Pond co-op to fight NCC construction deal
The Pond Inlet co-op’s starting a court fight over the Ottawa-NTI deal that makes the Nunavut Construction Corporation the sole builder and owner of Nunavut’s new government buildings.
The Pond Inlet co-op has decided to walk their very loud talk.
Next week, after months of complaining about it, the thriving Pond Inlet business will go to court to challenge Ottawa’s plans for building Nunavut’s infrastructure.
Under those plans, a new firm called the Nunavut Construction Corporation will build, own and lease all of the Nunavut government’s new office and residential buildings.
The NCC is owned by the Nunasi Corporation and Nunavut’s three Inuit birthright development corporations. The scheme to create NCC and have that company own and manage Nunavut’s infrastructure is set out in a recent deal between Ottawa and Nunavut Tunngavik.
Violation of Article 24?
But Bill Umphrey, the manager of Pond Inlet’s Toonoonik Sahoonik co-op says that agreement violates the Nunavut land claims agreement.
Umphrey says that’s because the Ottawa-NTI deal ignores Inuit-owned co-operatives and other long-established Inuit businesses.
“The spirit and intent of that entire agreement was to protect Inuit and small Inuit firms and Inuit participation in economic activities within Nunavut,” Umphrey says.
Simon Merkosak, the mayor of Pond Inlet and the owner of Merkosak Construction, agrees with Umphrey.
“Why don’t they allow us to participate so we can have some meaningful benefits?”
Merkosak says small, community-based Inuit companies won’t get a fair chance to compete for sub-contracts and bring benefits to people in their communities.
“We’ve being sold down the river,” Merkosak said. “We’re saying that NTI negotiated with federal bureaucrats in bad faith on our behalf.”
NCC met with the community recently during its tour describing construction in each of the 11 communities.
Will communities benefit?
But Merkosak said NCC officials didn’t provide satisfactory answers to questions about who will benefit from the revenues generated when the buildings are leased to the Nunavut Government.
He said his company and others in Pond Inlet have the ability to construct and manage government buildings.
As an example, he pointed to the construction of a 15,000 square-foot co-op store in Pond Inlet.
But Merkosak said his small company can’t compete with the NCC, which is using land claim compensation money.
Merkosak also said he and others are afraid that, once established, Nunavut Construction will crush smaller Inuit companies that compete with them.
“People are experiencing real fear that once they’re there they’ll start competing in the private sector.”
The court challenge focuses on Article 24, the section of the land claim agreement that deals with making it easier for Inuit firms to get government contracts.
Article 24 states that “procurement policies and implementing measures shall be carried out in a manner that responds to the developing nature of the Nunavut Settlement Area economy and labour force. In particular, the policies shall take into account the increased ability, over time, of Inuit firms to compete and to successfully complete government contracts.”
But Yellowknife lawyer Geoff Weist, who’s representing the Pond Inlet co-op, says the Ottawa-NTI deal violates the intent of Article 24.
“It’s directly related to Article 24 and what we believe it says in terms of what the intent was as opposed to how they’re proceeding at the present time,” Weist said.
The NCC is expected to begin work this summer on new buildings in 11 Nunavut communities, including Pond Inlet.
Death to mom and pop businesses?
But Bill Umphrey says that because small companies aren’t allowed to own these buildings, they’re excluded from any long-term benefits.
“Why can’t they leave the community economic development to the communities?” Umphrey said. “Why are they trying to put little mom and pop construction organizations out of business at the community level?”
Umphrey said money from the lease payments of co-op owned buildings, such as those in Pond Inlet, flow back into the community through annual dividends and elders’ pensions. The more successful the co-ops are, the more their shareholders in the communities benefit.
A spokesperson with NTI’s business development department said that creating Nunavut Construction was the only workable method for beneficiaries, otherwise the project would have been put to public bid and likely awarded to a southern firm.
And he also said Nunavut Construction will have a training program and will hire high numbers of Inuit which he says a southern firm could not have done.
“There is no room for discussion about equity participation by groups other than the shareholders of Nunavut Construction, who represent all the landclaim beneficiaries,” he said.
And NTI says beneficiaries in all 26 Nunavut communities will benefit, not just those in the 11 communities that will get new buildings.
Umphrey suggested that a corporation with as much clout as NCC should bid on larger contracts, perhaps even foreign ones, and then let the benefits from that work flow back into Nunavut.