Makivvik working on procurement policy to help small northern businesses
Current situation leaves Nunavik businesses at a disadvantage, says owner
Makivvik Corp. is working on a procurement policy that would help northern businesses better compete for contracts, says Andy Moorhouse, Makivvik’s vice-president of economic development. (Photo by David Lochead)
Kuujjuaq entrepreneur Willie Gadbois runs three businesses: a plumbing and heating company, one that does ventilation cleaning, and another called Nunavik Buildings that builds modular homes.
He said it’s hard for northern businesses like his to compete for contracts in the North.
“I am a very small business,” Gadbois said, adding the only contracts he gets are from local organizations that know him.
Larger contracts, he said, are very hard to win. Gadbois believes that Makivvik Corp., as a promoter of social and economic development in Nunavik, should do more to help businesses like his secure contracts in the North.
What’s needed, he said, is a procurement policy that would level the playing field he feels is stacked against northern companies like his.
Procurement policies can allow governments to finance and advise local businesses to help them compete in the market for larger contracts.
Gadbois says this can help small businesses grow into medium-sized ones or larger, which would make the region’s economy flourish. It would be especially helpful when he competes for work in the housing industry, he said.
In Nunavik, most projects are social housing built by the Government of Quebec, in affiliation with the Kativik Municipal Housing Bureau.
According to Gadbois, new housing developments are usually cheaper models created by companies from down south, instead of locally engineered models.
“If Makivvik Corporation could come around and say, ‘Hey, we have 300 houses we need to build, can you build 40 houses for us this year? And we will see how your houses do,’ it would be a good start and possibly lead to more work for northern businesses,” he said.
“But it never happens.”
Gadbois said that when companies try to start up in Nunavik, Makivvik should give them extra attention to help them withstand challenges.
In fact, Makivvik is working on just such a policy, according to Andy Moorhouse, Makivvik’s vice-president of economic development. He agreed the absence of a procurement policy is making it difficult for northern businesses to grow.
“We are trying to make sure that businesses in the communities will have traction that would allow them to springboard into a strong and independent business,” he said.
“Right now, we know they are struggling, we know there are a lot of challenges.”
Moorhouse said he believes that if contracts were to pay a bit more, then northern companies could fight for bigger projects. He said a procurement policy could ensure the contract-giver offers a premium which would partly subsidize the northern company’s bid.
But, he added, this “does not provide any guarantees of winning a contract, it just levels the playing field.”
To draft a policy, Moorhouse said he and his team found inspiration in Nunavut’s policy — the Nunavummi Nangminiqaqtunik Ikajuuti Implementation Act, implemented in 2017.
Government of Nunavut senior procurement and logistics manager Mark McCulloch said that policy uses bid adjustments that vary depending on the percentage of Inuit ownership in companies wishing to bid on a contract.
For example, a Nunavut company that meets all the policy’s requirements could bid as low as $22.5 million on a $30-million project with the government subsidizing the difference.
The policy helps Inuit companies receive, on average, 32 per cent of all government contracts.
As an example of a significant contract, McCulloch pointed to the $40-million deepwater port project that’s about to begin in Qikiqtarjuaq. Qikiqtaaluk Corporation, which has an all-Inuit board of directors, won that contract, he said.
“We know this policy has some success, because Inuit businesses are participating in the economy, Inuit firms are able to step up to the plate and bid on significant contracts,” McCulloch said.
The biggest issue that needs to be addressed with the NNI Policy is all the “potato companies” that claim to be 100% Inuit owned. A business man living in Montreal, Halifax, Winnipeg, etc finds a token Inuk partner, pays them 50k/year and they get full bid adjustments. The intent of NNI should be to ensure that it benefits Inuit business people (profits) and our communities through jobs and investment. 99.9% of the profits flow straight south to the “real owner” who is not Inuk. All the equipment and buildings are owned by the non-Inuk living in the south. Inuit were taken advantage of in the fur Industry, now they take big advantage of Inuit using a policy that should ensure that the majority of profits go to an Inuk business person. The policy should; 1) level the playing field and give a competitive advantage to “true Inuit owned businesses”; 2) The NNI policy should encourage and reward investment in our Territory. We need money to stay in the Territory and not flow south.
