Yellowknife (Aug 22/03) - Companies must pay taxes to the territorial government if they expect to benefit from its incentive programs, Jim Antoine said last Friday as he outlined a new business incentive policy.

"We're focusing on companies that pay taxes in the North," said the minister of Resources, Wildlife and Economic Development.

Under the revised policy that comes into effect on Oct. 15, companies applying for bid adjustments must be legally registered in the NWT.

They must also own or lease a bona fide place of business in the NWT, must comply with the Payroll Tax Act and must file taxes to the territorial government.

In the case of a sole proprietorship or partnerships, the company must either be owned by a resident, or have the majority of ownership within NWT hands.

The business incentive policy applies to anything the government buys, with the exception of employment contracts and does not extend to credit card purchases or sole-source contracts.

The new policy includes a 15 per cent adjustment on the first $25,000 for goods contracts, to be applied to NWT content, with an additional five per cent applied to local content.

A 15 per cent bid adjustment will be applied on the first $100,000 for service contracts with NWT content, again adding 5 per cent for local content.

A 15 per cent adjustment will be applied to the first $1 million on construction contracts with NWT content. An additional 5 per cent will be allotted to local contractors.

The policy recognizes 1,422 registered businesses that employ 7,673 residents.

Bob McLeod, the department's deputy minister, said he expects close to 75 grandfathered companies will fall off the business incentive program registry.

Over all, McLeod expects the number of registered companies will level out at 1,300.

Antoine said the program only applies to government contracts but added, "it would be very good for the North if the diamond-mining industry filed their taxes here."

Denise Burlingame, president of the NWT Chamber of Commerce said the new rules to the BIP came as a bit of a shock to the chamber, since they had no input on the final policy.

"We were a little surprised at the timing, because after four years of consultation ... and without any warning, there it was in front of us," Burlingame said.

She said it's too early to tell what the changes mean to small business in the NWT.

"We've sent out the announcement as well as the policy to all of our members," Burlingame said. "At this point, we just don't know what the changes will mean for small business.""

- with files from Terry Halifax