Thank you, Mr. Speaker.
WHEREAS the intent of the Business Incentive Policy (BIP) has been to support the development and growth of the NWT business community and to encourage investment in the North;
AND WHEREAS northern businesses support the NWT economy by purchasing local goods and services, providing jobs and training, and reinvesting their earnings;
AND WHEREAS, in recognition of the higher costs of operating a business and developing new products in the NWT, northern businesses may need preference adjustments to compete successfully and fairly for government contracts;
AND WHEREAS the Cabinet has the authority to waive the Business Incentive Policy in appropriate circumstances;
AND WHEREAS the current Business Incentive Policy is grandfathered under trade agreements including the NAFTA and the Agreement on Internal Trade, which would not permit a new policy of this nature to be brought forward at a later date;
AND WHEREAS business representatives have spoken out in favour of retaining the principles of the existing Business Incentive Policy and in support of a policy that is more reflective of modern challenges while reinforcing and recognizing northern investment in our territory and communities;
AND WHEREAS previous Assemblies have undertaken protracted consultations that have always culminated in the retention of the Business Incentive Policy;
NOW THEREFORE I MOVE, seconded by the honourable Member for Hay River South, that this Legislative Assembly strongly recommend the government cease considering the elimination of the Business Incentive Policy;
AND FURTHER that this Legislative Assembly strongly recommend the government consider and undertake public discussion on options to revise the policy to better direct it to the benefit of businesses who file their taxes in the North.
Thank you, Mr. Hawkins. Motion is on the floor. Motion is in order. To the motion. The honourable Member for Yellowknife Centre, Mr. Hawkins.
Thank you, Mr. Speaker. I’m not going to spend a lot of time on it. I think the motion really speaks loud and clear to the issue. The fact is that northern businesses work and struggle here in the North to provide a good living, and they need opportunities presented for them. The BIP offers this opportunity and sometimes that competitive edge so they can compete successfully against southern contractors who fly in and take sort of the ripe or the prime best contracts being offered.
It’s been my experience that the BIP was developed because at one time, over 20-some years ago, more than 50 per cent of our capital projects and whatnot were going south. That sort of was the development, at least the thinking as to why it’s so important to have this to further encourage investment in the North. I’ve spoken to a number of people in the business community about this, and furthermore I’ve been contacted by a number of people in the business community about the BIP, and not one single person has said to drop the BIP. What they do recognize is it needs to adjust and maybe have little changes to be modernized, if I may say. I’ve even heard that people think the BIP should only apply to those who file their taxes in the Northwest Territories. I think that’s a really concrete incentive to encourage southern businesses to further invest in the Northwest Territories.
In my time as an MLA I’ve seen businesses move to the Northwest Territories and establish an office, a presence. They hire people. They mean well in the community. They invest goodwill in the community. That’s exactly the spirit and the intent of what the BIP has fostered, and I really agree with that.
I’m going to leave it on one more note and allow further debate by other Members if they so chose. The BIP, to me, truly represents symbolism that our government recognizes and wants to support business. It’s easy to say that, but you know what? This is action that proves we support northern business, and we want to see that continue to grow and foster in the North where it belongs and where we really appreciate it.
With that, I’ll leave it to other Members, if they so choose to speak to the motion. Finally, I’d like a recorded vote.
Thank you, Mr. Hawkins. To the motion. The honourable Member for Hay River South, Mrs. Groenewegen.
Thank you, Mr. Speaker. I’m glad this motion is being brought forward today. I, obviously, support it. I think we could spend a lot of time and money reviewing the BIP again. In fact, the BIP does not cost this government very much money.
As Mr. Hawkins said and as the motion says, if we delete the BIP or get rid of it, we will not have an opportunity to get it back. Most companies that are bidding…. Where it’s northern company against northern company, a preference or a premium does not even come into play. So in fact, it does not cost this government anything. I think the dollar value that’s been attributed to the premium being paid to give Northerners this advantage is somewhere around $225,000 — really a very small amount of money considering the number of contracts that are awarded by this government.
I am not really interested in seeing the government spend a lot of time and money. This question has been raised almost on an annual basis since I’ve been a part of this government. We should leave it in place. The risk and the potential downside of getting rid of it is far…. The benefits far outweigh it, for the very minimal cost we actually do pay on a premium. I would encourage Members to support this motion.
