I think we might have more discussion about whether this should be part of our policy coming forward. Later in the Minister's statement he sings the praises of P3s, and I would like to know: he talks about how the Mackenzie Valley fibre link is an effective way of delivering large strategic infrastructure projects that are essential for the NWT, so is there some sort of an evaluation framework or criteria for success for the Mackenzie Valley fibre link?

The Mackenzie Valley fibre link is the very first one the Government of the Northwest Territories took on, and I think that, when you look at it and the challenges that were around that whole project, and I think the Finance Minister will concur with me, it definitely buffers the Government of the Northwest Territories. P3s are on the back of industry going forward, and they face the challenges, and they take the risks, and they do this, and it gives us some assurance to the Government of the Northwest Territories that, when we enter into these contracts, we are going to get what we paid for.

Masi. Oral questions. Member for Frame Lake.

Merci, Monsieur le President. Thanks to the Minister for the talk about buffering. Let's talk about buffering of Internet services for the small communities where various Ministers promised that there was going to be enhanced internet services for small communities. It just has not happened, so can the Minister tell me: what are the specific arrangements for internet service improvement in the small communities that were promised as part of the Mackenzie Valley fibre link, and who's going to provide those services?

As per the conversation yesterday with the Minister of Finance, he is in charge of the fibre line, but, as maybe the Member is not quite aware of, the table that I am responsible for with Minister Bains is that we have allocated money, or the federal government has allocated money through our discussions, to support rural communities with infrastructure to have Internet across Canada; 50 up, 10 down. That's the federal government's responsibility. They're working on that. They've allocated, I believe, some money to do that in the North in rural and remote communities. As the Finance Minister said yesterday, our responsibility is the line, and maybe bring it as far as the communities, particularly for our own use, but we are not in the business of supplying Internet. The Member didn't even like when we bought MTS, so we don't want to be an Internet provider. We'll let the private businesses handle that, but our table for sure with Minister Bains is well aware of this situation across Canada.

A lot of people don't even realize that a lot of rural and remote communities in northern provinces don't have any Internet, and the challenges that they have, similar to what Nunavut has. Every one of our communities does have Internet, but what we're trying to do as a table with the FPT table is bring 50 up, 10 down for everybody. Thank you, Mr. Speaker.

Masi. Oral questions. Item 8, written questions. Item 9, returns to written questions. Item 10, replies to the Commissioner's opening address. Item 11, Petitions. Item 12, reports of standing and special committees. Member for Yellowknife North.

Thank you, Mr. Speaker. Your Standing Committee on Economic Development and Environment is pleased to provide its report on Bill 25: An Act to Amend the Workers' Compensation Act. Mr. Speaker, I move, seconded by the honourable Member for Sahtu, that Committee Report 28-18(3): Standing Committee on Economic Development and Environment Report on the Review of Bill 25: An Act to Amend the Workers' Compensation Act be deemed read and printed into Hansard in its entirety. Thank you, Mr. Speaker.

Masi. The motion is in order. The motion is non-debatable. All those in favour? All those opposed? Motion carried.

---Carried

Committee Report 28-18(3): Standing Committee on Economic Development and Environment Report on the Review of Bill 25: An Act to Amend the Workers' Compensation Act is now deemed read and is to be printed into Hansard in its entirety.

Introduction

The Standing Committee on Economic Development and Environment ("the committee") is pleased to report on its review of Bill 25: An Act to Amend the Workers' Compensation Act.

Bill 25: An Act to Amend the Workers' Compensation Act, sponsored by the Honourable Alfred Moses, Minister Responsible for the Workers' Safety and Compensation Commission (WSCC), was given second reading in the Legislative Assembly and referred to the Standing Committee on Economic Development and Environment for review on October 26, 2018. For reasons that will be addressed, committee requested an extension to the 120-day review period provided for in the Rules of the Legislative Assembly. Committee thanks the Legislative Assembly for approving this extension, which was granted on February 26, 2019.

Bill 25 proposes to amend the Workers' Compensation Act to:

• Clarify the usage of the terms "impairment" and "disability";
• Add detail respecting who is considered an "employer" within the scope of the act;
• Remove the requirement for a primary healthcare provider;
• Add unemployment benefits as a category of remuneration;
• Authorize the provision of workers' records by healthcare provider to WSCC;
• Authorize information sharing and disclosure for the purpose of improving administration of the act;
• Enable an inspector to inspect healthcare providers' records to verify services received;
• Reduce the time period for filing a review of a commission decision to the review committee or to file a request for an appeal to the Appeals Tribunal; and
• Correct inconsistencies and errors identified in the act.

Background

The Workers' Compensation and Safety Commission is a single corporation providing services to workers in both Nunavut and the Northwest Territories. The multi-jurisdictional nature of the WSCC arises because it predates the division of the Northwest Territories in 1999, when Nunavut was created. At that time, the territorial legislation in place governing the entire Northwest Territories was duplicated, or mirrored, in the new Nunavut legislature in much the same fashion that federal legislation was later duplicated in the Northwest Territories legislature when devolution of responsibility for Crown lands and resources from the federal government to the took place in 2014. This approach has resulted in the WSCC, a single corporate body conducting business in both jurisdictions, being governed by two distinct statutes in two separate jurisdictions.

This situation poses unique challenges with respect to the development and review of Bill 25. In order to ensure that the WSCC can operate in an efficient and effective manner, it is necessary for the two sovereign legislatures to simultaneously consider amendments to two separate, but virtually identical, pieces of legislation. At the same time that the Standing Committee on Economic Development and Environment has been considering Bill 25, the Standing Committee on Legislation of the Legislative Assembly of Nunavut has, therefore, been considering Bill 1. This has necessitated a high degree of collaboration between both legislatures, and both Ministers responsible, to ensure that the initial draft of the bill, and any subsequent amendments made at the committee stage, are coordinated.

While these circumstances are unusual, they are not without precedent. In fact, Nunavut and the Northwest Territories each previously considered coordinated amendments to its own Workers' Compensation Act 2007. In 2015, each jurisdiction passed a Northern Employees Benefits Services Pension Plan Act to govern the Northern Employee Benefits Services, a single, member owned, not-for-profit corporation sponsoring an insurance and healthcare benefits plan, and a pension plan, for certain public sector employees in both Nunavut and the Northwest Territories. More recently, as this Assembly passed Bill 7, Chartered Professional Accountants Act, Nunavut passed Bill 2. These near-identical statutes provide for a newly merged body, the Chartered Professional Accountants of Northwest Territories/Nunavut, to regulate the accounting industry in both territories.

The challenges presented by amending mirrored legislation are not the only challenges presented by this review. In 2014, this Legislative Assembly passed the Health Information Act, governing the collection, retention, and disclosure of health information belonging to NWT residents. Bill 25 deals with the handling of workers' medical information, yet Nunavut does not have legislation similar to our Health Information Act. This need to craft amendments that give consideration to the different protections for medical data and records in each jurisdiction has also been a feature of committee's review.

