This is page numbers 1143 - 1180 of the Hansard for the 14th Assembly, 6th Session. The original version can be accessed on the Legislative Assembly's website or by contacting the Legislative Assembly Library. The word of the day was policy.

Topics

The Speaker

The Speaker Tony Whitford

Thank you, Mr. Braden. Item 8, written questions. Item 9, returns to written questions. Item 10, replies to Opening Address. Item 11, petitions. Item 12, reports of committees on the review of bills. The honourable Member for Inuvik Boot Lake, Mr. Roland.

Bill 25: Municipal Statutes Replacement Act
Item 12: Reports Of Committees On The Review Of Bills

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Floyd Roland

Floyd Roland Inuvik Boot Lake

Thank you, Mr. Speaker. I wish to report to the Legislative Assembly that the Standing Committee on Governance and Economic Development has reviewed Bill 25, Municipal Statutes Replacement Act, and wishes to report that Bill 25 is now ready for consideration in Committee of the Whole, as amended and reprinted. Thank you, Mr. Speaker.

Bill 25: Municipal Statutes Replacement Act
Item 12: Reports Of Committees On The Review Of Bills

Page 1161

The Speaker

The Speaker Tony Whitford

Thank you, Mr. Roland. Item 12, reports of committees on the review of bills. Item 13, tabling of documents.

The Speaker

The Speaker Tony Whitford

Colleagues, I wish to table the following document in accordance with Section 21 of the Legislative Assembly Retirement Allowances Act and Section 11.1 of the Supplementary Retirement Act, No. 1, I wish to table the Pension Administration Report to March 31, 2003.

The Speaker

The Speaker Tony Whitford

I would also like to table, in accordance with Section 23 of the Official Languages Act, the Annual Report of the Office of the Official Languages Commissioner for the Fiscal Year 2002-2003 in English and French.

Item 13, tabling of documents. The honourable Member for Yellowknife South, Mr. Bell.

Brendan Bell

Brendan Bell Yellowknife South

Thank you, Mr. Speaker. Mr. Speaker, I wish to table the results of an inter-jurisdictional survey conducted by the Standing Committee on Social Programs on levels of support for disabled persons across Canada. Thank you, Mr. Speaker.

The Speaker

The Speaker Tony Whitford

Thank you, Mr. Bell. Item 13, tabling of documents. The honourable Member for Mackenzie Delta, Mr. Krutko.

David Krutko

David Krutko Mackenzie Delta

Thank you, Mr. Speaker. I would like to table a document with regard to the Department of Health and Social Services regarding palliative care programs.

The Speaker

The Speaker Tony Whitford

Thank you. Item 13, tabling of documents. Item 14, notices of motion. The honourable Member for Hay River South, Mrs. Groenewegen.

Jane Groenewegen

Jane Groenewegen Hay River South

Thank you, Mr. Speaker. Mr. Speaker, I give notice that on Monday, October 6, I will move the following motion:

NOW THEREFORE I MOVE, seconded by the honourable Member for Hay River North, that the Government of the Northwest Territories immediately undertake the development of a strategy to secure a stable supply of rough diamonds of an economic size and shape for cutting and polishing and encompasses communities outside of Yellowknife to ensure distribution of direct and residual benefits as widely as possible and ensure that this strategy has adequate resources to provide assistance and support for communities wishing to participate in the secondary diamond industry. Thank you, Mr. Speaker.

The Speaker

The Speaker Tony Whitford

Thank you, Mrs. Groenewegen. Item 14, notices of motion. The honourable Member for North Slave, Mr. Lafferty.

Leon Lafferty North Slave

I give notice that on Monday, October 6, I will move the following motion:

NOW THEREFORE I MOVE, seconded by the honourable Member for Mackenzie Delta, that the Minister responsible for the Northwest Territories Power Corporation direct the corporation to resubmit their one-rate general rate application to the Northwest Territories Public Utilities Board so that meaningful discussion and consultation can take place amongst the people of the Northwest Territories. Thank you, Mr. Speaker.

