INUVIK
It’s the worst economy he’s seen in more than 30 years, said Joe Lavoie, owner of Inuvik’s Arctic Rim Supplies (the local Home Hardware).

Joe Lavoie, pictured at his Home Hardware business in Inuvik, and other local business owners share concerns over GNWT procurement policies. - photo courtesy of Joe Lavoie

Couple a difficult economy with a GNWT pilot procurement program that he and other business owners say is not working in their favour, and you have a recipe for business disaster.

“Whatever I’ve saved over the last ten years has been poured back in (to the business) just to stay afloat,” Lavoie told News/North.

On March 17, Lavoie submitted a letter to Robert C. McLeod, the minister responsible for the NWT Housing Corporation.

In it, he outlined several concerns related to a pilot procurement program started last year in the Beaufort-Delta.

While the details of that program were not made available to News/North by press time, Lavoie said he and other business owners in Inuvik feel the new program favours businesses operating outside the region that do not face the same cost of doing business as local businesses.

“Our costs of operation being in this region are substantially higher,” Lavoie said. “If you take the business we normally get out of this region, it’s going to affect the bottom line of doing business in this area. That’s going to affect employment opportunities.”

Lavoie’s business has 13 full-time employees, for whom he provides subsidized housing in Inuvik.

Mario Lemieux, owner of Inuvik’s Rocky’s Plumbing and Heating supports Lavoie’s letter to the minister.

“The territories are broken down into regions, and these regions have local suppliers,” Lemieux said. “I don’t see why we have to go all over the place for these tenders when you can get competitive bids from people in the region operating businesses on the same playing-field, cost-wise.”

Lemieux, in business since 1976, employs eleven people.

“In the past, previous to this new policy, the local housing authorities put out their tenders and invited people in the region to bid,” Lemieux said. “They got competitive bids for their product from the regional suppliers. It worked. They might have paid a little more, but they were helping to support the people who were here to provide the service. Without that support, people aren’t going to be around to provide that service.”

In an email sent to News/North on behalf of minister McLeod, the minister confirmed a pilot procurement project was initiated last year in the Beaufort Delta region.

He also stated that Inuvik companies were awarded 80 per cent of all pilot project contracts, and of contracts awarded in the Beaufort-Delta, 92 per cent were awarded to regional companies.

At press time, it was not possible to clarify if percentages were related to total dollar values awarded, or to the number of available contracts. It was also not possible to clarify what counted as a regional company.

It’s not only traditional trade and building supply companies that are feeling a financial pinch when it comes to what they say are GNWT purchasing policies that don’t work to support local and regional businesses.

Bernie MacNeil, owner of Inuvik’s Arctic Digital, told News/North that, in his experience, GNWT procurement policies have hurt regional information technology businesses.

Although MacNeil was not prepared to comment directly on last year’s pilot procurement project, MacNeil stated in an email to News/North that “…millions of dollars in IT purchases have been awarded to Yellowknife businesses at the expense of regional businesses.”

According to Lavoie and Lemieux, the previous procurement model saw tenders go out from the local housing authority to regional businesses. Those businesses would in turn bid against each other on projects.

The advantage of that scenario was that local or regional businesses share similar overhead costs. With extra-regional businesses entering into the bidding, it can be difficult for local companies to compete.

“They don’t have the expenses we have here in Inuvik,” Lavoie said. “It’s very difficult when you have a much higher cost of doing business. We’re trying to support the region and the communities in the region. It’s very difficult.”

The expansion of the GNWT procurement process to open bidding to suppliers outside the region may, in the short run, save the territory money, Lemieux said. But in the long run it could cost local economies and communities.

“We support the community and the community supports us, as is true in the surrounding communities,” Lemieux said.

“It’s simple math.”