Preserving economic capacity
Don Worrall Business Matters The NWT Construction Association (NWTCA) welcomed Industry, Tourism & Investment Minister Bob McLeod's recent pledge to "preserve the economic capacity" of the territorial economy and to promote greater non-resident investment. We trust, however, that Mr. McLeod is equally committed to preserving the Business Incentive Policy, because BIP is probably his most effective tool for fulfilling his pledge. By levelling the playing field with a bid advantage of 15%-20% over southern competitors with much lower operating costs, BIP has encouraged Northern companies to invest and flourish. NWT contractors, architects and engineers, for example, now rival mining in their contributions to territorial employment and GDP, but they would not have experienced anywhere near such progress without BIP. Operating in the North’s relatively small market is a high-risk proposition at the best of times. Success obviously depends on securing enough work to remain profitable. Had BIP not been in force to dissuade southern firms from “cherry picking” the most lucrative projects with low-ball bids typically based on underestimating the cost of building up here, Northern firms would have had more incentive to close or move south than to invest the millions they did. If it were it not for BIP, we would have far fewer contractors here today, far fewer career opportunities for youth and millions less in federal transfers and taxes flowing to the territorial government. It is sadly ironic that local businesses account for a sizeable portion of municipal tax revenues, yet most municipalities do not have a local preference policy like BIP. Think about BIP the next time you set out to buy lumber, need your furnace serviced or call an electrician; without the Business Incentive Policy your access to building supplies and trades people would much poorer than it is today.
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