The general complexity of the Workers' Compensation Act, an unusually busy legislative workload and the high degree of collaboration required between Nunavut and the Northwest Territories, to facilitate concurrent reviews of Bills 8 and 25, are the reasons committee sought an extension to the time period allowed for the review of this bill.

Committee would like to take this opportunity to thank Mr. John Main, Chair of the Standing Committee on Legislation of the Nunavut Legislative Assembly, his colleagues, and staff for their collaborative spirit and forthright communication, which made this review possible.

Committee thanks Minister Moses and his staff for their collaboration and for their prompt responses to committee's questions. Committee also thanks the Minister for his concurrence with amendments to the bill that were proposed by committee.

The Public Review of Bill 25

As always, committee commenced its review by inviting input from stakeholders across the Northwest Territories, including municipal and Indigenous governments, and a number of non-governmental organizations. Committee held a public hearing on Bill 25 in Yellowknife on February 12, 2019.

Committee received written submissions from: the Information and Privacy Commissioner for the Northwest Territories (IPC); Thomas ADR, a small business operating in the Northwest Territories; and the NWT and Nunavut Chamber of Mines. These written submissions are appended to this report.

Committee thanks everyone who provided submissions on Bill 25.

Public Input and Committee Recommendations

As noted in the introduction, Bill 25 proposes to amend the Workers' Compensation Act to achieve a number of objectives. The key objectives will be addressed in turn, identifying any public input received, and outlining the nature of Committee's deliberations and proposed motions to amend the bill.

Clarify the usage of the terms "impairment" and "disability"

Under the Workers' Compensation Act, temporary compensation is paid based on the effect of a worker's injury on their ability to work, whereas permanent compensation is paid based on a permanent loss of function. The definition of "disability" under the act does not account for the differences between a temporary reduction of function versus a permanent one, leading to confusion for workers and employers, and challenges with interpretation of the act.

Bill 25 proposes to amend the definition of "disability" to mean "the condition of having temporarily reduced physical, functional, mental or psychological abilities" causing a loss of earning capacity for a period of time. It also proposes to introduce a definition for the term "impairment" which is defined as "the condition of having a permanent physical, functional, mental or psychological abnormality or loss" causing a permanent loss of earning capacity.

Committee found the WSCC's definitions to be somewhat counterintuitive, in that the word "impairment" is commonly viewed as being a temporary condition, such as in the case of alcohol impairment, while "disability" is commonly viewed as a lifelong condition. Nonetheless, committee was satisfied not to recommend a change to these proposed definitions, because they are used consistently throughout the act and do help to simplify the meaning of provisions in the act by deleting terms such as "permanent disability," as amended by clause 2(5).

Add detail respecting who is considered an "employer" within the scope of the act

It is important that the Workers' Compensation Act contain a clear definition as to who is considered an employer under the act, as this determines an employer's eligibility and obligations under the act and, hence, an employee's coverage. Clause 4 of Bill 25 amends section 8 of the act by providing a list of exemptions setting out who is not considered an employer for the purposes of the act, including: employers whose chief place of business is in another jurisdiction; employers who do not employ NWT residents; employers carrying out business in the NWT for fewer than ten days per year and; employers having workers' compensation coverage in another jurisdiction.

Committee received a submission from Thomas ADR raising a concern that the proposed amendment would expand the commission's jurisdiction to include sole proprietors. The proprietor's concern was heightened by a statement on the WSCC's website which reads: "If you operate a business in the Northwest Territories and/or Nunavut for more than 10 days within a calendar year, you must register with the WSCC."

Committee's Law Clerk advised that clause 4 of Bill 25 was not intended to include sole proprietors. Nonetheless, committee, exercising an abundance of caution, also wrote to the Minister to ensure government's interpretation was consistent with that of Committee's Law Clerk and to advise the Minister of the concern raised about the statement on the WSCC's website.

The Minister replied, confirming the understanding of committee's law clerk, but also noting that the concern raised about the website is valid and advising that the WSCC would be amending this information to provide clarification on the requirements for employer registration.

Remove the requirement for a primary healthcare provider

With respect to the development of a treatment plan for an injured or ill worker, subsection 33(2) of the act requires the worker to have a primary healthcare provider to take responsibility for diagnosing the worker's condition and developing a treatment plan. Bill 25 proposes to repeal this requirement, out of a recognition that the realities of territorial medical services are such that many patients do not have a primary healthcare physician.

The submission received from the NWT and Nunavut Chamber of Mines supports this proposal, noting that "this requirement was longstanding issue for workers as often it is difficult in the north to see the same doctor on a consistent basis, let alone have a 'primary healthcare provider.' This amendment will make life easier for injured workers to have their claims adjudicated."

Committee agrees that this requirement is unduly onerous and may be difficult for an injured worker in the Northwest Territories to meet, and therefore supports its removal from the act.

Add unemployment benefits as a category of remuneration

Section 57 of the act sets out what must be included when determining the amount of a worker's remuneration which, in turn, forms the basis for assessing the amount of compensation an injured or ill worker may receive. Clause 30 proposes to amend this provision in the act to include employment insurance benefits in the calculation of a worker's remuneration. Committee was advised that, by excluding employment insurance benefits in determining the amount of a worker's remuneration, the Northwest Territories Human Rights Commission found this provision to be discriminatory, particularly for seasonal workers whose social conditions require intermittent work. This decision was later affirmed by the Northwest Territories Court of Appeal, which prompted this proposed amendment.

Committee notes the submission from the NWT and Nunavut Chamber of Mines indicating that this is a potentially controversial proposal because it will result in "more compensation for workers, but higher costs paid by employers." Nonetheless, committee acknowledges the findings of the Northwest Territories Human Right Commission and Court of Appeal and has no concerns with this proposal.

Authorize the provision of workers' records by healthcare provider to WSCC (Clause 14)

Section 25 of the act requires a healthcare provider to submit a report to the WSCC, within three days after treatment, providing the information required by the WSCC. Clause 14 of Bill 25 amends section 25 of the act by adding a new subsection 25(1.1) requiring any healthcare provider who examines or treats worker under the act to "submit records to the commission in relation to medical aid received by the worker sufficient to enable the commission to comply with its obligations under subsection 34(3)" of the act.

In her submission to the committee, the Information and Privacy Commissioner pointed out that "this would require healthcare providers to make a worker's actual treatment records available to the commission, as opposed to providing reports about treatment, resulting in the commission possessing more, and more detailed, healthcare information of individual workers."

Committee observed that this amendment does not include any requirements relating to consent by the worker whose health records are being shared.

Committee also noted that, while section 161 of the Workers' Compensation Act imposes a duty of confidentiality on the WSCC, section 162 of the act provides that "[t]he provisions of [the Workers' Compensation] Act respecting the provision of information by or to the commission have effect notwithstanding the Access to Information and Protection of Privacy (ATIPP) Act and the Health Information Act." This makes the Workers' Compensation Act paramount over ATIPP and the Health Information Act, rendering the protections provided by those statutes subordinate to the requirements of the Workers' Compensation Act.

