Inuvik (Aug 29/03) - Critics of changes to the Business Incentive Policy (BIP) are saying the new regulations came out of the blue and leave small business out in the cold.

Charles Dent, chair of the standing committee on accountability and oversight, said the changes to the BIP were premature and short-sighted.

"They are going ahead with changes, without having any background information as to what the problem is," Dent said. "They have no way of knowing if this will solve the problem."

Dent said there were no real numbers to work from regarding the BIP to know if the costs outweighed the benefits, so they were supposed to complete a study before any decision was made.

"Right now, we don't have a clue," he said. "What problem are we going to solve, if we don't even no what's wrong to begin with."

Dent feels the biggest difference in the changes will come to the construction industry.

Bill Aho, president of the NWT Construction Association, said the new policy will benefit large contractors, but will squeeze out the small operators.

The current policy has no set limit to the application of the BIP, but the new policy limits that to $1 million.

On a construction contract, the general contractor will hire sub-trades and suppliers.

"On a $10 million contract, if the BIP is limited to $1 million, the general contractor will utilize that entire million dollars and everybody else is left out in the cold," Aho said. "By limiting it to the big guys, the little guys will be left to compete with everybody in Edmonton for what's left."

He said this was the issue when the BIP was debated 15 years ago, when the policy was amended to allow for Northern sub-contractors, suppliers, manufacturers and local labour.

"Well, they've eliminated all of that now," he said. "There is no obligation for the general contractor to use anybody."

"If he's chewed-up the entire million dollars of the BIP, then it's a business decision and the business decision is the best price wins."

Aho said the new policy has also eliminated the word "supplier," which could have great impacts on Northern building supply stores.

"Now every contractor becomes a supplier, because his qualification allows him to do all of those things," he said. "So rather than buying from the local building supply stores, he can buy his supplies in Edmonton."

While the NWT Construction Association was part of ongoing consultations on the BIP, Aho said the changes came out of the blue.

"These were not part of any recommendations we made," he said. "As a matter-of-fact, we opposed this strongly."

The association asked the GNWT for a cost evaluation of what the BIP is costing the government, but said they have none.

"How are they justifying reducing costs, when they can't tell you what their costs are to begin with," he asks. "Where is the argument?"