Thank you, Mrs. Groenewegen. To the motion. The honourable Member for Kam Lake, Mr. Ramsay.
Thank you very much, Mr. Speaker. I’ll be brief. The motion speaks for itself greatly. I agree with my colleague Mrs. Groenewegen on this. I think what needs to happen is we need to have a look at the BIP, and we don't need to reinvent the wheel. It has been, as Members have mentioned, reviewed numerous times over the years.
What needs to happen is that we need to focus our attention on truly northern businesses — businesses that contribute to the economy in the Northwest Territories. We can’t allow companies to be registered with a Business Incentive Policy where a guy is walking around the streets of Yellowknife or Inuvik or Norman Wells carrying a Blackberry or a cellphone, doing business in the Northwest Territories while, meanwhile, they have a workforce in the south — in Alberta or British Columbia, or in New Brunswick, for that matter. Again, I think we need to focus our efforts. We need to find out which businesses are truly northern, and we need to support the businesses here.
My fear if we do away with the Business Incentive Policy is that you’d see a lot of mid-sized companies pack up and leave the Northwest Territories. They would go south, and they would have a guy on the streets here with a Blackberry bidding on contracts, and they wouldn’t contribute as much to the local economy. That’s a big fear I have with any move to get rid of the Business Incentive Policy.
Again, I support the motion. It seems like, on almost an annual basis, we’re up here trying to defend the BIP. Let’s do the BIP right. Let’s get out there and make it stronger — identify northern businesses so they can succeed and contribute to the northern economy we have here, Mr. Speaker. Mahsi.
Thank you, Mr. Ramsay. To the motion. The honourable Member for Weledeh, Mr. Bromley.
Thank you, Mr. Speaker. I, too, support this motion and encourage my colleagues to support it.
I think a review of the policy would not hurt, to tune it up to truly benefit Northerners. It won’t surprise people to hear that I would really see a progressive policy that favours those businesses that use local materials, local energy, local employees and so on.
Our economy goes through dips and dives and rises and heights and so on, and the BIP plays an important role, especially during the lower periods. To do it in right now, just because we happen to have a roaring economy, is not good business.
I will be supporting this motion, and I thank the Member for bringing this forward.
Thank you, Mr. Bromley. To the motion. The honourable Member for Frame Lake, Ms. Bisaro.
Thank you, Mr. Speaker. I just wanted to add a couple of things to this debate. I certainly agree with all of the comments that have been put forward already. I don’t feel the BIP should be eliminated at this point. I do believe strongly that it needs to be revised and revamped.
I think one of the things that probably is not in the BIP policy at the moment are differences between large projects and smaller projects and between larger communities and small communities. The economies are very different in the small communities than they are, for instance, in the city of Yellowknife, and I think that needs to be considered.
I am certainly very strongly in support of a revision to the BIP. I don’t believe it should be eliminated at this time. I know there’s a lot of work that’s done on it — and probably on an annual basis, as people have said. Maybe we revise that, but we also should get input from the public. We’ve had comments already from the NWT Construction Association, and I found that letter to be very informative, with a lot of thoughts put forward in good form.
To that end, I don’t think I need to say anything else, but I will be supporting this motion.
Thank you, Ms. Bisaro. To the motion. The Hon. Premier, Mr. Roland.
Thank you, Mr. Speaker. The review of the Business Incentive Policy is laid out in the Member’s motion. As the Government of the Northwest Territories, we have to look at how this works for us. The Budget Address identified…. The wording is reviewed and the focus seems to be on elimination, but the process is the elimination of the Business Incentive Policy, particularly its application to capital projects, while maintaining its commitment to local and northern purchasing.
As the Member has noted, this policy is 24 years old. It’s not a question of whether the Government of the Northwest Territories will support northern businesses; it’s a matter of whether this is the appropriate tool, in its existing form, to stay in place. The fact is, as we found out in the last number of years — and the fact that the Supplementary Appropriation Act was reviewed just yesterday highlights the fact — that the capital program continues to be carried over because we’re not getting as much activity in the area of government projects. We would like to see more increased activity in that area in our communities to help get those projects off the ground. The analysis my colleague from ITI will be undertaking will look at consultation about this policy and come back to the Members of this House with what options might be available to us to support the local and northern businesses within our communities.
