NTI, GN release revised incentive policy to benefit Inuit and Nunavut businesses
Incentives tighten to keep money in the territory
Michele LeTourneau
Northern News Services
Saturday, May 21, 2016
NUNAVUT
Nunavut is one step closer to a more equal contracting environment thanks to a new policy which will ensure preference is given to Inuit business owners.
The revised Nunavummi Nangminiqaqtunik Ikajuuti (NNI) economic development policy was proposed by Inuit representatives Nunavut Tunngavik Inc. (NTI) several years ago and completed through a partnership with the Government of Nunavut. On May 13, NTI president Cathy Towtongie announced the new policy was complete and would come into effect next spring.
The goal of the policy is to help the territorial government ensure its obligation to support Inuit-owned businesses as outlined in Article 24 of the Nunavut Land Claims Agreement is observed. It will increase incentives for the use of local and Inuit businesses and labour. Adjustments reduce the bids of Nunavut-owned companies allowing them to effectively compete with southern companies vying for contracts.
"NTI believes the newly revised NNI policy is a positive step toward creating a more equitable contracting environment in Nunavut, as envisioned through Article 24 of the Nunavut (Land Claims) Agreement," said Towtongie.
"During the consultation process of the NNI policy revisions, NTI strongly advocated on behalf of Inuit firms, and the concerns we presented were respected and addressed within this new policy. I look forward to the changes that will grow our territorial economy."
The consultations took place over four years.
Two years ago Towtongie told Nunavut News/North the existing policy was not working in Nunavut. The assessment was substantiated by the Auditor General of Canada in 2012 and accompanied by a 166-page external report.
One major change is the new definition of a Nunavut-owned business which was rewritten. When the new policy comes into effect next April, a business will need to be 100 per cent-owned by Nunavut residents in order to qualify.
Previously, businesses were only required to have 51 per cent Nunavummiut ownership to qualify for incentives. This was changed to ensure benefits from Nunavut business bid adjustments go to residents instead of business owners from outside the territory.
There are two business registries in the terriory: the Inuit Firm Registry, held by NTI, and the NNI Business Registry which lists Nunavut-owned and based businesses held by the Government of Nunavut.
The new bid-adjustment formula increases contracting opportunities from 21 to 25 per cent for Inuit firms that have greater Inuit ownership, as follows:
- five per cent for Nunavut business;
- five per cent for local firms;
- five per cent for Inuit firms on the NTI Inuit Firm Registry;
- an additional five per cent for Inuit firms with 76 per cent or more Inuit ownership; and
- an additional five per cent for Inuit firms with 100 per cent Inuit ownership.
Additionally, new bid adjustment caps have been put in place to support consistent application of the policy with clear and transparent criteria limiting costs generated by implementation of Article 24:
- for mixed goods and services to a maximum of $125,000;
- for goods only, bid adjustment will apply to the first $125,000 only; and
- for all other procurement, the maximum allowable bid adjustment cannot exceed 25 per cent of the total bid value.
Similar changes were made with regard to incentives and caps for using Inuit labour.
"The changes to the NNI policy make it easier for Nunavut's local and Inuit-owned businesses to succeed and benefit," said Minister of Economic Development and Transportation Monica Ell-Kanayuk. "NNI advances our government's Sivumut Abluqta mandate by simplifying the rules to inspire and support local economic development."
A new penalty formula was also introduced for instances where Inuit labour levels did not comply with requirements. Previously, a non-compliant firm faced financial penalties, under the new policy will restrict the right of contractors to receive future bid adjustments.
This new penalty applies to all contracts.
An independent NNI tribunal will be established for appeals, with five members appointed by the GN and two by NTI.
The policy will be reviewed every five years.
