Debates of March 31, 2004 (day 12)

Thank you, Mr. Speaker. Mr. Speaker, I give notice that on Friday, April 2, 2004, I will move the following motion: I move, seconded by the honourable Member for Tu Nedhe, that the Government of the Northwest Territories use the spirit and intent of the business incentive policy to its fullest advantage in promoting and growing NWT-based businesses;

And further, that the government undertake to conduct a comprehensive cost and benefit analysis of the business incentive policy and table it in the House during the fall 2004 sitting of the Legislative Assembly.

Mr. Speaker, at the appropriate time I will seek unanimous consent to deal with this motion today. Thank you, Mr. Speaker.

Thank you, Mr. Speaker.

WHEREAS the intent of the business incentive policy, as stated by the Premier in a return to written question on March 25, 2004, is to support the development and growth of NWT businesses;

AND WHEREAS northern businesses support the NWT economy by purchasing local goods and services, providing jobs and training, and reinvesting their earnings;

AND WHEREAS, due to the higher costs of operating a business and developing new products in the NWT, northern businesses may need preference adjustments to compete successfully with southern firms for government contracts and tenders;

AND WHEREAS there are instances where the government has waived the business incentive policy;

NOW THEREFORE I MOVE, seconded by the honourable Member for Tu Nedhe, that the Government of the Northwest Territories use the spirit and intent of the business incentive policy to its fullest advantage in promoting and growing NWT-based businesses;

AND FURTHER, that the government undertake to conduct a comprehensive cost and benefit analysis of the business incentive policy and table it in the House during the fall 2004 sitting of the Legislative Assembly.

----Applause

The motion is in order. To the motion. Mr. Delorey.

Thank you, Mr. Speaker. Mr. Speaker, the business incentive policy is an issue that has been before us for quite some time now. An enormous amount of time was spent on this issue during the life of the last Assembly. We tried to deal with this business incentive policy in many different ways trying to make changes to it. It was obvious from the discussions that we had with the public and industry during the last government in proposing to change the business incentive policy, that industry was not consulted in the changes that they were proposing. For the most part, they didn't realize where the changes had come from and they were not to address the issues that the northern businesses had issues with.

The contract that has brought this motion forward now that we're talking about was 22 mobile homes, or 42, whichever way you want to look at it, Mr. Speaker, is before us and brought this issue to the forefront again. On this particular issue, in bringing this motion forward I want to speak for a moment on the fact that I am going to support the Minister going ahead with this contract based on the fact that there is a need in the communities. The Executive Council has put a decision forward to do this to meet the demands in communities, however, I would support it to the tune of these first 22 trailers, and I am going to watch very closely and fight for the government to make a decision and look at northern industry, whether it's through a pilot project or a contract of some kind with northern businesses, to be able to build these units in the future in the North and create an industry that can handle that.

I know, Mr. Speaker, that there are many concerns with the BIP. It has been said that the Government of the Northwest Territories doesn't get any value for its money by using the business incentive policy. However, Mr. Speaker, when we dealt with this policy before it was very obvious that the government cannot quantify whether they do get value for money with using the business incentive policy or not. There are many things that northern businesses do by using the business incentive policy that we have to take into consideration when we're trying to determine whether the government does get any value for this policy.

I also heard that companies abuse this policy. But, Mr. Speaker, we have to remember that the policy was put in place for businesses to be able to establish themselves in the North and build capacity in the North. Businesses that have been successful in doing that, Mr. Speaker, have established their business here, they have built capacity, they employ our people, they contribute to our economy and, Mr. Speaker, for some part they have created a competitive base here in the Northwest Territories that in a lot of cases and a lot of contracts that go out take the business incentive policy right out of the picture anyway because it's one northern firm bidding against another one. In those cases, it's very hard to qualify what savings if any or what extra costs the business incentive policy puts to programs and contracts that the government is putting out there.

One of the biggest problems that we heard the last time with the business incentive policy in the last government was the fact that the business incentive policy in its present form is not policed enough, and that's what leads to abuse of the policy. There was nothing in the last set of negotiations that even indicated that there was going to be an increase in the policy, other than creating your registry for the business incentive policy. I think that that is still a major problem with this policy, is the policing of it and making companies and government live up to the intent of the policy when it was first put in place.

