Northern calls for exemption under NNI policy

PATRICIA D’SOUZA

The North West Company is trying to persuade the Government of Nunavut and Nunavut Tunngavik Inc. that it deserves a special exemption under the Nunavummi Nangminiqaqtunik Ikajuti, or NNI, policy.

But the company must wait until the GN and NTI, which administer and regulate the policy, resolve their own disputes.

The NNI provides competitive advantage on government contracts to companies that meet certain requirements.

Nunavut firm status, worth a 14 per cent bid adjustment, means a company is majority owned by Nunavut residents, maintains a “resident manager” or performs most of its management and administrative functions in Nunavut.

Local status gives a three per cent adjustment to firms based in the “subject community” or that employ a resident manager in the community.

Inuit firm status, also worth three per cent, applies to those companies in which Inuit hold more than 51 per cent of controlling interest.

The North West Company is based in Winnipeg, and does not qualify for local status. And because it is publicly traded, it does not qualify for Inuit status since its ownership changes from day to day.

But the company is seeking an exemption in the northern status category that would take into account its 74 per cent Inuit workforce, management trainee program, Inuit and Nunavut-based suppliers and education program that promotes the benefits of healthy foods.

“We want to be reinstated as a Nunavut business and we want to be recognized for who we are,” said Len Flett, the company’s vice-president of store development and public affairs.

“We’ve been lumped in as a southern retailer no different than the Walmart stores or Zellers stores out there. Our position is that we are different. We employ Inuit people and we’ve invested in bricks and mortar in Nunavut.”

The NNI, drafted in 2000, gave northern companies that qualified for preference under a Northwest Territories business incentive policy two years to come into compliance with the new rules.

The two-year “grandfathering” period ended last year. But the GN extended it by one year, in a move that infuriated NTI and almost ended up in court.

The extension expired on April 1, 2003, and forced companies such as the Tower Group of Companies and Nortext Multimedia (which owns Nunatsiaq News) to reorganize their corporate structure to meet the terms of the policy.

It forced the North West Company to get creative. The company says its proposal is consistent with the letter and spirit of the NNI, and furthermore, can help the GN meet its obligations under the Bathurst Mandate, the Clyde River Protocol and Article 24 of the Nunavut Land Claims Agreement.

Paul Kaludjak, NTI’s vice-president of finance, said he’s open to the company’s proposal, and will discuss it with the NTI executive at their next scheduled meeting.

But the GN and NTI can’t formally consider any requests until they resolve their own disputes regarding mediation. The current policy has no real process for considering changes.

So for now, the company must follow the policy as it is written.

“Currently, there are no exceptions,” he said in an interview from his office in Rankin Inlet.

“Our concern is the ownership issue. If any company wants to make a commitment, they have to break through with Inuit in Nunavut. That will confirm their commitment to us.”

However, he admitted the ownership issue precludes publicly traded companies from ever benefiting from the NNI.

“That’s something we’re working toward. We’re keeping our door open to achieve those kinds of things,” he said. “We support that fully, that those options be considered by those types of companies.”

Flett agreed that other factors should be considered to help publicly traded companies operating in Nunavut stand out from all other companies.

Southern conglomerates such as Walmart and Sears can submit lower bids because they don’t incur the extra expenses of operating in the North.

“We have huge bids, for instance, in the furniture market, housing programs,” he said, “and southern firms are able to underbid us mainly because they have no investments on which they would require a return, like we do.”

But, he added, the issue of winning contracts is secondary to the company’s aim of furthering the goals of Inuit employment.

“We can probably do more good as a company inside the NNI policy than outside. The government and NTI [drafted] the structure of the NNI policy as a tool for reaching some of the objectives that they’ve planned for themselves,” he said.

“All that we’re saying is that we can assist in helping them reach their goals.”