Committee shares the IPC's concerns, particularly in light of this paramountcy provision. Furthermore, committee does not accept the WSCC's position that the scope of the amendment is not overly broad and that it would not jeopardize the confidentiality of claimants' personal health records. Some committee members also sit on the Standing Committee on Government Operations, which meets annually with the IPC. From these meetings, Members are aware that any time a record is handled or transmitted there is an increased likelihood of privacy breaches. Committee is also concerned that the impact of this provision, in concert with the proposal to allow the WSCC to share information with other agencies under clause 33, could further broaden the potential for privacy breaches.

Committee determined that it does not support the inclusion of clause 14 in the bill.

Authorize information sharing and disclosure for the purpose of improving administration of the act (Clause 33)

Section 95 of the Workers' Compensation Act authorizes the WSCC to enter into information-sharing agreements with public bodies responsible for workers' safety and compensation in other jurisdictions for the purpose of ensuring regimes are efficiently administered in all jurisdictions and that eligible claimants are dealt with the by appropriate jurisdiction.

Clause 33 of Bill 25 proposes to repeal and replace this with a broader authority allowing the WSCC to enter into agreements with the Government of Canada, a government of a province or territory of Canada, an Indigenous government, or with a ministry, board, commission, or agency of such a government, for the purpose of ensuring the proper administration of this act and any other legislation administered by the commission. Clause 33 further provides that the other government, ministry, board, commission, or agency may be permitted to access information obtained by the WSCC under this act and vice versa.

As previously noted, committee was concerned about the impact of this provision, especially given the proposal under clause 14 requiring healthcare providers to share actual medical records with the WSCC. Committee also notes the concern raised by the NWT and Nunavut Chamber of Mines indicating that "in the past such sharing had to be justified using access to information legislation."

Nunavut was also concerned about this clause, especially given the fact that, unlike the Northwest Territories, they do not have any legislation providing protections for health information. Nunavut's Standing Committee on Legislation therefore asked the Standing Committee on Economic Development and Environment to move a motion to amend Bill 25 to prevent other governments or outside agencies from having direct access to the WSCC's databases.

Committee agreed to move this motion.

Reduce the time period for filing a review of a Commission decision to the Review Committee or for filing a request for an appeal to the Appeals Tribunal (Clause 34)

Committee considered two sections of the act that Bill 25 proposes to amend to reduce the time for a worker to file an appeal. Section 115 of the Workers' Compensation Act provides that a "request for a review of a decision of the Commission must be made within three years after the day of the decision, unless the Review Committee considers that there is a justifiable reason for the delay and allows an extension." Subsection 128(2) provides that "[n]o appeal may be taken to the Appeals Tribunal more than three years after the day of the Review Committee's decision, unless the Appeals Tribunal considers that there is a justifiable reason for the delay and allows an extension." Clause 34 of Bill 25 proposes to amend each of these provisions to reduce the window for an appeal from three years to two years.

The WSCC's rationale for this amendment is that two years is the standard civil limitation period under section 2 of the Limitation of Actions Act and that this amendment will help to reduce the overall liability resulting from decision reversals. Even while recognizing that the review committee and Appeals Tribunal have the authority to grant extensions for justifiable delays, committee is not persuaded by this rationale.

Based on numbers provided by the commission for the period 2016 to 2019, had the limitation been two years rather than three, the number of reviews before the review committee that would have been denied doubled from 5 to 10 reviews, and the number of appeals before the Appeal Tribunal that would have been denied doubled from 2 to 4 appeals. In committee's view, while this clearly works to the advantage of the WSCC by minimizing the impact of appeals on the Workers' Protection Fund, it does not evidence any advantage for workers.

Committee holds the view that, in the Northwest Territories, where literacy rates are low, those in smaller communities may have difficulty accessing the supports necessary to launch a review or appeal. As well, a significant component of the population is impacted by social problems and the legacy of residential schools. In this context, it is even more important that careful consideration be given to reducing limitations on the time available to people to exercise their rights.

Committee determined that it does not support the inclusion of Clause 34 in the bill.

Enable an inspector to inspect healthcare providers' records to verify services received (Clause 35)

Lastly, clause 35 of Bill 25 proposes to amend section 134(2) of the Workers' Compensation Act to enable the commission to enter any healthcare facility to inspect and audit any records, with the intent of verifying that claimants have received services related to their claims.

Committee understands that the purpose of this amendment is to enable the WSCC to undertake site audits to obtain a greater degree of information about the compliance of those providing medical services as compared with the claims made by workers about services obtained. Committee asked for evidence about the incidences of medical fraud that have occurred in the past and the costs incurred by the commission due to fraud. The WSCC advised that it does not have any such statistics, pointing out that having this information would be useful for compliance and for quality assurance purposes.

Despite the absence of evidence, committee recognizes that the potential exists for medical fraud to take place, which is a drain on resources for those who legitimately need help. Therefore, committee is sympathetic to the desire of the WSCC to detect and prevent fraud, thereby protecting the Workers' Protection Fund. However, committee was also deeply concerned that this amendment, as written in the bill, provides the WSCC with a very broad authority, perhaps broader than is needed, to access actual patient medical records which may contain highly personal details.

Committee was aware that there are provisions in the Health Information Act allowing patients to prevent access to their medical records without their consent and investigated whether this power could be invoked by a patient to limit the authority proposed to be granted to the WSCC under clause 35. Committee learned that paragraph 22(2)(b)(i) of the Health Information Act states that "[a] condition placed by an individual on his or her consent to the collection, use or disclosure of personal health information...is not effective to the extent that it purports to limit collection, use or disclosure that is required by this or another Act." Therefore, an individual cannot use their right to withhold consent to the disclosure of their personal medical records as a means for limiting the disclosure of their personal health information to the WSCC.

Committee determined that it does not support clause 35 as drafted in the bill. Committee notes that in several of the other bills it is reviewing right now, the right of inspection is constrained by the requirement to obtain a warrant in many instances. Given that fraud is a criminal matter, committee felt that, if fraud is suspected, then the WSCC should use the tools available under criminal law, including the ability to secure a warrant for medical records in instances where there is just cause to do so.

Committee discussed this matter with the WSCC, in an effort to come to some agreement about an appropriate motion to amend clause 35. The WSCC explained that its need for this power under the act is solely to enable it to carry out an audit function relating to accounting and transactional records, and that it has no need for access to patients' personal medical records. Committee and the Minister agreed to a motion that would place constraints on the records that may be accessed by an inspector under this section to scheduled appointments for treatments and services and accounting records related to those appointments.

It was further determined, as a result of these discussions, that the motion should specify the difference between audits for the purposes of detecting fraud, and the audits carried out by the WSCC in fulfilling its responsibility to inspect workplaces to assure that an employer, such as a health facility, is providing a safe workplace meeting occupational health and safety standards.

Committee is pleased that agreement could be reached on this additional amendment to clause 35 and feels that its work with the Minister and the WSCC in this instance is an excellent example of how collaboration between Cabinet and Standing Committees can result in better legislation, to the benefit of all.