The Speaker

The Speaker Tony Whitford

Thank you, Mr. Lafferty. Item 15, notices of motion. Item 16, notices of motion for first reading of bills. Item 17, motions. The honourable Member for Hay River South, Mrs. Groenewegen.

Jane Groenewegen

Jane Groenewegen Hay River South

Thank you, Mr. Speaker.

WHEREAS the Minister of Resources, Wildlife and Economic Development released a revised business incentive policy on August 15, 2003, and announced that it would take effect October 15, 2003;

AND WHEREAS Members have, on a number of occasions, advised the Minister of several concerns with the existing policy which are not addressed by the revised policy;

AND WHEREAS Members have repeatedly advised the Minister of their concerns with the revised policy which also have not been addressed;

AND WHEREAS members of the Northwest Territories business community have voiced concerns about the revised policy;

AND WHEREAS the agreement on internal trade grandfathers the existing policy and it is not certain that the revised policy will also be permitted under the agreement as a successor program, having similar objectives;

AND WHEREAS the Standing Committee on Accountability and Oversight has requested the implementation of the revised policy be delayed until the Minister has provided a cost-benefit analysis of the existing policy substantiating the need for revisions;

AND WHEREAS the Standing Committee on Accountability and Oversight has recommended that the existing policy could be properly re-evaluated in one year once a cost-benefit analysis has been completed;

AND WHEREAS the government has failed to provide Members with a cost-benefit analysis of the existing policy;

AND WHEREAS the Minister stated in the House on February 1, 2003, that the decision at that time was that the proposed changes would not proceed and that "we could probably leave this for the time being and introduce a registry to gauge what the costs are to have this policy in place;"

NOW THEREFORE I MOVE, seconded by the honourable Member for Frame Lake, that the Executive Council rescind the revised business incentive policy;

FURTHER that the Executive Council not introduce any further changes to the existing policy until it has provided at least one year of data substantiating the need for an intended effect of those changes;

AND FURTHERMORE recommends that the Executive Council of the 15th Legislative Assembly not consider any changes to the policy until this data is collected and reviewed in a substantive manner. Thank you, Mr. Speaker.

The Speaker

The Speaker Tony Whitford

Thank you, Mrs. Groenewegen. There is a motion on the floor. The motion is in order. To the motion. The honourable Member for Frame Lake, Mr. Dent.

Charles Dent

Charles Dent Frame Lake

Thank you, Mr. Speaker. Mr. Speaker, I would like to speak in favour of this motion. I'm hoping that Members will also support it. I'd like to go through my reasons for supporting the motion in the order presented in the motion.

Mr. Speaker, Members, including myself, have told the Minister a number of times of concerns about the existing policy that have not been addressed by the new policy. For instance, the issue of store fronting and the lack of adequate policing. We don't see those as being addressed in the new policy.

Store fronting; the new policy would limit the business incentive policy qualifications to companies that pay Northwest Territories taxes and operate from a bona fide place of business. There's no definition of what constitutes a bona fide place of business, so it makes it easier under the new policy for southern business to rent a little place and get around the spirit and intent of the business incentive policy. So this actually makes the new policy worse at stopping store fronting businesses than the existing policy.

Mr. Speaker, the revised policy also has been touted as something that improves access in the smaller communities. It's been suggested the changes will better serve small business. Mr. Speaker, from an examination of the policy this is flat out wrong. I can't figure out where this is coming from. I've gone through the proposed policy very carefully and discussed it with many people and there's no way that the new policy improves how the business incentive policy will support small business in the smaller communities.

Right now, Mr. Speaker, the new policy proposes a $1 million limit on contracts. This is something that's new. The Minister said that the business community asked for these limits. He still said that, Mr. Speaker, in August, in the backgrounder that came with the press release on August 15 that I tabled in the House yesterday. That's not backed up by what we heard from business associations and individual businesses in our communities. I challenge the Minister to table in this House transcripts that prove that position was widely taken at the consultation process that his department undertook on the business incentive policy, because I haven't been able to find one business that supports that change.

