N.W.T. MLA questions business incentive policy that rewarded southern business

MLA Lesa Semmler is calling on the minister responsible for Housing NWT to re-award  an Inuvik duplex construction contract to a company registered under the territory's Business Incentive Policy. (Natalie Pressman/CBC - image credit)
MLA Lesa Semmler is calling on the minister responsible for Housing NWT to re-award an Inuvik duplex construction contract to a company registered under the territory's Business Incentive Policy. (Natalie Pressman/CBC - image credit)

An N.W.T. MLA is asking how a contractor not registered under the territory's business incentive policy beat out four other bidders who are, to win a duplex construction job in Inuvik.

To be registered under the Business Incentive Policy (BIP), a company must prove that its ownership is at least 51 per cent in the Northwest Territories. When competing for contracts, BIP-registered companies receive bid adjustments to give them preference over non-BIP companies. The goal is to keep taxpayer money in the territory.

Not only did the non-BIP registered company beat out registered companies, it benefitted from the same kind of bid adjustments given to those registered companies.

The company that won the bid, 6240 O/A Beaufort Construction, is not listed under the BIP registry. Nonetheless, it was awarded the $1.45 million contract. A document shared with CBC by Inuvik Twin Lakes MLA Lesa Semmler shows that had the company not received BIP adjustments, it would have lost the bid to a BIP-registered company.

Beaufort Construction, which lists an Inuvik address and another in Edmonton, did however have its bid BIP adjusted along with its competitors, according to tender and award documents.

A spokesperson for the department of Industry, Tourism and Investment (ITI) — the department which maintains the BIP registry — confirmed that the company was not BIP registered, but did not explain why the company appeared to have received BIP accommodations.

But in the legislative assembly Thursday, ITI Minister Caroline Wawzonek said non-BIP companies can be given BIP adjustments if they commit to using local subcontractors.

According to Inuvik companies, however, Beaufort Construction isn't using Inuvik supplies and labour for the project.

In a document tabled in the legislature Wednesday, four Inuvik companies signed a letter saying the awarding of the duplex contract is "cause for serious concern."

The letter was written by Irvin Perry, owner of Co-fly Construction Ltd., who missed out on the bid, and signed by three other Inuvik-based businesses who provide mechanical, plumbing and heating services (not businesses who had bid on the project). The letter asks the minister of ITI to "question the legitimacy of a southern company getting almost the same BIP evaluation as a local registered BIP company."

The letter called for an urgent response and said that "if not stopped immediately," overlooking BIP businesses for northern contacts "will erode the BIP policy that is meant to bring long term commitment and investment to the N.W.T."

screenshot Open NWT
screenshot Open NWT

MLA Semmler is calling on Paulie Chinna, the minister responsible for Housing NWT, which awarded the contract, to review the process that allowed this to happen, pull the contract and re-award it to an appropriately BIP'd company.

"It goes against everything that we said we were going to do as a government to encourage the local economy," Semmler told CBC News. "Especially after COVID."

She also said there needs to be accountability to ensure companies that say they're going to employ local suppliers do as they say.

She said that someone should be reviewing companies and ensuring their actions align with their promises.

If a non-BIP company agrees to use local contractors to offset costs, "who's holding them accountable?" she asked.

"If we're expecting our people, our local companies to be BIP'd, then we should be following it and those contractors that are following all of the processes should be rewarded for that."

During an exchange in the legislative assembly Wednesday, Chinna told Semmler she was surprised to learn the successful bidder was not on the BIP registry. She told the assembly she would follow up with Housing NWT "to make sure these obligations are met."

Chinna said she would "exercise penalties if that's appropriate." The agency was not immediately available to clarify what kinds of penalties could be imposed.

Company awarded 23 bids since 2016

Semmler said the issue goes beyond just this contract.

With housing deemed a top priority for this assembly, Semmler said there's going to be an influx of housing projects.

"If it's not going to be also benefiting our local contractors who live, pay taxes, raise their families here and hire local, then what are we doing?"

According to OpenNWT  — a site dedicated to making government reports accessible —  6240 O/A Beaufort Construction was awarded the contract for the two-storey duplex on Sept. 21. The company is listed as having 23 successful bids totalling $9.2 million in the N.W.T. since 2016.

According to OpenNWT, the construction company does have a BIP ID number. When searched in the territory's BIP registry, however, none of the company's four names leads to any results.

David Wasylciw, the founder of OpenNWT, said the BIP data on his site is out of date since it can be hard to know when a company is removed from the BIP registry.

He said that if his site shows the company was BIP'd, it means they were registered in the past, but if they don't appear on the registry it means they were dropped. That could be because they wanted to or because they no longer qualified.

Looking at Beaufort Construction's BIP ID number, Wasylciw said it looks like the company was BIP'd prior to 2017 but that he doesn't know when they were dropped from the registry.

No one from Beaufort Construction was available for comment.