Yellowknife (Sep 15/03) - Business advocates, and at least one territorial MLA say they were sandbagged by cabinet's recent decision to overhaul the NWT business incentive policy.

Speaking on behalf of many construction companies, the Northwest Territories Construction Association said the government has not done its homework on BIP changes.

"Most of the cabinet doesn't know the repercussions of changes to the BIP," said NWT Construction Association executive director Don Worrall.

He said proposed changes to the BIP will hurt construction-supply companies and will cause a flood of southern trades people into the North.

"Antoine admitted they didn't have enough information on which to base a decision, then they turned around and did it anyway," said Worrall.

The proposed $1-million cap for government construction projects "is definitely new," said Worrall.

The way it stands now, general contractors will use as many BIPed companies as they can to maximize the BIP credit, said Worrall.

What will happen now, says Worrall, is exactly what the BIP was intended to prevent.

"If they put the cap on, let's say a $10-million contract, the general contractor will use the $150,000 for the first BIPed $1 million of the contract on its own, and then will go wherever it can find the cheapest subtrades.

"We'll be flooded with subtrades from Edmonton, which was precisely what the BIP was supposed to be working against," said Worrall.

Hay River MLA fuming

It's not just the NWT Construction Association that is furious over changes to the BIP, some MLAs are saying they were stabbed in the back by the decision as well.

"I was extremely disappointed to hear of the decision, especially after Minister Jim Antoine sat with the members of the legislature and heard we did not support it," said Jane Groenewegen, MLA for Hay River South.

"We asked for a one-year monitoring period and we're looking for a cost-benefit analysis," said Groenewegen.

"Then, when we all went home for the summer, to do constituency work in our own ridings and were attending various functions, the minister and cabinet made a decision to go ahead," said Groenewegen.

She said the manner in which the BIP changes were introduced is another example of the government operating in the dark.

"They don't know how much it costs and they don't know the benefit.

"The cost of living is higher in the NWT. We're more remote and the wages are a little higher.

"The BIP was developed on the premise to develop a home-grown economy and they could never do that on price," said Groenewegen.

"The government is not as big a player as it used to be but we still need to use the BIP to foster economic growth," she said.

Trimming the budget was one rationale for thinning out the BIP.

"The government is facing some difficult economic times, but it's not like Northern business takes the price and tacks on 10 to 15 per cent. We're not even paying a premium a lot of the time," said Groenewegen.

News/North made calls to every cabinet minister Thursday on the BIP issue but none were returned.