An NWT MLA questions why some of the world’s largest companies are benefiting from the NWT Business Incentive Policy (BIP), which is designed to favor doing business in the North.
The policy provides for bid adjustments for Northern-owned companies to give them an advantage in bidding for government contracts and keep taxpayers’ money in the area.
Schedule 3 of the Directive lists 54 majority-owned non-resident companies that will 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 incentives policy?” Johnson asked in the lawmakers’ session Monday.
“It’s not just Walmart, it’s the entire Plan 3 business incentive policy…why do we have to grant Loblaw’s preferential offer adjustments?”
Johnson asked Industry, Tourism and Investment (ITI) Secretary Caroline Wawzonek why the list existed 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 “committed” as part of policy reviews made in 2010.
She said all companies that were already operating in the area at the time were and continue to be included in the policy.
Wawzonek said the procurement review is expected during the lifetime of this administration – which ends this year.
She said removing the list was a recommendation ITI heard through the procurement review, but Wawzonek declined to say whether the department would actually do so.
“I’m afraid the member will have to wait and see how this develops,” she said in the Legislative.
Using Johnson’s examples, Wawzonek said Walmart and Loblaws, along with other Schedule 3 companies, have not bid on a territorial contract in over a decade.
“In that sense, they’re sitting there, but they’re not really benefiting from being in Schedule 3,” she said.
Wawzonek said the more difficult circumstances are companies that started out as Northern businesses but then grew to compete nationally.
Clark Builders, also on the list, is another example Johnson struggled with. Although the company started in the North, it has grown into one of the top 10 construction companies in Canada, according to Johnson.
“They no longer have to adjust their bids,” he said.
Johnson acknowledged that not all 54 companies on the list should be excluded from the GDP adjustment but said “the only fair thing” would be to remove the entire list and see if some of the companies reapply.
He said the companies are competing with local GDP-registered firms that hold North Dollars in the area.
“These companies, which have been bought and sold over and over again until they are part of global consortia with thousands of employees, are now being customized in their offerings without justifiable reason, and anything that is doing this is costing taxpayers more money,” Johnson said .
Loblaws Inc. and Walmart Canada were not immediately available for comment.
