Jack Danylchuk
and Dawn Ostrem
Northern News Services
Fort McPherson (May 28/01) - A thousand kilometres removed from the NWT Development Corp. head office, Annie Margaret Kay knows that it is has maintained her job for the last 20 years.
"They own this place," said Kay, production manager at the Fort McPherson Tent and Canvas Shop.
The Fort McPherson Tent and Canvas factory is the showcase for the NWT Development Corporation's investment and job creation efforts.
For 30 years - the last 10 as a subsidiary of the Development Corp. - it has provided a dozen or more jobs, developed a cadre of skilled workers, and put much-needed cash into the remote Gwich'in community of 900 residents.
Last year it was down to six sewers, but the shop is now hiring and training a dozen new workers who started at $9.50 per hour.
The shop's bags, tents and tipis sustain a traditional aboriginal economy and serve as calling cards for the North.
"If we can get all our businesses operating like that we're doing good," Fred Koe, president of the development corporation, said in a recent interview.
"It pays almost $300,000 a year in wages and salaries that have tremendous spin-off effects in the community and the region. Several employees have their own houses. They are contributors to the bottom line of the community."
Sales from the shop were $493,73 in 1998 and $437,776 in 1999. Salaries and wages were $249,802 in 1998 and $301,557 in 1999, The operating loss was $209,731 in 1998 and $213,841 in 1999. It received almost $400,000 in subsidies from the corporation.
Benefits outweigh costs
In fact, the canvas shop has never turned a profit. But according to a 1999 cost-benefit analysis, the average $200,000 annual subsidy is a bargain, even though the jobs cost almost twice the $10,000 a year allowed for the corporation's subsidiaries.
The analysis commissioned by the corporation argues that the real cost of a job at the canvas shop is $7,700 a year.
At the time of the survey, the shop employed a manager and his wife and nine piece work employees.
The employees had been at the shop for almost 10 years. The average age of the workers were under 40 and they were split almost evenly between men and women. Their average wage was $18,752.
It was the sole source of income for five workers; two said it was 80 per cent of their income and two others said it accounted for only half the family income. Most of the money was spent in Fort McPherson on living expenses.
The study assumed that closing the shop would put at least seven of the nine wage workers on social assistance. That would require $80,000 in support payments from the territorial government and cost the community about $140,000 in after-tax spending.
The lost wages would reverberate through Fort McPherson and cut employment in the community by almost two jobs, bringing the total increased demand on social assistance to almost $100,000 a year.
By that measure, the study concluded that the net cost of each job to the GNWT was $7,700. But the analysis did not examine how much of the $350,000 a year the canvas shop spends on material purchases goes directly to southern suppliers.
