Kerry McCluskey
Northern News Services

Iqaluit (Nov 25/02) - It's official, Newfoundland shipping company Woodwards Oil Ltd. has won the contract to deliver fuel to communities in the Kivalliq and Baffin regions.

NTCL manager Kirk Vander Ploeg is disappointed the shipping company was pushed out of the fuel business in Nunavut. - Kerry McCluskey/NNSL photo

Public Works Minister Peter Kattuk made the announcement last Tuesday afternoon in the legislature.

By awarding the contract to Woodwards, Kattuk said the government would save $19 million over the next three years.

The Northern Transportation Company Limited (NTCL) held the contract in the Kivalliq region for 27 years and for six years in the Baffin region.

They still hold the fuel delivery contract in the Kitikmeot region.

Public Works deputy minister Ross Mrazek said Woodwards beat out NTCL and another Southern company in the request for proposals because they came through with the lowest bid.

The government is touting the decision as good business sense.

But many in the territory are crying foul because cabinet refused to include the Nunavummi Nangminiqaqtunik Ikajuuti (NNI) policy in the request for proposals.

The NNI policy is a set of government rules that control the awarding of government contracts in Nunavut. It gives an advantage through bid adjustments to businesses that are Inuit owned. NTCL is owned by Norterra Inc., a corporation jointly owned by Inuit in Nunavut through the Nunasi Corporation and by the Inuvialuit Development Corporation in the Western Arctic.

While NTCL is considered to be Inuit-owned, when the new fiscal year rolls around they will no longer comply with NNI requirements because Inuit own just 50 per cent of the company. As of April 1, 2003, NNI compliant companies must be 51 per cent Nunavut Inuit-owned. They risk losing their NNI status unless they change their ownership structure.

A dangerous precedent

Fred Hunt, the chief executive officer and president of the Nunasi Corporation, said he thought it was dangerous that cabinet can pick and choose where and when to apply the policy and when to ignore it.

"Once they start exempting parts of the economy from NNI, they start setting a dangerous precedent," said Hunt.

"Who gets to decide what is and what is not exempt?" he asked.

Coupled with the $75 million fuel re-supply contract NTCL lost to Shell Canada and Imperial Oil earlier this month, the second loss means the Northern company may have to lay off some of their 420 employees.

About 30 per cent of those employees are Inuit beneficiaries.

"The government hasn't taken Inuit ownership into consideration or the potential loss of employment," said Hunt.

Finance Minister Kelvin Ng said cabinet did take all the factors into consideration, but chose to leave the NNI out because of long-standing concerns about the high cost of quality fuel in Nunavut.

"It's obviously a difficult decision. You have to balance off supporting Northern and Nunavut-based businesses versus savings and cost-effectiveness," said Ng.

"The government recognizes they had to get value for their dollar given the issues surrounding affordable, quality gasoline. That was an issue since April 1, 1999."

South Slave okay

The loss of the contracts, however, is not expected to have any negative effect in Hay River, where NTCL is headquartered.

"I just don't see any impact in Hay River from where I'm sitting right now," says company president Cliff Abraham.

The only minor change might possibly be a re-deployment of some cargo handling equipment to Hay River from Nunavut, where the company has a tugboat and four barges, Abraham notes.

The NTCL president says it is obviously disappointing to lose the two contracts in Nunavut. "But that's business," he said.

Abraham says the company will soldier on and look for other opportunities, and await the chance to win back the lost Nunavut contracts.

None of the fuel covered by the lost contracts passed through Hay River.