MLA calls out business giants competing with locals in N.W.T. business incentive policy

One N.W.T. MLA is questioning why some of the largest companies in the world are benefitting from the N.W.T. business incentive policy (BIP) designed to favour northern business.

The policy creates bid adjustments for northern-owned businesses to give them an advantage when bidding on government contracts, and to keep taxpayer money in the territory. 

Schedule 3 of the policy lists 54 majority non-resident owned businesses that benefit from the adjustments. 

Rylund Johnson, MLA for Yellowknife North, said that list should be removed. 

"When are we going to remove Walmart from the business incentive policy?" Johnson asked in Monday's sitting of the legislature. 

"It's not just Walmart, it's the entirety of schedule 3 of the business incentive policy ... why do we have to give preferential bid adjustments to Loblaws?"

Johnson asked Caroline Wawzonek, minister of Industry, Tourism and Investment (ITI) why the list exists, and whether she would commit to removing it as part of her department's procurement review. 

Wawzonek said the companies listed in schedule 3 were "grandfathered in" under policy revisions made in 2010. 

She said that any business that was already operating in the territory at the time was included in the policy and continues to be included. 

Wawzonek said the procurement review is expected within the lifetime of this government — that ends this year. 

She said removing the list is one recommendation ITI has heard through the procurement review, but Wawzonek wouldn't say whether the department will actually do that. 

"I'm afraid the member is going to have to wait and see how that unfolds," she said in the legislature. 

Using Johnson's examples, Wawzonek said Walmart and Loblaws, along with other schedule 3 businesses, haven't bid on a territorial contract in over a decade. 

"In that sense, they're sitting there but they're not really gaining much benefit from being on schedule 3," she said. 

Wawzonek said the more difficult circumstances are companies that started as northern businesses but have then grown to compete on a national scale.  

Clark Builders, also on the list, is another example Johnson took issue with. Though the company had its start in the north, Johnson said it's grown to be one of the top 10 construction companies in Canada. 

"They no longer need their bids adjusted," he said.

Johnson recognized that not all 54 companies on the list should be barred from the BIP adjustment, but said "the only fair thing" would be to scrap the entire list and see if some of the companies re-apply. 

He said the companies are competing against local BIP-registered firms that keep northern dollars in the territory. 

"These companies that have been bought and sold time and time again until they're part of global consortiums with thousands of employees are now having their bids adjusted for no justifiable reason, and all it is doing is costing the taxpayer more money," Johnson said.

Loblaws Inc. and Walmart Canada were not immediately available for comment.