So, Mr. Speaker, I bring this motion forward to draw attention of this issue to the government, and I think that we have to. It's a policy of this government and I think that we have to show clear direction in this and leadership in following our own policy. I know the Minister has said that the policy or guidelines, but I think it goes further than that, Mr. Speaker. I think that we can't use it to our advantage when we want to, and justify that and turn around on another occasion and waive it just so that it suits our needs. What can we do with the policy? I think that the motion speaks to what we can do with this policy. I think that the Minister and the government should look at doing a comprehensive analysis of what this policy is, and I know that there must be lots of contracts out there that they do. Come back to this House and explain to the Members exactly what the costs are, and give us a good reason to either support or not support the policy.

But one of the biggest problems has been all along -- and industry has been asking for it -- is what are you basing your decisions on? Waiving the BIP or making changes to the BIP, what does it cost government, what benefits are we getting, and what is it costing us? I think in looking at that we have to look at a lot of issues, not just the price that companies are putting on bidding on a contract. I think they have to look at the northern content in that. How many jobs are we creating? How much money is staying in the North? I think that those are some of the very basic questions that the government has a responsibility to produce for Members to be able to make an informed decision.

So for my part in bringing this motion forward, I want to force the government or strongly encourage the government to take some action to get some concrete information on this business incentive policy so we, as Members and as a House, can decide on what we're going to do with this policy. Thank you, Mr. Speaker.

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To the motion. Mr. Braden.

Thank you, Mr. Speaker. My colleague from Hay River North has already made reference to the words, the time that this Assembly has spent on the business incentive policy not only in the last few days but over the last few years. I would not extend this, but to say that from the point of view of the business community who are principally the clients and this government's partners in developing and advancing this Northwest Territories, that the plea is for consistency, stability and integrity in the way we go about our business.

Markets grow and evolve. They have certainly done so since this business incentive policy was first introduced many, many years ago. There was a major rethinking and some retooling of the business incentive policy done late in the life of the last Assembly, Mr. Speaker. So we're just a few months into the next iteration of the business incentive policy.

For the most part, I felt that those amendments were constructive, and indeed they demonstrated that our markets are evolving. The point has been made that as competition grows among our northern established businesses, there should be less and less need for a policy of this kind. It was really created to help establish enterprises so that they could get on their feet and have some kind of parity with lower-cost southern businesses, and once they're going they can carry on on their own merits and be competitive. In the community of Yellowknife here, things have certainly changed a lot in the 40 years that I've lived here. In the last 10 years, they have changed remarkably. We have such a strong, diverse and competitive business community here. There is, I think, less and less need for this kind of government intervention. Interference in the market is not the right word, but influence. It's a demonstration, I think, of how a policy like this has helped our economy and our society. But Yellowknife is very much an exception to the NWT. There are smaller communities and our regional centres and then down to our very smallest communities, Mr. Speaker, that are continuing to try to grow their competitive business community. This is where businesses like this, that I continue to believe, need consistency.

But I would go back to what the message is and we continue to get messages from the business community saying that the way we manage this is not sending out a clear signal of consistency and stability. To the extent to which Cabinet has discretion to come in and amend, change or decide to defer or ignore this policy is not only putting me off balance and some of my colleagues, but the business community. This is what this motion is, Mr. Speaker. It’s a plea and a first resolution to use the spirit and intent of the business incentive policy to its fullest advantage. In those words, Mr. Speaker, spirit and intent, comes aspects of integrity, of consistency, of stability that we have to do better on when it comes to working with the people, our partners, in the business community.

Obviously I speak very strongly in support of this motion and hope that our colleagues in the government will indeed take our lead and look at the spirit and intent of this policy. It’s a good one.

To the motion. The Member for Range Lake, Ms. Lee.

Thank you, Mr. Speaker. I would like to thank the Members for making it possible to conclude our session here with these motions being proposed. Mr. Speaker, I obviously speak in favour of this motion. It is really disheartening, Mr. Speaker, for a returning Member like myself to have to go through what we have gone through in the last two weeks. We like to think that what we say here matters and that what we fight about is remembered, but for some reason, after we have gone through all that we went through with regard to the North Slave Correctional Centre for what seemed like forever in the last Assembly and all of the review that we went through in the last Assembly, we are right back to square one.

Mr. Speaker, governments have policies, laws and roles, and that’s one of the main things we do in this House and there are reasons for that. It sets a direction. It sets out direction and intention of the government and those policies are made based on the questions of public interest, public desire and things the government wants to achieve. I believe if we have government policies and if we have any respect at all, we should be following those.