Clause-by-Clause Review of the Bill

The clause-by-clause review of Bill 25 was held on August 9, 2019. Appendix 1 sets out the amendments that that committee made to Bill 25.

Conclusion

During the clause-by-clause review of Bill 25, Minister Moses noted his need to share the substance of the committee's deliberations with his counterpart in Nunavut. Committee wishes to assure the Minister and this House that all of the amendments committee made to Bill 25 were done with the full knowledge of Nunavut's Standing Committee on Legislation. Committee understands that Nunavut will be concluding its review of its Bill 8 when the Nunavut Legislative Assembly reconvenes in October.

Committee again thanks everyone involved in the review of Bill 25. This concludes committee's review.

Masi. Reports of standing and special committees. Member for Yellowknife North.

Thank you, Mr. Speaker. I move, seconded by the honourable Member for Sahtu, that Committee Report 28-18(3): Standing Committee on Economic Development and Environment Report on Bill 25: An Act to Amend the Workers' Compensation Act be received by this Assembly and moved into Committee of the Whole for further consideration. Thank you, Mr. Speaker.

Masi. The motion is in order. The motion is non-debatable. All those in favour? All those opposed?

---Carried

Standing Committee on Economic Development and Environment Report on Bill 25 is now moved to Committee of the Whole for further consideration. Reports of standing and special committee. Member for Yellowknife North.

Thank you, Mr. Speaker. I seek unanimous consent to waive rule 100(4) and to have Committee Report 28-18(3), Standing Committee on Economic Development and Environment Report on the Review of Bill 25: An Act to Amend the Workers' Compensation Act moved into Committee of the Whole for consideration later today. Thank you, Mr. Speaker.

Masi. The Member is seeking unanimous consent to waive rule 100(4) to have Committee Report 28-18(3), Report on Bill 25, moved into Committee of the Whole for consideration later today.

---Unanimous consent granted

Committee Report 28-18(3), Bill 25, is now moved into Committee of the Whole for consideration later today. Reports of standing and special committees. Member for Frame Lake.

Merci, Monsieur le President. I seek --

Before that, Member for Yellowknife North, sorry.

Thank you, Mr. Speaker. Your Standing Committee on Economic Development and Environment is pleased to provide its Report on the Perception Held by Northern Businesses Toward the Government of the Northwest Territories Procurement Processes.

Executive Summary

The Standing Committee of Economic Development and Environment is pleased to present this report as a contribution to the building and strengthening of a professional public procurement system.

Based on the concerns heard from Northwest Territories (NWT) business owners and operators, committee undertook a confidential survey asking businesses for their opinion and input on various types of procurement. Committee received responses from businesses of all sizes, representing a wide variety of industry sectors from the Beaufort Delta, North Slave, and South Slave regions of the NWT.

Presented in this report are findings and key recommendations from submissions made by 19 companies over a three-week period during August 2018. Ensuring that respondents and their answers remain confidential, feedback has been combined and analysed to produce a clear synopsis of what businesses said about the Government of the Northwest Territories' sourcing and procurement systems. The issues and recommendations made by companies are presented in this report.

The survey results indicate that the current government procurement system would benefit from several improvements to meet the goal of strengthening businesses in the territories.

Conflicting policies and practices are key concerns of business. The Business Incentive Policy is the government's policy applying to procurement contracts entered into directly with the government. The purpose of this policy is to encourage and support the development of a healthy private sector and to ensure, particularly in the smaller communities, that NWT businesses can be competitive with their southern counterparts.

Businesses note that the government's "lowest bid" rule and standing offer agreements may conflict with the intent of the Business Incentive Policy, which is to increase benefit to NWT companies.

Many comments received to the survey question whether the "low-bid criteria' is the appropriate criteria to be used by government to find the "best" bidder. The lowest bidder may not necessarily provide assurance that the project will be completed on time, and it may mean that additional contract amendments, and extra funds, may be required at a later stage in the project.

Collaboration between government and vendors is another key concern of business. Multiple local businesses felt disadvantaged in the competition for contracts with government, because they saw a limited understanding of the unique situation of northern businesses reflected in the government's invitations to tender. Businesses recommend that government communicate with northern companies during the planning stages of procurement to ensure that project specifications, requirements, and schedules consider the northern context in which businesses operate in the Northwest Territories.

Committee received considerable feedback to questions on different types of procurement and a large number of recommendations. The responses show that NWT business concerns are focused on four key themes.

Theme 1: Increase consistency, clarity and transparency in the procurement system

Businesses indicate they have a good understanding of the tendering processes; however, their experience with government and their perception of quality of services varies greatly. Most vendors comment on issues with consistency of service, and clarity and transparency of the process. Businesses recommend that government:

• Increase clarity of information on the e-procurement process;
• Improve reliability of procurement system and online services;
• Ensure procurement authorities are experienced, knowledgeable and have appropriate training;
• Design for a third-party monitor, if preferable a non-government employee;
• Provide annual reports on all tender activities; and
• Conduct a third-party review of all sole source contracts on a three-year basis.

Theme 2: Attract local vendors more effectively

Businesses comment that, while the government seems willing to support NWT-based businesses, the existing tools do not achieve this goal. Several companies express that they do not receive enough support to be able to compete successfully against larger out-of-territory companies. Smaller businesses indicate they are in a disadvantaged position to compete with larger companies. Businesses recommend that government:

• Include northern hire requirements into request for proposals and Public-Private Partnership agreements and contracts;
• Allow businesses to know about opportunities under $25,000;
• Divide large projects into smaller projects and RFPs to enable smaller companies to compete; and
• Allow northern companies to compete by applying additional solutions, such as changes to the list of prerequisites, or for southern firms to have proof of joint venture agreements with northern firms.

Theme 3: Understand NWT business capabilities better

Businesses ask to increase communication between government and vendors and to provide opportunity for collaboration between northern industry and government. Businesses recommend that government:

• Develop requests for proposals that reflect the project size;
• Work with northern companies to know what northern business have to offer, before searching the Internet for products;
• Encourage procurement officers to work closer with northern industry, obtain input from suppliers or other stakeholders when preparing tenders, and set more realistic timeframes for vendor responses; and
• Ensure that Standing Offer Agreement practices align with the intent of the Business Incentive Policy.

Theme 4: Integrate mechanisms and services to contribute to the successful delivery of the contract

Businesses expressed concern about the government's departmental contract alignment, in particular when it is about updates to technical and sector-specific information and payment. Businesses recommend that government:

• Offer to staff continued education of government policies relevant to procurement, such as the Business Incentive Policy and the Manufacturing Policy; and
• Ensure for integration between departments to ensure timely payment of vendors.

Committee heard many concerns about the future of the NWT economy. A possible lack of future opportunities for government tender is believed to result in negative impacts on the health of the NWT companies. With the GNWT being the largest supplier of contracts in the territory, businesses expressed the desire for government to schedule tender releases in such a way that a steady stream of procurement is made available to NWT businesses. It will be important for GNWT to consider systematic approaches to avoid boom and bust cycles in any of the territories sectors.