This limit actually causes a lot of problems for smaller business, especially in construction contracts, because what will happen on a $3 or $4 million contract is that the general contractor will use up the entire incentive on their own forces on that first $1 million. That leaves the general contractor with no reason to look at hiring any northern businesses if a southern one can do it cheaper. This, in fact, will hurt our small northern businesses that operate things like plumbing and heating or electrical companies. With this new system, all of the sub-contractors in a contract for $3 million or better could wind up being southern.

With this new policy, there has been a removal of the definition of northern supplier. This creates a loophole allowing the contractor to purchase materials anywhere and claim a bid adjustment for it. This certainly won't help the small businesses and the smaller communities get business when contracts are let in their region.

Mr. Speaker, as we've noted in the motion, the Agreement on Internal Trade grandfathers the existing policy. We're not certain that this isn't going to cause a problem. I know that Minister Antoine and I were both elected to this House at the time that the current policy was put in place; 1992. At the time, we were told that the purpose of the business incentive policy was to stimulate northern ownership of businesses. Why? Because somebody who owns a business in the North, when they make profits, those profits circulate again and again through the North, multiplying their impact. They don't filter down to a person who lives in the South. That purpose has been removed from the new policy. All that we say is that the business has to pay taxes in the North and that it has to hire Northerners. So we've removed one of the significant reasons for this policy being in place and once you change that, I think it calls into question whether or not the grandfathering under the agreement on internal trade would actually continue.

Mr. Speaker, the standing committee has asked for information numerous times on what the current business incentive policy costs. I think it's something we've heard often, even from a Member now on the Cabinet side, that you shouldn't make decisions unless you have blue-chip information. Yet, whenever we asked the Minister, what does the current policy cost? He says that they can't tell us. The government has no idea what the current policy costs. So our committee suggested that what we should do is perhaps collect that information. Let's find out what the business incentive policy is costing us per year. Let's see just exactly what it costs us and then maybe we can take a stab at assessing whether or not we get any value for the money that we're spending.

The Minister has also said that one of the reasons we're proceeding with this is that the business incentive policy might cost us too much. At the press conference, his deputy minister suggested that there might be a $10 million premium for it. Although the Minister has repeatedly told us that they have no idea what the actual premium is that's being paid, they were still floating numbers at the press conference. If he can't tell us how much it's costing us, how can they float those numbers publicly?

If we can't find out what this is costing us, how do we know that the changes from the current policy are actually going to fix what the Minister thinks is wrong with the policy right now? Until we know for sure what it's costing us or what we might be getting from it, there's no way of knowing whether we're going to fix that with these changes.

As I said, we had expected that we were going to see a year's worth of data presented to us and that we would then be able to hear from the Minister just exactly how we were going to be fixing the problem that would suddenly become apparent from the data that he collected. So, Mr. Speaker, in January, the committee sent the Minister a letter in which we very clearly stated that it was the position of the committee that no changes should be made to the business incentive policy at this time. In the absence of information on the costs and benefits of the policy to government, businesses, communities and residents, Members do not believe it is possible to know what the proposed changes would accomplish or even whether the policy should be continued at all.

Mr. Speaker, in February, when we were in Session, the Minister responded to a question from Mrs. Groenewegen asking what the government's intention was with the policy. We took his response to mean that the government was not going to proceed; that the government was listening to our advice; that we had achieved a consensus and that in the true sense of consensus that was going to be reflected in the government policy. I think, Mr. Speaker, that we should be able to take that sort of communication back and forth from the committees to the Ministers to set out what was going to happen. We should know that we can take a Minister at his word and it's going to be reflected in a policy that the Cabinet is going to back up.

Particularly in our system, Mr. Speaker, where we talk about having a consensus. When the Minister presented the reasons for changing the policy at the press conference and if you look at some of the back-up materials that were tabled yesterday you'll see that there's a certain assumption that the business incentive policy costs us extra money. Cabinet clearly thinks that it costs us money, because they waived the business incentive policy for the second phase of the North Slave Correctional Centre. What happened with those bids? All but one went to northern firms anyways. But the one that didn't was for electrical contracting and it didn't go because the northern bidder was high by $85,000, or five percent. Had we not waived the business incentive policy, the northern electrical supplier would have gotten the tender, would have done the job, would have paid ten residents of Yellowknife salaries amounting to about $600,000 which would have gotten this government back $6,000 in payroll taxes, it would have gotten this government approximately $50,000 in income taxes and it would have gotten this government six times whatever their family numbers were times $15,000 back in payments from the federal government in transfer payments.