Mr. Speaker, I understand -- the Premiers have said it many times -- the government has a prerogative to exempt themselves from certain policies. I might agree with that but, Mr. Speaker, that has to be an exception and an exception with justification. Governments cannot be allowed to willy-nilly wake up one morning and say for this project we are going to exempt this and for that project we will stick with this. Mr. Speaker, not only should they provide justification, but it should have good information. Everything I have heard in this House suggests to me that Cabinet has made these decisions on the basis of less than full information. Mr. Speaker, I do really hope the government will take to heart the content of this motion and the desire on the part of the Members on this side of the floor to speak to the Cabinet about the need to do this and what this motion is trying to achieve. In doing their cost-benefit analysis, I do hope the Ministers and Cabinet will not only just take into consideration how cheap they are going to get something if they bought it at cost in Edmonton, Las Vegas or anywhere. I can tell you, I am sure we can buy a lot of things cheaper down south but there are lots of other things that must be taken into consideration. Government has a role to be an example.

Like I stated earlier in the House, Mr. Speaker, I have gotten lots of phone calls from businesses and they say in government exempting themselves from this policy, why does the government expect the businesses to run at a loss? They have to be able to recover their cost of buying lumber in the North, hiring people in the North and paying a higher cost. That has to be factored in and analyzed against the benefits these businesses provide in terms of doing the work, paying the taxes, hiring northern labour, training our northern labour and providing constant service whether it’s building houses, building buildings or providing furniture, computer services, the list goes on and on.

Mr. Speaker, what has been lacking and what has been the most troublesome about what we are going through here about the government willy-nilly exempting themselves from policy is what Mr. Braden has already stated. That is the lack of stability and predictability that businesses have to deal with, because they never know from one minute to the next whether projects the government does would have BIP on it or not.

Mr. Speaker, Don Worrall, executive director of the NWT Construction Association, was on CBC and he asked a question of whether or not he should use the BIP or scrap it. The consensus of the businesses is you either have it, you use it or you scrap it. Don’t apply it to one project and not another. Mr. Speaker, Mr. Worrall stated: “As businesspeople, they would recognize that arbitrarily and periodically abandoning your own policy just leads to uncertainty among investors and if you are trying to attract businesses here to set up shop or expand and create jobs, you do not want to be fostering uncertainty in the investment environment.”

I believe that states the opinion of many business leaders, Mr. Speaker. If we are going to do business here, we need to know what the business environment is. If businesses want to make long-term commitments and invest in their plans, their shops, in training their labour and expanding, they need to know that they can rely on the word of the government and the policy.

Mr. Speaker, another thing that’s really disturbing about what we are dealing with, and I know this policy speaks to the general spirit and intent of the policy, but I think a very important part of this is the role and importance that the Cabinet Members on that side place on the Members on this side. Mr. Speaker, we have a consensus government and consensus government may mean a lot of things, but one of the most important things I consider that is important is that we don’t have party politics where government comes into power and they set up their own agenda with opposition Members attacking the government from lists one to 10. I would like to think that as a consensus government that we are equal Members in this House and if there is going to be an exemption of government policy, because it has to be justified, but anything that has implications, we should have a say in that. We should not have to line up with everybody else and get a press release or learn what government is doing from a tender contract.

Mr. Speaker, I believe that this motion is telling Cabinet that we expect to be counted. We expect to be consulted. Where there is an exemption of a policy like BIP, we expect to see the cost-benefit analysis. It should be completely embarrassing on the part of the government and all the number crunchers in that apparatus of the government and all the Ministers who sat around and made this decision to exempt themselves from the policy, that they have not done a comprehensive cost and benefit analysis. I think all they have to do is listen to the people, listen to the businesses, think about what they heard and understand that there are many factors that have to go into calculating benefits and cost than just simply figuring out how cheap whatever it is they are buying or building will be.

Mr. Speaker, I believe there is an imbedded understanding in this legislature. We understand, appreciate and accept the need for sole-source contracts, negotiated contracts. They are practiced in many places. I remember the government defending to the teeth that we had to do sole-source contracts on fire suppression. That is $20 million. The contract was only for two years, it was renewed for five. At that time, we were convinced of the merits because it’s in our interest to protect our industry. It’s in the interest to make sure that $20 million doesn’t fly south of 60, that all the training and all the investment on that project is worth keeping and that government is willing to pay the premium because in the end we don’t pay the premium. That is the biggest misnomer that we have to dismiss right here and right now; that BIP costs money. It’s only if you are counting dollars and cents how much cheaper you can get in raw numbers would you say that that costs money. Only if you are not taking into consideration what you get from taxation, from job creation and all the contributions that businesses and people make, then you would come to that false conclusion that the BIP costs money. The government has entered into a contract with the Gwich’in Tribal Council and we understand that that work will go to the Gwich’in government. We understand that and we accept that. So why is it that something like this comes up and we say we are going to get rid of that because we could get it for $10,000 cheaper? I don’t think we should continue to tolerate the complete lack of respect for the businesses and for the Members in this House, in the way the Cabinet make their decisions, Mr. Speaker. If they are going to not follow the norm and exempt themselves, I expect more information, justification and understanding than what they have shown so far.

