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Northern or not?

Innovative construction system denied 'Northern' status

Richard Gleeson
Northern News Services

Yellowknife (Dec 07/01) - The rules for determining whether manufactured goods are "Northern" or not appear to depend, at least in part, on where in the North they are produced.

Yellowknife-based Energy Wall and Building Products Ltd. applied for the "Northern" designation for the prefabricated walls it manufactures in its Kam Lake Industrial Park shop. But in May, Energy Wall co-owner Manuel Jorge was informed the walls would not be regarded as "Northern," partly because the use of them would reduce the number of construction jobs in smaller communities.

"Isn't Yellowknife part of the Northwest Territories?" said Jorge, a 22-year resident of the North.

The "Northern manufactured" designation is far more than good public relations. Under the government's Business Incentive Policy, the government must use Northern manufactured goods when they are available and priced within 20 per cent of the price of Southern-manufactured goods.

Jobs weren't an issue

But a government official who chairs the committee responsible for determining which products are Northern said jobs were not the main reason for denying the designation.

Deputy minister of economic development Bob McLoed said Jorge did not prove construction using the prefabricated walls would cost no more than 120 per cent of conventional costs.

The proof is required under the interim manufacturing directive, the policy used to determine which products are Northern.

McLeod added that jobs are a consideration, though not mentioned in the directive.

"The spirit and intent of the Northern manufacturing directive is not to reduce the number of jobs available in smaller communities," McLeod said.

Frame Lake MLA Charles Dent raised the issue in the legislature during the last session.

He said it's what the policy states, not what it implies, that should matter.

Out of its league

"It appears to me the government is exercising powers it doesn't have," Dent said.

The walls Jorge builds are insulated by spraying in urethane, creating a seal far more airtight than conventional stick-built construction.

Jorge believes the walls are an innovation perfectly suited to the North's harsh environment.

Using them would result in lower costs than stick-built construction, he said.

If Jorge can prove that, McLeod said that regardless of the spirit and intent of the policy, "we would be more than pleased to give his product Northern-manufactured status."

The Northern designation is not the only hurdle Jorge faces. Tenders issued by the NWT Housing Corporation for building construction are designed for conventional stick-built construction.

The panel construction technique used with prefabricated walls does not fit the requirements of Housing Corporation tenders.

Jorge said he wants a chance to compete for Housing Corporation business on the merits of his product.

The government is reviewing its Business Incentive Policy. A discussion paper indicates a move to tax-based incentives would be more effective in promoting Northern business development.

McLeod said the interim directive will be replaced with a permanent policy "within the next six months or so."