First Air, Northwestel complain about loss of contracts to southern companies
While participants set up booths inside the Arctic Winter Games arena in Iqaluit ahead of the Nunavut Trade Show, many of the territory’s business people walked across the hall for a panel discussion on Nunavut’s newly amended Nunavummi Nangminiqaqtunik Ikajuuti, or NNI, policy.
And some of them were not happy with how that policy works.
The NNI executive coordinator, Ron Dewar, along with the Government of Nunavut’s procurement manager, Mark McCulloch, and Nunavut Tunngavik Inc.’s policy and planning director, Hannah Uniuqsaraq, lead the Sept. 19 discussion.
They said the government will ensure the April 1, 2017, rollout of the policy is a smooth one.
“We need to have a policy focused on Inuit business,” Dewar said. “The bid adjustment system we were using needed to be reworked.”
The NNI policy is the GN’s tool for complying with Article 24 of the Nunavut Land Claims Agreement, which says government must help Inuit-owned businesses in the Nunavut settlement area win government contracts.
The NNI system works by providing a competitive advantage to Nunavut-owned and Inuit-owned businesses.
The GN does this by applying bid adjustments that reduce their bid prices to theoretically lower levels than prices bid by non-Nunavut and non-Inuit companies.
This past May, after five years of consultation, the newly amended NNI policy was released to the public with stricter definitions of what counts as Nunavut-owned and Inuit-owned companies.
Several business people in the audience were noticeably concerned about the amended policy.
First Air President Brock Friesen told the panel that the GN frequently contracts southern airlines for cheaper charter flights, despite First Air’s investment in the North, and the approximately 400 people they employ in the Arctic.
A quarter of those employees are Aboriginal, Friesen estimated.
“My question is not about a company that fits, but a company that doesn’t fit,” Friesen told the panel.
“I don’t know how we can be made to fit. First Air is 100 per cent Inuit-owned, by the Inuit, by Makivik [Corp.], the Inuit of northern Quebec. The same people in Nunavut arguably.”
“For the sake of one per cent difference, I see southern carriers, who create no employment in the North, no long-term interest whatsoever in the North, yet the government gives contracts to southern carriers and gives us no preferential treatment, despite bending over backwards to be part of the economy in Nunavut,” Friesen said.
Dewar described the NNI policy as “constitutionally protected in Nunavut” and the GN must adhere to Inuit-ownership requirements as established by law.
“I would think if you’re up here, you have all your infrastructure, your crews, technology, investments, your building and facilities. Is it not possible that you would not be able to put in a bid significantly more competitive than someone who does not have the same facilities you have?” Dewar said.
“The Nunavut agreement is very specific to the Inuit of the Nunavut settlement area, it does not apply to the Inuit in Labrador, or Makivik or Inuvik, for example,” Uniuqsaraq added.
McCulloch said First Air could still get bid adjustment points for its Inuit employment in Nunavut, but suggested a First Air partnership with Inuit-owned companies like Qikiqtani First Aviation Ltd. would net additional adjustments.
Another attendee, who identified himself as an employee of telecom provider Northwestel, also criticized the GN for going out of Nunavut when purchasing supplies in bulk.
“Lets not forget that we have a business here in Nunavut and this is the way we can sometimes survive over the profitability level. And by bypassing contractors, companies that are well established in Nunavut for years and years, I don’t think it’s going to be helping in the long-run,” he said.
“It’s quite upsetting to hear that the GN, which is signing on the NNI policy, is bypassing its own rule to some degree.”
Dewar responded that for large supply orders outside of Nunavut, such as fuel, Nunavut cabinet ministers must sign-off on sidestepping the NNI requirements.
The Nunavut Trade Show will continue at the Arctic Winter Games arena building until Sept. 21.