Blachford owner issues statement after lodge’s abrupt closure

The owner of Blachford Lake Lodge says “extreme inflationary pressures” and medical concerns contributed to the sudden demise of the business last week.

The lodge, east of Yellowknife, was for decades one of the city’s premier tourist attractions, offering fly-in fishing and hiking in summer and the prospect of the northern lights in winter.

However, the lodge abruptly closed down on Wednesday last week. A notice posted to the company’s Yellowknife office door said it was “ceasing all operations” because expected funding had not materialized.

All staff were laid off immediately, a development that stunned those working for the company and, some employees said, left them each owed more than $10,000. In some cases, staff as young as 19 said they were left with nowhere to go. The lodge’s manager said she only discovered she was being laid off when colleagues checked their emails and told her.

The lodge entered bankruptcy protection on Friday.

Lodge owner Mike Freeland did not respond to requests for comment last week, but issued a press release to Yellowknife newsrooms on Monday.

In his statement, Freeland said the lodge’s resources were “depleted” by the Covid-19 pandemic’s effect on the NWT’s tourism industry.

Despite receiving “its highest bookings ever” following the ending of the pandemic public health emergency, Freeland said prices – set “many months before guests arrive” – had not kept up with increasing inflation that was costing the business more money.

Inflation in Yellowknife peaked at just over eight percent in June last year according to Statistics Canada figures. The latest data, published last week, shows the February year-on-year inflation rate for the city was 5.8 percent, a little higher than the Canada-wide rate of 5.2 percent.

“With the pressures of the day-to-day operations of the lodge and also being distracted by medical challenges, I am left exhausted and overwhelmed by the circumstances that we find ourselves in today. I have given everything I have and spent all of my energies and resources,” Freeland stated.

A listing with realtor Coldwell Banker that initially offered the lodge for sale for $3.9 million has not been accessible since Friday.

Freeland stated: “By offering the lodge for sale, it was our hope that the new owners would inject the resources needed for Blachford to continue to offer the level of service that has made Blachford famous.”

He said he had worked hard to find “the resources needed to bridge the period when the new owners would take over,” but had not been successful.

“I am personally devastated about how things turned out and am truly sorry that we were not able to meet our obligations to our staff and guests to provide an experience of a lifetime. At the same time, I am overwhelmed with gratitude for those who have reached out to help and the dedication of our staff,” Freeland wrote.

He said he had travelled to Edmonton for medical tests and asked that his privacy be respected.

“I will continue to try to find ways to mitigate the impact of Blachford closure on our staff, guests and suppliers,” he wrote, confirming that the lodge had entered bankruptcy protection.

More: Read Mike Freeland’s letter in full

BDO Canada, which is understood to be managing the insolvency process, will now “update Blachford’s payroll records,” Freeland wrote, and will “notify all known creditors of the lodge” of next steps, guests included.

Multiple Yellowknife businesses have offered support and work to six members of Blachford staff who described the lodge’s sudden demise in interviews on Friday.

Two former members of staff at the lodge have since told Cabin Radio that even in their time at the business, some five to 10 years ago, Blachford appeared not to have a sound financial footing.

“The lodge has always been struggling,” one former employee wrote.