An Hon. Member

Plus apprenticeship training.

Charles Dent

Charles Dent Frame Lake

You know, in that instance it certainly looks like we cut our nose off to spite our face.

---Interjection

Charles Dent

Charles Dent Frame Lake

We surely could have done a better job here. We would have gotten more jobs for more Northerners and had more revenues for this government had we not waived the business incentive policy. So I don't buy the arguments that the business incentive policy is costing us money and until we have accurate numbers on what it is costing us in raw dollars and until we can actually go through it and figure out what benefits we get, we have no idea whether or not we should be making any changes to the policy.

So, Mr. Speaker, I urge the Members to support this motion and I hope the government will do the right thing and take the time to collect accurate information for a proper assessment of whether the business incentive policy gets us value for money. Then and only then should we discuss change. If this policy change goes ahead right now, I'm sure that it will be a big issue in the upcoming election. I have no doubt that a clear majority of those elected will recognize the concerns of the business people in their constituency and the 15th Assembly will cause the program to revert to the way it is until they can study how it should be fixed. Rather than throwing this whole policy into the mixer two times in a matter of a few months, let's just stop the change now. Let's take the time to collect really valid information and make a sincere effort to assess that information so we have blue-chip information proving that any change we make will in fact improve the policy. Thank you, Mr. Speaker.

The Speaker

The Speaker Tony Whitford

Thank you, Mr. Dent. To the motion. The honourable Member for Hay River North, Mr. Delorey.

Paul Delorey

Paul Delorey Hay River North

Thank you, Mr. Speaker. Mr. Speaker, I as well would like to speak in favour of the motion and, Mr. Speaker, when I came for this Session to Yellowknife, I had my Member's statement on the business incentive policy as number one. But seeing as this is such an important issue and the Minister wasn't in the House I held back on it. Then I was going to make it today, but then I couldn't because there was a motion on the floor. So, I will make it, probably some of this will sound like a Member's statement.

The issue that we speak of, this business incentive policy; way back some years ago, the Minister introduced some changes to the business incentive policy and it goes right to the very heart of the business community in Hay River. The business incentive policy, of course, as it is so unaffectionately known, has been around for a long time. As you're aware, Mr. Speaker, quite some time ago Resources, Wildlife and Economic Development embarked on a public consultation process to review the business incentive policy. At that time, I was very much in favour of this review process. Policies and procedures that are put in place by this government should be reviewed from time to time to see if they are effective for the people that we serve.

Mr. Speaker, the department heard in Hay River that the general public also heard that the intent of the business incentive policy as an economic tool to promote, create and maintain jobs and opportunities in the North was being met. The concerns that were raised at that same time were companies that Resources, Wildlife and Economic Development should be better policing -- companies that were registered under the business incentive policy -- that the contract award process should be more transparent to the public.

Mr. Speaker, in the recent release of the new business incentive policy regulations what puzzles me the most in the review process that Resources, Wildlife and Economic Development embarked on was, were the results already preordained? Were the results of the new business incentive policy known to Resources, Wildlife and Economic Development prior to the public review process? It would appear very much so, Mr. Speaker, to me and to the business community because most of the concerns that were raised by the businesses in Hay River did not show up in the business incentive policy recommendations that came forward. Not one person at the meetings, Mr. Speaker, stated that the scope of the policy should exclude hospital boards and education authorities from using the business incentive policy to evaluate construction contracts or make purchases. Not one person stated that the business incentive policy thresholds be changed. It has left me to wonder where or from whom did the Minister hear this during the public review process?

Mr. Speaker, also in the business incentive policy there was a manufacturing component. Certainly the manufacturing community from Hay River didn't advocate for that component to be removed from the business incentive policy. Where did the Minister hear this from in the public review process?