Wait.. what does Nunavut have to do with Makivvik?
I completely agree with Businessman Gabois. I have been pushing government agencies in Nunavik (KRG, KI, NBHSS and KMHB to start taking their own steps to support Nunavik Inuit businesses by asking them to start insisting that contract be granted only to those companies that have Inut content. But it never happens. Current leadership in Nunavik organization still sing the same song year by year, term by term. I believe it is high time that Nunavik Inuit businesses initiate a class action suit against the Federal and Provincial goverments for promises that were made in 1975 JBNQA that we would have priority on contract and first chance at employment. I have the in business since the early nineties and still today I am struggling to survives.
A very worthwhile objective! But here’s the snag – the big three purchasers (KRG, KI, NRBHSS) are required by law to go to public tender for major purchases, and the rule there is that the lowest valid bid gets the goodies. So I would strongly urge putting pressure on Quebec to modify the rules (extra points for being an Inuit Enterprise, eg.) In the meantime other organizations (co-ops, landholdings, Makivvik, etc.) should make sure they have a bidding process in place that doesn’t penalize Inuit Enterprise.
BTW, Andy, where are we with the Inuit Enterprise Registry?
I wonder what SOUTHERN BASED NON INUIT company Air Inuit works with for promotional material. What about supporting local business in Kuujjuaq?
My experience in dealing with local businesses in Nunavik is lack of quality in workmanship. Over inflated prices, and unqualified personnel in ownership. If Nunavik business needs Makivik to do anything,, I would suggest an investment in education and training and ensuring quality work, not to allow Nunavik business to even operate, just because they’re Inuit owned, if qualified work is lacking. Too many think, just because they’re Nunavik owners, gives them the right to do the work, and reaped the profits, wrong . I’m for a Quebec wide province of qualified people, not unqualified locals , just having rights, and doing unqualified work.
Someone should do an investigation and inventory of how much money is already wasted in theses local funded businesses. Over the years money has been available for starting a business, and are there any business that didn’t get off the ground even, and used up the funding anyway? Just saying in questioning form. There’s more to it I think, then just getting a boost to make these local businesses work. The bigger picture of capitalism and economic development can’t be put aside and keep the local business above water, just for local rights. It’s must include competition, and don’t forget service as well. I’m concerned about waste and dead end results.
There’s an issue with building out business that won’t otherwise survive. That’s exactly the whole concept in Nunavik, when these local enterprises are seeking survival in the real economic environment. Not to put down the need for protecting these enterprises from unfair competition. I can see certain criteria to protect them from that. The problem lies in the competitive market as capitalism works, if it can ever work well. . If you allow no competition, it becomes a monopoly. With that comes freedom to do business that has no other alternative then to use local services. The customer is the biggest loser. If you were to look at many of the local businesses, they’re so dependent on the south so much in the first place, that continues into this other protected aspect that they’re asking Makivik for, that it becomes subsidiary and just a strain on funded with negative returns of profit. I say allow them and other companies in Quebec free competition, and if they can’t survive , so be it.
What’s next, fund what? Maybe fund a local person to be a professional. I mean fund them on the local spot, no need to fund them for school, just fund them to work as a lawyer, technical work, even a physician, or math teacher. Or better, get them to teach the James bay, northern Quebec agreement, and we all win. Nothing from nothing, good circulation of funds, zero results, sound familiar?
“According to Gadbois, new housing developments are usually cheaper models created by companies from down south, instead of locally engineered models.” Nunavik Housing does just the same….partnered with a company in the south, built in the south and engineered in the south. What benefit other than Mr. Gadbois is the region benefiting? Why not build the houses in Nunavik and hire Nunavik Inuit to build them? The JBNQA already has a preference for Inuit companies, the contracts though are few and far between. Makivvik should focus on a policy that applies to Quebec and to the regional organizations funded by Quebec. Business owners should focus on ways to maximize benefit to the region including benefit to other local businesses.
Yes Charlie , your point is taken. But it’s kind of confusing with Gadbois, what’s he saying? I mean his company for houses, are built down south too, but that still down south, that’s not Nunavik built. He’s conflicted with his ideas. There’s no way anything can be fully Nunavik engineered it seems. You tell me how, or maybe Gadbois can explain himself more.