SOMBA K'E/YELLOWKNIFE - The GNWT's Business Incentive Policy (BIP) could be on its last legs, but with the economy this hot, some Yellowknife business owners say the program's been made obsolete anyway.

Bob Fitzgerald, owner of Fitzgerald Carpeting, said that while the GNWT's Business Incentive Policy was once a crucial method of keeping southern contractors from snatching up Northern jobs, the bustling southern economy and waning southern interest makes the program unnecessary now. - Guy Quenneville/NNSL photo

Last week the GNWT announced its intention to remove the application of BIP from GNWT and community infrastructure projects due to a lack of competition or interest from southern construction companies.

The BIP allows businesses that have been located in the NWT for at least 10 years or have 51 per cent NWT ownership to bid up to 15 per cent higher on government contracts than southern firms.

But southern interest in government projects has waned, according to Bob McLeod, minister of Industry, Tourism and Investment (ITI).

"I'd say you could probably count on your hand the number of southern contractors that bid on anything ... any year," said McLeod.

He added it's "premature" to say BIP will be gone for good, because the GNWT still needs to review the program's application to other industries, like goods and services and trades, as well as consult MLAs and members of the territory's business industry before making a final decision.

But there is a possibility the program will be scrapped.

The amount of money the territorial government pays out to pad Northern bids has declined in recent years.

In 2007-08, the premiums came to $250,000, a 23 per cent decrease from 2006-07.

McLeod said those numbers indicate BIP is no longer an essential service.

The number of businesses registered under BIP has also decreased.

In 1998, some 2,008 businesses were listed in the registry; as of this year, there were 1,167.

There are 519 Yellowknife businesses currently listed under the BIP registry, accounting for 44 per cent of the registry.

Claude Mailoux, owner of CAMCO Construction, wouldn't miss the program if it came to an end.

"It never was to our advantage to use BIP because we don't bid on that many jobs from the GNWT," he said.

But he added "it would be good to keep it" for those businesses that do.

Lloyd Whiteford, owner of Capital City Construction, echoed Mailoux.

He said his business does only two to three GNWT contracts in a year.

He said BIP is not always necessary and is dictated by the economy.

"It seems like, when times are good, especially in the south, they seem to want to scrap the policy, because southern companies aren't going to come up here anyway," he said.

"But when times are slow, they bring the policy in to keep the southern contractors out."

Bob Fitzgerald, owner of Fitzgerald Carpeting, was a big promoter of BIP when it was created in 1984, registering his business as early as January 1985.

And while his business has benefited from the program, Fitzgerald says it's time for the program to go.

"Back in the 1990s especially, when the Alberta economy wasn't so hot, we had a lot of competition from down south.

"And there was a lot less work in Yellowknife," said Fitzgerald.

"What's happened in the meantime, the economy has got so hot, because of the diamond industry and other things, there isn't any reason, in my opinion, to have a business incentive policy."