The Business Incentive Policy (BIP)

The BIP is designed to recognize the higher costs of doing business in the North and encourage NWT-based businesses to create employment and develop necessary experience and business skills. It offers preferential bid adjustments to qualifying companies—currently around 1,200—for using NWT and local content. Several BIP-related elements require review. One of the most complex and contentious is the determination of which businesses qualify for BIP status. To qualify, a NWT company must have 51 percent of its voting shares beneficially owned by a NWT resident. This is not always clear; nor is the definition of a company’s ‘bona fide’ place of business.

There is an issue of fairness when it comes to the 60non-resident companies that were grandfathered with BIP eligibility. Further, non-BIP companies can qualify for bid adjustments if they commit to using NWT resident labour, goods, and services; but this has proven difficult to monitor.

The NWT Manufactured Products Policy (NMPP)

The NMPP addresses the challenges of manufacturing in the North. Manufacturing in the North can be challenging, in part because of high input costs, small sales volumes and a lack of economies of scale in production and distribution. The NMPP provides incentives to support local production and the manufacture of goods for sale to the GNWT. BIP-registered businesses may apply to have their NWT-made goods registered as an Approved NWT Manufactured Products.

Manufacturers have identified concerns with the current NMPP citing: burdensome administrative and compliance requirements; a lack of government support for, or commitment to, the policy; and minimal provisions for appeal and review.

The Negotiated Contracts Policy (NCP)

The NCP allows GNWT to directly negotiate and award contracts in cases where benefits wouldn’t be fully realized through a competitive contracting process - or to comply with the Canadian Free Trade Agreement. The negotiation and awarding of contracts under the NCP must be authorized by the GNWT’s Executive Council. Most negotiated contracts support Indigenous businesses. The potential benefits of preferential Indigenous procurement, together with the GNWT’s commitment and obligations to support Indigenous governments, necessitates that an Indigenous procurement policy be strongly considered. Business and employment opportunities generated by growth in local and NWT Indigenous corporations and companies will benefit the broader economy.

Through its procurement review process, with expert advice, and in consultation with Indigenous governments, the GNWT is proposing the creation of an Indigenous procurement policy. Several models exist across Canada which can be considered or adapted for use in the NWT.

The Public Private Partnership (P3)

The P3 policy allows for partnership agreements with the private sector to develop public infrastructure and provide services as an alternative to traditional forms of procurement. The policy applies where costs exceed $50 million, where an appropriate transfer of risk exists between the GNWT and the private sector, the agreement includes an operating period, and the business case shows a clear net benefit over a traditional procurement approach.

A primary criticism of P3s has been that they often result in relatively little benefit to the NWT in terms of local business opportunities, employment, and

training. Through this procurement review process, the GNWT will continue to consider additional opportunities to enhance local benefits. Going deeper, it leads to an important consideration: whether P3s should continue to be an option.