Committee believes that the concerns raised by business may indicate the increasing risk of an uncertain business environment in the NWT. Therefore, committee impresses on the Government of the Northwest Territories to adopt an active, forward-looking, and a collaborative approach to public procurement.

Committee members suggest that the Department of Infrastructure verify with vendors, clients and other stakeholders the successful implementation of the new e-procurement system to enable alignment with recently developed policy directives, ongoing departmental restructuring initiatives, and changes in administrative and technological applications. Committee is of the view that a more comprehensive approach is required. Accordingly, committee makes the following recommendations:

Recommendation 1:

The Standing Committee on Economic Development and Environment recommends that the GNWT establish a procurement advisory panel composed of members of industry, small business, procurement experts, and members of the public service. This panel should be guided by a clear terms of reference setting out the panel's role in providing regular advice to the government on how to improve procurement processes.

Recommendation 2:

The Standing Committee on Economic Development and Environment recommends that the GNWT undertake a comprehensive public review of all procurement-related policies with the explicit direction to modernize government procurement processes, and to ensure that NWT businesses can benefit; and a healthy private sector is developed in the NWT taking into consideration concerns and issues raised in this report, along with the committee's recommendation.

Members of the committee would like to thank all who participated in the survey, for sharing their experiences and providing substantial recommendations. Thank you, Mr. Speaker.

Masi. Reports of Standing and Special Committees. Member for Yellowknife North.

Thank you, Mr. Speaker. I move, seconded by the Honourable Member for Sahtu, that Committee Report 29-18(3) be deemed read and printed in Hansard in its entirety. Thank you, Mr. Speaker.

Masi. The motion is in order. The motion is non-debatable. All those in favour? All those opposed?

---Carried

Committee Report 29-18(3) has now been deemed read and printed in Hansard in its entirety.

Introduction

The Standing Committee of Economic Development and Environment ("committee") is pleased to present this report as a contribution to building and strengthening a professional public procurement system.

Public procurement is the umbrella term embracing several business functions that involve acquiring goods, services, and construction on behalf of government. Processes of purchasing goods and services and selecting vendors for the government are laid out in the Government of the Northwest Territories (GNWT) Business Incentive Policy (BIP), with the purpose to promote economic growth and capacity for NWT businesses and the NWT economy.

Multiple companies and vendors of all business sizes expressed to committee that in their view, government could do more to allow northern businesses to compete successfully for government contracts. Committee subsequently asked businesses for their opinion and experience with the government bidding process and various types of procurement.

In August 2018, the standing committee asked for responses to a confidential survey focussed on procurement-related policies and processes.

Approach

A survey was distributed to a cross-section of companies based in the Northwest Territories (NWT), representing all sizes, business volumes, and industry sectors. Committee received 19 responses, presenting a response rate of 41 percent. The survey is attached as Appendix 3.

The survey was designed into two sections; the first asking businesses to describe themselves according to categories provided; the second section contained open-ended questions on experiences with procurement processes.

Information gathered from the first sections of the survey provides an overview of indicators of the characteristics of participating businesses. These responses provide informative background to the findings of this report. However, they do not allow drawing conclusions on possible relationships between business sector, procurement tool, size or location of business.

Committee received comprehensive responses to four open-ended questions on experiences with various procurement types. These allow a summary of concerns, observations, and recommendations presented in the "what we heard" section of this report.

Survey Participants

In the first section of the survey, business was asked to identify skill type categories according to the National Occupation Classification to allow a best match with type of businesses. Respondents were allowed to identify multiple sectors. The majority (36 percent) of responding businesses operate in the trades, transport, equipment operators, and related occupancies such as construction. The second most represented occupation was sales and services (29 percent), followed by management (14 percent), business, finance, and administration (7 percent), Manufacturing and utilities (7 percent), natural and applied sciences (4 percent) and art, culture, recreation and sport (4 percent).

There were no responses from businesses in the health, education, law, social, community and government services, and natural resources, agriculture, and related sectors.

Companies that responded to the survey operated in three of the five regions identified in the survey. The majority (63 percent) of vendors were located in the North Slave region, followed by a smaller number (32 percent) of companies operating in the South Slave region. Some businesses were based in the Beaufort Delta (5 percent). No responses were received from vendors based in the Sahtu or the Dehcho regions.

The size of business responding to the survey was nearly evenly distributed among the four categories provided. The smallest companies with one to three employees presented 21 percent, companies with 4 to 10 employees 32 percent and business with 10 to 50 employees 21 percent. Larger businesses with over 50 employees were presented with 26 percent.

Vendors were asked to indicate the approximate total value of GNWT contracts awarded to their business in the last five years. The responses showed a very wide distribution with a median of $300,000, which means half of the values provided were lower, and the other half of total value of contracts was higher.

Businesses indicated the procurement types that had provided them with winning contracts in the past five years (between 2013 and 2018). Requests for proposals (RFP) was the process that resulted most often (31 percent) in contracts with government. Public tender was the type used nearly as often (27 percent). Other types presented a lower share among the successful procurement types, such as sole source contract (17 percent), standing offer agreement (15 percent), and negotiated contract (10 percent).

The majority of respondents indicated that their companies have experience with multiple types of procurement. All respondents had done business with the government during the past five years.

The survey included a satisfaction rating of the tendering processes in place with the government, providing the six choices of RFP, standing offer agreement, public tender, sole sourcing, negotiated contracts and other. When asked to rate the experience with different types of procurement, responses were divided and resulted in as many positive as negative ratings for each procurement process. For example, 42 percent of respondents rated the BIP as poor or not good, while 42 percent rated the same policy as excellent or good.

This result did not provide committee with specific direction; however, the submissions included generous discussion of concerns and recommendations which are presented in this report as a combined experience for each procurement process mentioned.

This Report

This report is organized into four chapters. The Introduction describes the purpose of this report as it aims at providing a contribution to the discussion of good procurement in government. A section on methodology gives background on the survey and the limits in analysis.

The chapter on Key Findings summarizes the comments and recommendations submitted by business in response to questions on types of procurement. Responses to a question asking for each respondent's "top three" recommendations are also considered here.

The "what we heard" chapter provides in more detail insight into the experiences companies and vendors shared with us, focused on each particular procurement process. A conclusion provides final comments by the committee.

The standing committee thanks all individuals and businesses, who took the time and effort to complete the survey, submitted their comments on the government's procurement system, and provided recommendations for improvement.

Key Themes

Committee received input from 19 companies over a three-week period during August 2018. Ensuring that respondents and their answers remain confidential, feedback has been combined and analysed to produce a clear synopsis of what businesses had to say about the GNWT's sourcing and procurement systems and where recommendations were made.

