impact on the challenges the Athabasca communities face. None of this would have been possible if our shareholders had acted differently, and I strongly believe that unity and commitment to reinvesting earnings form our company’s foundation and are the two most important keys to our success. And they will continue to be keys to our success as we move into the next ten years and beyond.
By Geoff Gay, CEO, Athabasca Basin Development