Mr. Speaker, I don’t think there is anybody out there who doesn’t understand where I stand on this. I hope I don’t have to speak about this so much again. I think the Cabinet gets the point. I hope the Minister and Cabinet and the government would take the full understanding of this motion and in calculating their cost-benefit analysis, that they do a comprehensive cost-benefit analysis and not just how much an extra five or 10 percent might cost.

With that, Mr. Speaker, I am happy to be supporting this motion and I thank the Members and this House for the opportunity to end this session by addressing this important issue. Thank you, Mr. Speaker.

To the motion. The Member for Nahendeh, Mr. Menicoche.

Mr. Speaker, I thank you for the opportunity to speak on this motion. I would just like to make mention to the Minister responsible for the Housing Corporation that I am supportive of the endeavour of the provision of the modular unit that is laid out in the tender contract and brought before us on one or two occasions. However, I will support this motion because the people and the businesses I represent are confused. If we are going to have a policy, let’s have a policy. Yes, the BIP costs our goods and services a bit more, but it does contribute and strengthen our economy, especially in the communities at the micro level. Therefore, I will support it based on that principle alone. Thank you, Mr. Speaker.

To the motion. Mr. Hawkins.

Thank you, Mr. Speaker. In short, we are seeking clarity and consistency. With a government that has priorities all over the map, I want to say at the end of my term, I was part of a government that listened, then acted and achieved results on an issue that is of real importance to all northerners. Thank you, Mr. Speaker.

To the motion. Mr. Ramsay.

Thank you, Mr. Speaker. I know my colleagues have addressed this issue and this motion in my mind and I will applaud them for that. I won’t take up too much more time on the motion this afternoon.

I think it’s very sad that we had to go to the extent of drafting this motion today to present to the government. It should be embarrassing for the government that the regular Members on this side had to go to this length to tell the government that you have a policy and you should live by the policy. Either you are going to support the northern economy and the northern manufacturing industry or you aren’t. That to me is the saddest thing of all this, Mr. Speaker, is that we have to draft this motion to try to send a message to the government that we want to be kept informed and we want to know what’s going on and we don’t take the waiving of the BIP on any contract lightly. We’ve got to define to our constituents and to the businesses that are out there what this government is doing and if we are not informed, we have a difficult time in doing that, Mr. Speaker.

So I am in full support of this motion and hopefully the government is paying attention and they are listening. As I mentioned earlier in my Member’s statement, they didn’t learn a lesson with what happened with the North Slave Correctional Centre. Again they chose to waive the BIP and look at the storm that it has caused. There is really no need for it, Mr. Speaker. The spirit and intent of this motion is to show the government that we are serious about this and we are not going to take no for an answer. We want some answers from the government. Again, I am supporting this. Thank you.

To the motion. Mr. Delorey.

Thank you, Mr. Speaker. Just in closing, I have a few comments on this motion. I want to thank my colleagues for their comments and support on this motion. Mr. Speaker, I sense a strong willingness on the part of industry to take part in this process of dealing with the business incentive policy.

Mr. Speaker it’s not a secret that a lot of businesses look to government for a portion of their business and a lot of businesses have built some capacity to supply a niche in the market that is created by government and to meet the requirements that government needs. For those businesses who have gone to the extent of building capacity and establishing in the North and are prepared to meet the government’s needs, now is not a time to pull the rug out from under them and say we are going to sidestep our policy and go south because we don’t think you are playing ball.

I think they are willing to sit down with government, with different departments, and if it’s a dollar issue and it’s not meeting the needs of the government now, I think they are willing to work with us and try to rectify that situation. Mr. Speaker, part of the reason I am supporting this contract of 22 trailers, I think the Housing Corporation has a lot to learn by going south with this contract. I don’t believe southern contractors, if they fill this contract, will care less if these trailers are going to where it’s 45 below for five or six months of the year. They will put them together for the cheapest price possible. I think there is a lot of benefit to have a northern contractor build these units because they live here. They know the northern climates and they know what needs to be in these units to meet the needs of the communities and I think there’s a benefit to that.

So, Mr. Speaker, in closing, I will encourage Members of this House to support this motion and I encourage the government to live by the intent of the motion. Thank you, Mr. Speaker.

----Applause

To the motion.

Question.

All those in favour? All those opposed? The motion is carried.

---Carried