The struggle an employee faced when moving from the reserve to purchase a home in the city got Paul Poscente, CEO of Backwoods Energy Services, thinking about the “inherent unfairness … with that systemic gap in the access to capital” that many First Nations people face.
That employee’s experience was the genesis for the Home Ownership for Indigenous Employees that Backwoods Energy Services launched earlier this week.
Backwoods, which is now one of the largest Indigenous-owned businesses in Canada, is a leading service provider for utilities, forestry and oil and gas companies in western Canada. The company has been in operation for more than 30 years. In 2015, the Alexis Sioux Nakota Nation acquired 70 per cent ownership.
The inaugural home ownership program sees Backwoods match Indigenous employees’ RRSP savings to a maximum of $10,000 per employee and offer an additional $2,000 per year of employment to a maximum of $10,000. In total, employees could see $20,000 added to their RRSPs, which can be drawn on and used for a down payment on a home.
Along with the money, the program offers an important educational component as Backwoods has teamed up with First Nations Bank of Canada, Canada Mortgage and Housing Corporation, and Capital Region Housing to provide employees with online training, financial literacy courses, tools and calculators, as well as one-on-one support.
This is the first time a private business has engaged with the CMHC on a housing program for Indigenous employees in Alberta.
“We want to give the maximum chance for each of our employees to succeed so we thought that education portion, that literacy portion was as important as the actual financial support,” said Poscente.
With about 85 per cent of Backwoods Indigenous employees living off-reserve, the program is aimed at purchasing property in Edmonton and Calgary. About 50 per cent of those Indigenous employees are Alexis Nakota Sioux Nation members, while the others are members from other close-by First Nation such as Paul, Alexander and Enoch.
“We stress tested this program against the salaries of our employees. We think about 30 to 45 per cent of our Indigenous employees would qualify,” said Poscente.
It’s important, he adds, that employees not be house poor. In other words, it’s important that they take their lifestyle and priorities into consideration before determining if purchasing a house or condominium is right for them.
Using a mortgage calculator, employees can gauge their qualifying purchase price and work with Backwoods’ financial partners to get prequalified. That purchase price will also include figuring in property tax, regular care and maintenance of a home, and utilities.
“Then you feel good you’re buying a house you can afford, (and) can provide that security and that asset growth we’re hoping the program provides,” said Poscente, who points to JP Gladu, former president and CEO of the Canadian Council for Aboriginal Business, who talked about moving from managing poverty to managing wealth.
“Building that asset is so important for building resiliency for your family in case something bad happens,” said Poscente.
To join the program employees must have worked with Backwoods for at least six months.
The matching RRSP money being offered to Backwoods Indigenous employees comes from the revenue generated by the company.
Qualifying for the program and getting the financial help isn’t a guarantee for a life-time job with Backwoods, says Poscente, although the company is operating stronger than ever, having achieved an average annual revenue growth rate of 185 per cent.
“We are very fortunate to have a lot of work. We are busy. We are financially very healthy. We are fortunate enough to have Indigenous employees who have been with us for a long time, but there’s no guarantees in this industry or this market,” said Poscente.
Alexis Sioux Nakota Nation Chief Tony Alexis and Poscente are active with Iron Coalition, a group spearheading the Indigenous ownership of the Trans Mountain Pipeline expansion. However, whether or not Iron Coalition is successful should have little impact on employee numbers for Backwoods, which is already an active participant in the construction of the pipeline.
Backwoods Energy Services is a winner of a 2019 Waterstone Most Admired Corporate Culture Award in Canada. The award recognizes organizations within a specific industry for having made an outstanding commitment to corporate culture within its first few years of operation.