Mr. Speaker, I am in receipt of a reply to a written question asked by Mr. Hawkins on March 17, 2004, to the Premier with respect to the Territorial Business Incentive Policy Application.
Mr. Speaker, I have a return to written question asked by Mr. Hawkins on March 17, 2004, regarding the territorial business incentive policy application.
The intent of the business incentive policy is to support the development and growth of NWT businesses. This is chiefly accomplished through the application of northern and local preference adjustments that allow NWT businesses to successfully compete against southern companies for Government of the Northwest Territories contracts and tenders.
The preference adjustments attempt to compensate for the possibility that large southern companies with lower operating costs and better economies of scale may be better positioned to outbid smaller NWT companies with comparatively higher operating costs for GNWT business. At times, this may result in the GNWT paying more for a contract than they m ay have if it had been awarded to a competing southern firm. In most instances, the objective of supporting NWT businesses overrides the objective of obtaining goods and services at the lowest possible cost to the GNWT.
In some instances however, the objective of supporting NWT businesses may conflict with the objective of providing necessary programs and services to the people of the NWT at a reasonable cost. Where it is determined that the application of the business incentive policy will likely increase the costs for providing a program or service beyond what is reasonable, Ministers may recommend to the Executive Council that the business incentive policy be waived for the purposes of that particular program or service.
The business incentive policy specifically provides the Executive Council with the authority to make exceptions concerning the application of the policy to GNWT projects and purchases. Exemptions are granted on a case-by-case basis, based on the evidence presented by the individual Minister requesting the exemption. After carefully considering the merits of each case brought to it, the Executive Council may choose to grant exemptions from BIP for either individual contracts or for a group o f contracts related to the delivery of a specific program or service. As exemptions from BIP are rare and as each case is unique and requires consideration on its own merits, no written guidelines have been established in this area.