NWT Construction Association president Bill Aho. - Norm Poole/NNSL photo

"We understand that the government is going to proceed with its proposed changes," said Don Worral, association general manager.

"That would be extremely detrimental to our industry and to the entire territorial economy."

Introduced about 10 years ago, the BIP gives Northern contractors a 15 to 20 per cent advantage when bidding on government contracts.

Changes to the BIP were proposed last year by the Department of Resources, Wildlife and Economic Development (RWED).

The move followed controversy over contracts awarded during second-phase construction of the Slave Lake Correctional Centre.

The government waived the BIP for second-phase bidding, citing $5 million in cost over-runs during the first phase.

The most controversial change now proposed is a $1 million BIP cap on government construction projects.

"The difficulty with a $1 million cap is that it eliminates any BIP advantage whatsoever for companies below the general contractor level," said Bill Aho, association president.

That would hit hardest at small Northern contractors in trades such as electrical, mechanical, roofing, drywalling, structural steel, painting, drywalling, and cabinetry, he said.

Southern-based general contractors winning large GNWT construction contracts would have "no incentive under the revised policy" to hire Northern-based sub-contractors.

"The original intent with the BIP was to grow business in the NWT. That starts with the little guy on up. The GNWT says the changes are intended to assist small NWT firms, but the proposed cap will have exactly the opposite effect."

MLAs withhold support The re-drafted BIP is currently before the NWT legislative assembly's standing committee for accountability and oversight.

The committee is comprised of all 11 elected MLAs who are not in cabinet.

Committee chair Charles Dent, MLA for Frame Lake, said that after reviewing the draft BIP, the committee told RWED minister Jim Antoine in November that they could not support it without more information supporting the proposed changes.

Dent said if the government feels it is paying "too much of a premium" on construction contracts, it should be able to provide a detailed accounting that backs that view.

The committee has yet to see those numbers, said the MLA.

"We had a meeting with the minister yesterday (Tuesday). Let's say we had a very frank discussion. We asked the minister what premium we have been paying.

"In other words, what contracts have been awarded that incorporated the Business Incentive Policy and what was the premium on those contracts? They have not been able to provide that information to us."

The government doesn't need the committee's blessing to proceed anyway, Dent noted.

"The protocol is that if they are going to change a significant policy they will first ask the standing committees for comment. But there is no requirement that the government do that.

"They waived the BIP during second-phase construction of the correctional centre last year. They never spoke with or advised members of the legislative assembly who aren't on cabinet that they were going to do it. They just arbitrarily did it."

The MLA said given the committee's refusal to support the proposed policy, he is surprised the government hasn't simply effected the changes on its own.

The committee will meet again on the issue "within the next few days," said Dent, but he doesn't expect its position will change.

"That is that we are not in support of the proposed changes as they stand right now."