GN made the right decision

Not so long ago, Northern Transportation Company Ltd. was held up as a shining example of what aboriginal birthright corporations could be capable of doing — and rightly so.

Set up as a Crown corporation in 1934 by the federal government, NTCL’s barge service became an institution for people living in the Mackenzie Valley and the central and western Arctic. It’s provided a similar service to Kivalliq residents since 1975, hauling fuel and dry cargo along the coast of western Hudson Bay.

In 1986, two Inuit-owned birthright development firms, Nunasi Corporation and the Inuvialuit Development Corporation, joined forces to buy the company from the federal government. At the time, most northern residents applauded the deal, seeing it as a model for how aboriginal peoples could use their access to land claim compensation payments to gain control of the northern economy and build the kind of collective strength that leads to greater dignity and political power.

In 1995 and 1996, the NTCL’s political influence stood them in good stead. Backed by Nunavut Tunngavik Inc., NTCL mounted an aggressive campaign to win its first eastern Arctic fuel shipping and supply contract.

NTCL believed that some officials with the Government of the Northwest Territories had put themselves into a conflict of interest, due to close relationships they had with NTCL’s competitors. NTCL therefore feared that the contract might be awarded on the basis of corrupt motives. So the company hired Norman Inkster, a former commissioner of the RCMP, to conduct a private investigation of the GNWT and some of its officials. They also pressured the NWT premier into launching an investigation on behalf of the GNWT.

Guess what? NTCL got the contract, worth $90 million over three years.

In the six years since — the contract was renewed in 1999 — NTCL has bought fuel on the world markets and then shipped it to most Baffin and Kivalliq communities. In those years, no one ever had reason to question NTCL’s competence and honesty. They delivered on their commitments.

But in those years, fuel prices and fuel consumption rose sharply in Nunavut. The GN’s revolving fund for petroleum products, which is used as a kind of subsidy to even out the cost of fuel across Nunavut’s 25 communities, came under serious strain. The Government of Nunavut now spends a huge portion of its budget on energy costs — about $120 million a year, a figure that is climbing rapidly. And the national attention paid to the Kyoto accord, combined with those cost increases, has forced the government to take a serious look at energy consumption and energy conservation.

Though the Nunavut government could have communicated its intentions more clearly, it’s been obvious for at least a year that it wants to find new ways of managing energy consumption in Nunavut — including better ways of controlling the cost of petroleum products.

For some reason, NTCL didn’t get the message.

Except for the Kitikmeot region, it has been driven out of the fuel supply business everywhere in Nunavut. Some observers are even whispering that the company’s financial viability is in doubt — though this is likely an exaggeration. But it’s been a sad year for a proud, highly respected, aboriginal-owned company.

We don’t know why NTCL was incapable of providing competitive bids for the fuel supply and fuel distribution contracts that the GN awarded this year to non-Inuit companies. The public has little or no access to proprietary information held by private companies.

But if the message was cloudy before, after this week it’s crystal clear. When awarding contracts in areas of overwhelming importance to the public interest, the GN will put the public interest first. In this case, the public interest was in finding the lowest possible price for fuel.

Inuit ownership, even in the case of a non-NNI-compliant company like NTCL, is important. But the cost of fuel is a vital issue for Inuit hunters, homeowners and small business people. In this case, the best way to serve Inuit was to get the best price.

The GN made a tough decision when it decided to negotiate a lucrative fuel shipping contract with the Woodward Group, a non-Inuit firm based in Labrador. But it was the right decision.

JB