Mr. Speaker, there is little in the revised business incentive policy that addresses the business community's concerns with store fronting. In fact, many businesses feel that the policy will see store fronting increase and that the changes are being made to meet their needs.

I would like to state, Mr. Speaker, that I'm very disturbed and somewhat angered that the Minister of Resources, Wildlife and Economic Development would implement revisions to an important policy like the business incentive policy that has far reaching ramifications to our large business sector without the consent of Members of this House. This flies in the face of one of the pillars of our legislature: Consensus government.

Mr. Speaker, in recent information sessions that were held by the department on the revisions to the business incentive policy in Hay River there were some good things that came out and they were addressed as being good things in the revision of the business incentive policy. I would hope that the Minister would take notice of about what was said about the good changes in the policy. One of the things that was very concerning to me during those information sessions was the fact that the staff that was doing the information session took down a whole bunch of concerns on a flipchart as if it was the very first time that they were hearing these concerns. The very same concerns that were brought up were brought up in the last session in this House when the Minister had stated that it was still open to changes and review, yet not one of the recommendations that was in place at that time have changed; not one thing. That was very concerning to me and to most of the people in the room, Mr. Speaker.

Also, Mr. Speaker, one of the issues that was brought up by the people doing the information session was the fact that people that were going to be administering the new BIP policy out in the field, were going to be trained properly to know how to address issues with the business community. In talking to some people out in the field there has been no training other than a letter gone to them saying these are the changes and this is what we want you to implement. In looking at that issue, I find it hard to imagine how you can address the issue of better policing of the business incentive policy. I don't believe, Mr. Speaker, that the people out in the field are anywhere close to being able to address the new business incentive policy. There has been no training going on other than the letter that went out saying these are the changes that we are going to make and this is what we are going to do. There is even a deadline put on to totally change the business registry and I think it is October 15, if I am not mistaken, that all business that are registered under the business incentive policy now, will be wiped out, totally wiped off the chart and only business that are registered, re-registered on the 15th, will be considered under the business incentive policy.

I hear of all kinds of implications and problems that people are having trying to get re-registered. One of the problems that was raised was what happens if a contract comes due on the 16th of October and we don't have all of these things ironed out yet or somebody has not been able to meet the re-registration process or have all the documentation in place, they may lose contracts, we don't know that. So, Mr. Speaker, I am hoping that the Minister will do the right thing and give this the time and consideration that it needs to the public and take some of the recommendations that are coming out that are good. We don't have to make all kinds of substantial changes. If we know there are some good ones that everyone supports, why don't we make some small changes to the business incentive policy? I am hoping that the Minister will do the right thing and rescind this policy until we have had better time to look at it. Thank you, Mr. Speaker.

The Speaker

The Speaker Tony Whitford

Thank you, Mr. Delorey. To the motion, the honourable Member for North Slave, Mr. Lafferty.

Leon Lafferty North Slave

Thank you, Mr. Speaker. I also stand today to support the motion. Some of the reasons are not the same reasons as my colleagues, some are similar. In the year 2000-2001, I stood up in the House here and I made a statement saying that the BIP doesn't work, it is costing this government too much money. I mentioned that we can build five houses for the price of four. If we didn't use the BIP, we could have better housing programs out there, affordable housing, we can really call it affordable then instead of paying the high costs that there is right now.

We have been paying for supplies through the years because of the BIP for social programs. A good example is education, health, these are for supplies and services. Those are the areas that need to be looked at and this BIP, which were not looked at. We need to look at those areas. It was already brought up before the House, it's on paper, it was totally ignored and there are so many things that should have been done but were not done by the department. Just standing up here and have everybody repeating it is just not going to do it.

What I want to say is that I support the motion and that the department should be looking at everything over again, take another run at consultations with the business community and the people that are going to be affected, the people in the communities, the public that is out there that are going to be paying for the higher cost of living in the North. Mr. Speaker, I say I support the motion.

The Speaker

The Speaker Tony Whitford

Thank you, Mr. Lafferty. To the motion. The honourable Member for Yellowknife South, Mr. Bell.