Review of the responses revealed that vendors have four general key concerns:

Increase Consistency, Clarity and Transparency

While businesses indicated they have a good understanding of the tendering processes, their experience with government and their perception of quality of services varied greatly. Vendors were divided in their ratings of procurement processes, however, most commented on issues of consistency of service, and clarity and transparency of the process.

CONCERNS:

• Processes are not consistently implemented.
• Evaluations of responses to RFPs are inconsistent.
• Lack of expertise to conduct evaluations and project needs among procurement authority.
• Processes are not always well described and vendors indicated that they did not always receive clarifying responses to their inquiries.

RECOMMENDATIONS:

• Ensure that procurement processes are consistency with the Business Incentive Policy. The "lowest bid" rule, and standing offer agreements, may conflict with the intent of the BIP, which is to increase benefit to NWT companies.
• Increase clarity of information on the e-procurement process; even with information online, the process often remains unclear.
• Improve reliability of access to the procurement system, the web page, and online services.
• Increase procurement expertise among procurement authorities.
• Design for a non-GNWT third-party monitor for RFP processes, and ensure clarity on that this monitor exists and who it is.
• Provide annual reports on all tender activities.
• Conduct a third party review of all sole source contracts on a three-year basis.
• Develop RFPs that reflect the project size.

Attract Local Vendors More Effectively

Vendors most consistently commented that while the government seems willing to support NWT-based businesses, the existing tools do not achieve this goal. While larger companies expressed that they did not receive enough support to be able to compete successfully against larger out-of-territory companies; small companies indicated they were in a disadvantaged position to compete with larger companies.

CONCERNS:

• Increase efficiency of the public procurement system: The current system may not provide sufficient opportunity for NWT businesses to sell to government.
• Improve implementation of the BIP.
• The bidding process should include a threshold identifying the minimum of project cost to avoid inadequate and unrealistic tenders.
• Limitation for NWT vendors to participate is that below $25,000 contracts are not listed.

Some practices, such as standing offer agreements do not always align with the intent of BIP, and exclude, rather than include NWT businesses.

RECOMMENDATIONS:

• Include northern hire requirements into RFPs and public-private partnership agreements and contracts.
• Include into RFP processes the requirement to hire northern suppliers where more than one northern supplier is available.
• The BIP should link to the ratio of cost of doing business in the Northwest Territories and apply the appropriate percentage as incentive.
• Include in negotiated contracts the condition to work with 100 percent northern resources when available.
• Divide large projects into smaller projects and RFPs to enable smaller companies to compete.
• Allow businesses to know about opportunities under $25,000.
• Ensure that staff and department staff is informed, and all personnel responsible for procurement know about the manufacturers list and the policy for purchasing from those vendors.
• Consult with local suppliers during the planning stages of procurement can help avoid that specifications, requirements or schedules disadvantage local businesses.

Understand NWT Business Capabilities Better

Several recommendations were directed at increasing communication between government and vendors to provide opportunity for collaboration between northern industry and government.

CONCERNS:

• Procurement staff is not always knowledgeable of technical specifications and a lot of time is spent communicating between the department who is project lead, company, and procurement staff.
• Update the definition of manufacturing.

RECOMMENDATIONS:

• Work with northern companies to know what northern business have to offer before searching the internet for products.
• Include input from suppliers or other stakeholders when preparing tenders and set more realistic timeframes for vendor responses.
• Encourage procurement officers to work closer with northern industry, in particular in updating specifications and tenders and that are current and proven in the North.
• Ensure that standing offer agreement practices align with the intent of the GNWT's BIP, which is to encourage and support the development of a healthy private sector and to ensure, particularly in the smaller communities, that NWT businesses can be competitive with their southern counterparts.

Integrate Government Mechanisms and Services

Concern was raised in regards to government internal cooperation and alignment, in particular when it concerned updates to technical and sector-specific information and payment.

CONCERNS:

• The need for increased integration of public procurement into finance management and services delivery processes to avoid inconsistencies such as late payment to vendors.
• Price seems to be the only determining factor leading to awarding of tenders, not considering reliability, service, safety, or other criteria.

RECOMMENDATIONS:

• Offer continued education of BIP and Manufactured Products Policy (MPP) through to the GNWT departments, including Shared Services.
• Ensure for integration between departments to ensure timely payment of vendors.
• Include interim payment options for large product and manufacturing costs.

What We Heard

The survey offered opportunities for commentary and explanations for each of the procurement types, extra space for additional and general comments via many open-ended questions.

Overall, larger companies expressed that they did not receive sufficient consideration to be able to compete successfully against larger out of territory companies; small companies stated that they were in a disadvantages position to compete with larger companies operating within the NWT.

The results have been combined and analysed to produce a clear synopsis of what businesses had to say about the GNWT's source and procurement systems, and share the recommendations made with the aim to make the system work better for both, government and private sector in the NWT.

Business Incentive Policy (BIP) Process

Most feedback focussed on the BIP, and most "top three" recommendations addressed components of the BIP process.

The BIP is the government's policy applying to procurement contracts entered into directly with the government, with the exception of employment contracts. The purpose of BIP is to encourage and support the development of a healthy private sector and to ensure, particularly in the smaller communities, that NWT businesses can be competitive with their southern counterparts.

Many comments focused on the low-bid contract system and questioned whether the lowest bid price is the appropriate criteria to be used by government to find the "best" bidder. Comments included that the lowest bidder may not necessarily provide assurance that the project will be completed on time or that additional contract amendment, and extra funds, may be required.

To avoid inadequately low bids, it was noted, technical reviews may be required to identify whether a bid is not in strict accordance with all the requirements and specification. This process relies much on the expertise and experience of GNWT staff, which several businesses believe to not always be as advanced as is necessary to result in fair assessments, in particular when compared to bids originating in other jurisdictions.

A possible conflict with the intent of BIP was noted. It was questioned how the "lowest bid" rule would align with the intent of the BIP, which is to increase benefit to NWT companies. A bid system that applies the lowest price to be the winning criteria may curtail opportunities for those companies who maintain year-round northern workforces while paying higher freight and operating cost. It was recommended to adjust requirements for BIP applications so businesses based in the NWT have more chances to compete successfully.

Several vendors expressed concern that a low-bid system:

• Creates risk;
• Does not guarantee that the project will stay within agreed price range or that it will be completed; and
• May lead to failed projects, which create costs to governments and business.

Businesses were concerned about procurement authorities having appropriate training. Technical expertise and assessment experience required to fairly assess proposals among NWT-based and non NWT-based businesses was noted to not always be apparent.

