Jobs, not profit, make NDC worthwhile, GN says

MICHAELA RODRIGUE

Nunavut’s sustainable development minister says the Nunavut Development Corporation (NDC) — recently criticized by the Auditor General of Canada for sloppy accounting and an unproven return on investment — is money well-spent.

“We’re not losing on this one, we’re gaining,” Sustainable Development Minister Olayuk Akesuk says of his government’s funneling $3.5 million into the NDC and its nine subsidiaries. Akesuk is the minister responsible for NDC.

The funding helped the NDC’s businesses break even. An audit of the NDC’s operations suggests many of the businesses would fail if it were not for government subsidies.

But Akesuk says jobs, not business success, is motivating the government’s investment in small arts and crafts and fishery businesses.

“We want to make sure that we support our people here in Nunavut. Get some training and make jobs. We’ll continue to support NDC as long as we can,” he says.

Hickes: it’s “a dead issue”

Last November, Auditor General Sheila Fraser tabled her audit of the Nunavut government’s first fiscal year, 1999-2000.

Fraser “qualified” her audit of NDC after serious weaknesses in accounting procedures were found within its subsidiaries.

More importantly, the auditor general’s report says it’s important to measure whether the subsidies are meeting their objectives, or whether the government’s money could be better spent elsewhere.

“There is not enough money for everything,” the report reads.

When asked to comment on the audit’s findings, NDC President and CEO John Hickes refused, and called the matter a “dead issue.”

Akesuk says 1999-2000 was the NDC’s first year of operation and its board was only struck six months into the fiscal year. With a board now in place, Akesuk says the accounting problems are being fixed and by the time Fraser’s next report is tabled, he expects a clean audit.

“It will be a much better report since the first year,” he says.

His department will also try to calculate what return the government should get on its investment.

The NDC is the Nunavut half of the old Northwest Territories Development Corporation, which was established in the early 1990s.

Akesuk says he would like to see the NDC’s subsidiaries become independent one day, but he stresses that job creation, not business viability, is the key criteria for determining whether or not these subsidiaries receive money and how much.

“The government’s mandate is to create jobs for the people so we’ll continue to support NDC as long as we can,” Akesuk says.

Other businesses, regular MLAs watching NDC

Iqaluit Centre MLA Hunter Tootoo heads up the Nunavut Legislative Assembly’s standing committee on government operations and services.

“We’re watching it and we expect some improvement,” Tootoo says. The committee also wants to see that steps are taken to quantify what the government is getting out of its investment.

Nunavut’s entrepreneurial sector is also watching the development corporation.

Jim Currie runs Iqaluit Enterprises Ltd., a fish and country food store in Iqaluit. He says the subsidies granted to NDC fisheries could represent unfair competition, but he says that to date, it hasn’t been a problem.

“I get quite a bit of my product from Pangnirtung. We just make sure that they remember that I’m here,” Currie says. For example, smoking fish and meat is a large portion of Currie’s business. He says Pangnirtung Fisheries Ltd., an NDC subsidiary, keeps him in mind and doesn’t smoke its own fish.

Claire Kennedy owns the Iqaluit-based gift shop, DJ Sensations Ltd. Like Currie, she purchases from NDC subsidiaries. The relationship, Kennedy says, has its pros and cons.

“They represent a lot of companies that I may not have access to otherwise.”

The setup also allows Kennedy to buy from numerous artists through one dealer. The trade-off, she says, is the markup that goes to the NDC.

Kennedy is hopeful that the NDC can help develop business skills within the smaller communities and at the same time help whet southerners’ appetite for the products.

Eventually, Kennedy says, the businesses should be weaned off government money.

“If we want to develop the market, you have to start somewhere. After a while, though, after they’ve proven themselves, it should stop.”