Brendan Bell

Brendan Bell Yellowknife South

Thank you, Mr. Speaker. Like my colleagues today, I will support the motion and rise today to speak to that, but I won't stand here and reiterate all of the concerns that my colleagues have so ably raised already. I will point to a couple of things that particularly have distressed me.

The process -- and I have raised a number of concerns about the process in the House -- that was undertaken by RWED and looking at the revisions, there were a number of times that consultations were done and it was made very clear that they were only information sessions, not consultations. I know the people who were present at a number of these meetings and have talked to me about this, felt that their input really wasn't being considered, really wasn't being valued and that they were simply being advised of something that was coming down the pipe and there was nothing they could do to get out of the way.

There were a number of arguments also made about some of the particularly controversial aspects of the revisions. I will say that there are some things that generally seem to have good support. I don't think anybody would argue, it seems to make sense to ask people to file taxes in the Northwest Territories if they are going to receive this benefit, but some of the other ones, for instance, the thresholds. If we accept the argument that the thresholds were based on the need to comply with the agreement on internal trade, and that was the point put to us, Mr. Speaker, at the technical briefings and if we accept that, Mr. Speaker, it raises a lot of questions. I know that the department indicated we have a reporting requirement under the AIT to lay out the amount of contracts that we have over and above and under certain cutoffs but, Mr. Speaker, reporting requirement is simply not the same thing as suggesting that we have to implement new thresholds and can't have the BIP applied to an amount over that, and that is simply not the same thing.

Mr. Speaker, another provision that causes a lot of problems, and I think Members are certainly getting a lot of feedback on this, are the audit requirements. I am not sure and I think departments are now slowly aware of this, but the audit requirements, much of them, of this requirement will be hoisted onto departments because RWED has clearly laid out the case that they believe a number of the concerns become contract administration concerns and not BIP concerns. I think for us to fully understand these implications, we have to look at something like the northern labour premium that would be applied to contracts. We question why this premium wouldn't be at the back end of a contract. After a contractor has demonstrated they had used northern labour and can prove it, then we will give them the premium. RWED is insisting on a model that pays the premium up front but the audit requirement will be on the department administering the contract.

Mr. Speaker, I have talked to a number of people in departments who have said that they just don't have the capability of being able to do this on any kind of a consistent basis. So I think we are kidding ourselves to think that we will have an effective audit requirement in place in 10 or 11 or 12 or 13 short days from now. Mr. Speaker, it simply is not realistic. I think Members have really laid out a number of concerns that they have throughout the whole process, and we thought we had an agreement from the Minister to analyze the situation and get us some data after a year of tracking this and that is why we agreed to support the Minister going forward with the contract administration portion of the policy. It seemed to make sense to us that if you are going to collect this data, that is certainly not something we want to stop because we'd like to have an informed discussion about the business incentive policy and what the current policy does cost us. Mr. Dent laid this out and we wrote a letter to the Minister saying for all we know, we don't even need a BIP anymore, but how do we know? Without analyzing the data, without hearing from the department, admittedly, the department acknowledges that they don't know what it costs and we can't have an informed discussion about what we have in place and what makes sense.

So, Mr. Speaker, with all of these questions out there, I don't think that we can allow these changes to go forward as the department has proposed. The department might be right, it might be wrong, it might be partially right or wrong, none of us knows and I think that is a dangerous way to conduct ourselves. In the Minister's commitment in the House in the past and now a seeming reversal on that, but I am sure technically he can find a way to walk through that commitment and indicate that at the time he made those statements they were accurate, and I am sure they were, but I think that he knows that we believe the spirit of his comments are not being adhered to now and that is certainly concerning, especially when there are so many people out there looking to poke holes in our consensus system and talk about the death now of consensus government. These are the kinds of things that further back that up and that really concerns me. I think we have a very effective system, but it's only as effective as the players who are involved in this House. I think we owe it to ourselves, as stewards of the consensus system, to treat each other with more respect and dignity and adhere to the true spirit of consensus, and we aren't doing that in this case, Mr. Speaker. Thank you.

---Applause