I think we have to look, as well, at the fact that the private sector that seems to be booming and driving our economy in this day and age does not have that same practice. As a government we continue to have the practice of northern hire, the support of northern contractors and purchasing in the Northwest Territories. We continue to support that, and we’ll continue as we go forward.
It is a fact that work has been done on this for quite a number of Assemblies, and we’re looking to take that work and dust it off and have another look at how that works in the Northwest Territories. We want to see and continue to support our smaller communities and get some competition and activity happening in those communities.
With that, Cabinet will not be voting on this motion but looks forward to working with the business community, Members of this Assembly and the public to try to come up with an appropriate tool that will continue to see business development in the North. The fact is we know it was a successful program, because many of the companies that started using it 24 years ago are now so successful that they’re bidding and doing work in Alberta and have limited their work in the Northwest Territories. We hope to see more businesses grow out of the North like those, but we know we need to have a look at this program and how it supports the business community going forward.
Thank you, Mr. Roland. To the motion. The honourable Member for Nahendeh, Mr. Menicoche.
Thank you very much, Mr. Speaker. I will be voting in favour of this motion.
Constituents and businesses in my communities have indicated over and over again that the BIP provides an advantage to those in the communities. It supports businesses in our communities, and it supports the fact that outside businesses are not moving in and taking away opportunities and even jobs from the communities. It does assist our communities. Just once again, I’ll be voting in favour of the motion.
Thank you, Mr. Menicoche. The honourable Member for Mackenzie Delta, Mr. Krutko.
Thank you, Mr. Speaker. I, too, will be supporting the motion.
Before I give that support, I’d like to mention that this policy is not perfect. We do have some challenges, especially in our small communities. We’re not seeing the benefits flowing to a lot of our communities with regard to projects, because of capacity issues and the high cost of running a business in a smaller community versus the larger regional centres, where you have lots of options. I think we have to look at the distribution of this policy and where it is working and where it is not working. More important is realizing that we have a lot of opportunities, but at the end of the day, you cannot have businesses going out of business or having to move because they cannot sustain a workforce or sustain a business by way of the viability of a business and the high cost of operating those businesses.
I think we have to tinker with this policy, but I don’t think we should totally eliminate it. I think we also have to work with the First Nations governments, corporations and whatnot and allow them the opportunity to take on some of that work by way of developing the ability to take on this work. A lot of these companies have been developing over the years and have gone out of business or had to get out of those businesses. I think we have to look at what’s working and what’s not.
I will be supporting the motion subject to some tinkering of the policy.
Thank you, Mr. Krutko. To the motion. I’ll allow the mover of the motion some closing remarks. Mr. Hawkins.
Thank you, Mr. Speaker. Mr. Speaker, just in closing I want to say that this side of the House has spoken in favour of this. I certainly appreciate the Premier’s point of view, but the issue really comes down to the fact that, while tinkering’s okay and adjustment’s okay, if this BIP doesn’t evolve, it doesn’t need to exist. The thing is, it’s not evolving, and that’s what we’re asking for. We’re saying we think it needs to evolve to properly exist, to be implemented out there for the business community so they can access it fairly and reasonably.
It won’t take long. Someday I’m just waiting for a Mexico company to bid under the NAFTA agreement, and all of a sudden they’re building a school or fulfilling a fancy, lush government contract on consultations or whatnot, and people will be kicking and screaming and wondering what happened.
Deleting or eliminating the BIP takes away that advantage of Northerners supporting Northerners.
Thank you, Mr. Hawkins. A recorded vote has been requested. All those in favour of the motion, please stand.
Mr. Hawkins, Mr. Jacobson, Mr. Beaulieu, Ms. Bisaro, Mr. Krutko, Mr. Bromley, Mr. Abernethy, Mr. Menicoche, Mr. Ramsay, Mrs. Groenewegen, Mr. Robert McLeod.
All those opposed, please stand. All those abstaining, please stand.
Mr. Lafferty, Ms. Lee, Mr. Miltenberger, Mr. Roland, Mr. Michael McLeod, Mr. Yakeleya, Mr. Bob McLeod.
Results of the vote: 11 for, zero against, seven abstaining. The motion is carried.
Motion carried.
Motions. The honourable Member for Kam Lake, Mr. Ramsay.