Businesses made several recommendations for improvement:

• Ensure that the BIP is reflected in the application of all procurement types.
• Rather than rely on lowest bid only, include other criteria in the bidding process such as performance reports. These are used in other jurisdictions and included with submissions, allowing extra points to be considered in the overall evaluation of the proposal.
• Adjust the requirements for BIP application to ensure that NWT businesses owners and employees actually living in the NWT are paying the higher cost of living, paying higher freight and operating costs, and maintaining a year-round northern workforce can benefit.
• Remove "grandfathering." Several respondents asked for removal of the "grandfathering" of previously registered companies under the BIP, if the company does not meet the ownership requirements for the registry.
• Respondents wondered if there are checks on the performance of approved companies and whether litigation or other legal processes are considered in BIP registration applications.
• BIP should link to the ratio of cost of doing business in the NWT and apply the appropriate percentage as incentive. In other words, if cost is 40 percent higher in the North than it is in the South, the incentive should be able to compensate that additional 40 percent cost. This model could be revised every three years.
• Ensure a fair process when registering companies under the incentive policy.
• Give priority to licenced journeypersons in recognition that certification in a trade provides assurance that the individual has expertise and training in the field, and that work is carried out in compliance with established standards.

Request for Proposal Process

The Request for Proposal (RFP) process is a method used when government is seeking new solutions or approaches to problems or projects. An RFP provides proponents with an overview of a perceived or expected requirement, but does not give a detailed project plan. It is expected that the proponent will develop a project plan in the proposal.

Committee heard that the current RFP process is awkward, lengthy, and needs to be simplified. Concerns were raised regarding knowledge and experience of GNWT staff, in particular in the context of the RFP processes. Several respondents commented on inconsistent evaluations, which in their opinion were caused by inexperienced procurement officers. Processes were mentioned to be often unclear, in particular with the changes occurring within the GNWT administration and transition to Procurement Shared Services.

Businesses made recommendations on how to improve the process:

• Develop the current RFP process into a more elaborated process with opportunities for communication between procurement authority and vendors. For federal government contracts, for example, the process is clear and it includes debriefings so that proponents can understand what is needed. Additional lead time would be appreciated.
• Multiple businesses suggested that only experienced senior management should be tasked to evaluate RFP submissions.
• Ensure project officers know the worth of each project tendered.
• Determine a threshold for a lowest possible bid and don't accept bids that are below the set minimum amount.
• Third-party fairness monitors are needed. Some requested that the GNWT ensure monitors who are non-GNWT employee to be involved in all RFP evaluations.
• Identify a maximum length for proposals and limit the number of pages or characters. Otherwise, smaller companies will be disadvantaged compared to larger companies who have more capacity to prepare more detailed proposals. A limited number of pages should be sufficient to allow companies to indicate they have the required knowledge and qualifications.
• Develop RFPs to reflect the project size.
• RFP should require hiring northern suppliers where multiple northern suppliers are available.

Procurement Shared Services (PSS)

Procurement Shared Services (PSS) of the GNWT is the government's central place for tendering goods from private sector providers that are estimated to exceed $25,000 in value, and services estimated to exceed $10,000 in value. PSS provides support to all GNWT departments and the NWT Housing Corporation to administer the government's corporate procurement policy and updating the procurement guidelines. Tender desks which operate in headquarters and regional centers are responsible for the distribution and receipt of all government tenders and requests for proposals.

Respondents listed several concerns and expressed confusion and frustration about the transition of procurement to PSS. Several vendors asked to be allowed to deal directly with purchasing departments and remove contracting from PSS in order to get access to information required to complete the tender process. Some viewed PSS as an additional layer of bureaucracy that interfered in the relationship between department and supplier, the quality of product, and cost and delivery.

Businesses made recommendations on how to improve PSS processes:

• Increase procurement expertise.
• Consider the most efficient and appropriate tender process, for example, when procuring unconfirmed and possible changing services, to stop using the firm tender process and utilize the RFP process.
• Create opportunity for client departments to work with northern industry to the update specifications and tenders.

Timely payments were noted as a challenge by multiple respondents. Government offers an early payment option at the cost of two percent of the invoiced amount, however, respondents noted occasions where payment was not made within the 20 day-period promised. PSS is seen as slowing down all elements in the bidding process, including payment.

Recommendations made included the suggestion that GNWT pay invoices below $10,000 within a week. Another suggestion was that GNWT should pay a late payment penalty, the same two percent rate that it charges as early payment fee.

Sole Source Contracts

The sole source contracting process occurs when only one firm is available and capable of performing the contract, or the urgency of the situation determines that the competitive process cannot be used.

Several comments indicated that respondents did not see the purpose of this type of tender and expressed that all work should go through a competitive process.

Recommendations included that:

• Sole source contracts should only be awarded to southern suppliers if as per BIP registry no northern suppliers are available.
• GNWT should conduct a third-party review of all sole source contracts on a three year basis as to whether the policies and procedures were properly followed.

Other comments suggested specifying conditions for sole source contracts, for example by changing the decision-making authority, others liked to see a specific dollar limit put on sole source contracts (as low as $10,000), others again suggested that sole source contracts should be limited to instances where timing is a factor.

Standing Offer Agreement

A Standing Offer Agreement (SOA) is an agreement, obligating a vendor to supply on demand specified goods or services at a predetermined price or discount structure, under specific conditions for a set period of time. SOAs are used for services or products commonly used by all departments and agencies of the GNWT. The core purpose of an SOA is to increase the level of cost-effectiveness for government by consolidating volumes, and reducing the time required to receive the goods or services.

SOAs are established through a formal tender process, using the Request for Proposal (RFP) or Request for Tender (RFT) process. SOAs do not contain legal obligations to contract for all or any of the goods or services, they are not considered contracts. The commitment to funds is made in the form of purchase orders or service contracts.

The survey did not offer a specific question on SOAs; however, comments on SOAs were received in response to questions on sole source contracts and general comments.

Business pointed out that SOAs for goods are very difficult to work within. While the agreements allow for flexibilities in the implementation of the agreement, there are also many variables that make it difficult for a potential vendor to have a clear understanding of what precisely is needed, what could be offered and at what price. Furthermore, committee heard that businesses believe it to be very difficult to fairly compare and score standing offer submissions.

Recommendations include:

• Allow northern companies to compete by applying additional solutions, such as changes to the list of prerequisites, or for southern firms to have proof of Joint Venture agreements with northern firms.
• Clarify how southern firms competing for NWT business should go about gaining local knowledge, if fulfillment of an agreement depends on it.
• Consider breaking up SOAs and allow departments to sign separate agreements to increase opportunities for NWT businesses to compete.
• Ensure that Standing Offer Agreement practices align with the intent of the GNWT's BIP, which is to encourage and support the development of a healthy private sector and to ensure, particularly in the smaller communities, that NWT businesses can be competitive with their southern counterparts.

Manufactured Products Policy

The NWT northern Manufactured Products Policy (MPP) has the purpose to ensure that GNWT procurement provides a benefit to manufacturers in the NWT. The procurement process recognizes the higher production costs for made-in-the-NWT products and gives incentive to production and manufacturing of goods for the use by the GNWT. In order to benefit from the MPP, a product must be recognized as an approved NWT manufactured product. A BIP-registered business may apply to have their NWT-made goods registered under the MPP.

