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GNWT revises Build North policy

Updates include contract thresholds

Nathan VanderKlippe
Northern News Services

Yellowknife (Aug 23/02) - The GNWT is preparing to tighten the business incentive policy rules.

"I believe that these revisions will ... reflect the realities of the changing economy," said Jim Antoine, minister of economic development, at a press conference Thursday.

One of the most significant changes is the introduction of thresholds to the BIP, which will now apply only to the first million dollars of any construction contract.

A $25,000 threshold has been set for goods and services.

Antoine said 95 per cent of NWT construction contracts are below the threshold. However, numbers provided by the government show that, of the $33 million worth of contracts awarded in 1999-2000, the value of the contracts that exceeded the threshold reached $15 million.

In 2000-01, contracts worth $10 million topped the threshold out of a total of $26 million awarded.

The GNWT said it has not determined the cost to taxpayers of the BIP, nor of potential savings.

Bill Aho, president of the NWT Construction Association, said there's still "a fundamental difficulty" with trying to decide how it applies to contractors, sub-contractors and suppliers.

The GNWT has also made drastic changes to the definition that determines which "Northern" companies are eligible for the BIP. Instead of requiring a Northern residence for owners of most companies, the new BIP simply requires a business licence, bona fide Northern location and evidence of NWT tax filings in good standing.

Initial response

"Overall I think the revisions are positive," said Keith Houghton, a partner in J/T Electric and a member of the Construction Association.

Houghton said his opinion is preliminary as no one has had a chance to look through the revisions in detail.

"It's like a new car," he said. "It's all bright and shiny because it's brand new, but until you get in and start driving for a while you don't know where the rattles might be that need to be looked after."

Also new is a formal complaint mechanism, which will allow disgruntled applicants to make their case before a government committee.

Antoine said the GNWT will spend the next month discussing the policy with business and industry. It does not need legislative approval, and could go into effect for next fiscal year.

The government has no intention of suspending the BIP again, as it did with the North Slave Correctional Centre, Antoine said. He had no comment about remarks made by Public Works Minister Vince Steen, who said the policy is unnecessary in Yellowknife.

The BIP gives Northern companies a 15 per cent edge over competition from the South in contracts. It also provides an extra five per cent edge to local contracts.