Recommendations to improve GNWT procurement policies and practices included the following suggestions for the MPP:

• Continue to support and encourage northern manufacturing because it helps diversify the NWT economic diversity by creating jobs, opportunities for training and capacity building, and spin offs to local suppliers or service providers.
• Ensure that the department and all government personnel responsible for procurement know about the manufacturers list and the policy for purchasing from those vendors.
• Increase GNWT awareness of the role that a northern manufacturing sector could play in the NWT economy and identify the loss that comes with not supporting northern manufacturers if goods are supplied by out-of-province companies.
• Incorporate interim payment deposits into MPP; consider practices and standards used other jurisdictions and federally throughout the manufacturing sector.
• Increase GNWT awareness of tools that can be used in procurement to encourage northern manufacturing.
• Incorporate investments into the NWT Manufacturing Strategy.
• Review and amend the definition of what a manufactured good is, and preferably broaden it to include more products and vendors.

Negotiated Contracts

GNWT departments are allowed to enter into contracts outside of the competitive process and in compliance with the Government Contract Regulations. An eligible contractor may request a negotiated contract to undertake work that provides opportunities to improve the skills and experience of residents and northern businesses, or realize economic benefits for residents, that would not be realized through a competitive process.

Committee heard that businesses perceive that the GNWT currently does not support this type of non-competitive contracting; however, still at times an ad hoc enters into negotiated contracts. Agreement with this type of procurement was noted only as long as the participants are northern businesses and not "store fronts" for companies operating out of jurisdictions with lower costs of doing business.

Stakeholders recommended including into Negotiated contracts the condition that 100 percent northern resources must be used, if they are available.

Transparency

A professional public procurement system requires high standards of integrity for all stakeholders in the procurement cycle. The responses indicate that there is room for the development of internal controls because fairness measures that may currently exist are not readily recognizable. Dispute mechanisms need to be made known as the effectiveness of a bid dispute mechanism may impact vendor confidence and willingness to sell to government.

Several comments noted that the tender process could be improved by updating the existing webpage and allow viewing of awarded contracts. There were some sentiments that contracts may be awarded to companies based in southern jurisdictions while NWT companies offer similar if not better resources. It was commented that the overall procurement process should be more accountable.

Committee heard that businesses believe it to be very difficult to fairly compare and score SOA submissions. Increased transparency would aid in understanding the government's process for this procurement type.

Some comments referred to ensuring that political interference in contracting practices is problematic while others requested that Cabinet needs to take control of their departments and not let bureaucracy dictate direction.

Committee heard at occasion that there is little information that allows reviewing past performance of procurement processes to inform procurement authorities on impacts of local businesses on the local and NWT economy.

Working Together

Procurement planning requires that all potential partners understand what is required and what is available. Adapting to how much of a good or service to buy at different points during a year to take into account differences in availability or pricing, characterizes the ability to design the procurement to maximize best value.

Businesses made several recommendations to increase cooperation between GNWT and potential vendors:

• Include in policy documents and strategies the requirement to seek input from suppliers or other stakeholders, and set more realistic timeframes for vendor responses.
• Consult with local suppliers during the planning stages of a procurement because this can help avoid that specifications, requirements or schedules disadvantage local businesses.
• Vendors need to be granted adequate time to carry out work due to either late release of procurement or slow award of contract or unrealistic schedules.
• Ensure that information requests from vendors are responded to; difficulties in obtaining answers may lead a vendor to the decision to not submit a response.

Other recommendations included the proposal to provide businesses with advance notice of opportunities for under $25,000 contracts and allowing GNWT businesses to self-identify if the desired services or goods can be supplied.

Recommendations

The purpose of the survey was for committee to better understand how businesses interact with procurement process of the territorial government, and to hear what works and what needs improvement. Responding to a confidential survey, companies shared with committee their experiences with a system that was in place prior to and during 2018. Since the survey was conducted in 2018, the GNWT has improved its procurement capabilities, released procurement guidelines and transitioned to an e-procurement platform.

Committee is of the view that the key issues raised in this survey remain relevant and will be helpful in further improving the GNWT's procurement processes, and identify how to increase opportunities for NWT businesses.

Committee believes that some of the concerns raised by business may indicate the increasing risk of an uncertain business environment in the NWT. Therefore, committee impresses on the Government of the Northwest Territories to adopt an active, forward-looking, and collaborative approach to public procurement. Committee makes the following recommendation:

Recommendation 1

The Standing Committee on Economic Development and Environment recommends that the GNWT establish a procurement advisory panel composed of members of industry, small business, procurement experts and members of the public service. This panel should be guided by a clear terms of reference, setting out the panel's role in providing regular advice to the government on how to improve procurement processes.

The need for government to better understand company capabilities and to improve access for local vendors to public sector procurement was expressed by a significant number of respondents. Committee heard about a strong desire to improve mechanisms to support local suppliers. Businesses showed concern that some of the procurement processes may not align with the Business Incentive Policy of the Government of the Northwest Territories, and may even contradict the policy.

These concerns, of how to balance interests and prioritize goals that will support economic activities in the NWT, will remain unless they are addressed. As first steps, committee members suggest that the Department of Infrastructure verify with vendors, clients and other stakeholders the successful implementation of the new e-procurement system.

To enable alignment with recently developed policy directives, ongoing departmental restructuring initiatives, and changes in administrative and technological applications, committee is of the view that a more comprehensive approach is required. Accordingly, committee makes the following recommendation:

Recommendation 2

The Standing Committee on Economic Development and Environment recommends that the GNWT undertake a comprehensive public review of all procurement related policies with the explicit direction to modernize government procurement processes, and to ensure that NWT businesses can benefit and a healthy private sector is developed in the NWT, taking into consideration concerns and issues raised in this report, along with committee's recommendation.

Conclusion

Committee heard many concerns about the future of the NWT economy. A possible lack of future opportunities for government tender was believed to result in negative impacts on the health of NWT companies. With the GNWT being the largest supplier of contracts in the territory, businesses indicated the hope for government to schedule tender releases in a way that a steady stream of procurement is made available to NWT businesses. It will be important for GNWT to consider systematic approaches to avoid boom and bust cycles in any of the territories sectors.

The committee thanks all those who took the time and effort to complete the survey and submit their thoughts on procurement and provide recommendations for improvement.

Rule 100(5) of the Rules of the Legislative Assembly of the Northwest Territories requires Cabinet, in response to a motion by committee, to table a comprehensive response that addresses the committee report and any related motions adopted by the House. As required by this rule, committee usually includes a recommendation in each report, which is moved as a motion in the House, requesting a response from government within 120 days. Given that the 18^th Legislative Assembly will dissolve prior to the conclusion of the 120-day time period allowed by the rules, committee has opted to forego this recommendation. Committee nonetheless requests, to the extent it is possible before the dissolution of the 18^th Assembly and for the public record, that government provide a response to this recommendation, even of a preliminary nature, that committee may publicly disclose.

Masi. Member for Yellowknife North.

Masi. The motion is in order. The motion is non-debatable. All those in favour? All those opposed?

---Carried

The Committee Report 29-18(3) is now moved to committee for further consideration later today. Reports of standing and special committees. Now we turn over to the Member for Frame Lake.

---Laughter