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Sealift battle brews in the Kitikmeot

The Government of the Northwest Territories is overstepping its bounds by competing against private business in the Kitikmeot region, say corporate leaders of two sealift companies.

Marine Transportation Services, under the auspices of the Government of the Northwest Territories, delivered 37 million litres of fuel and more than 10,000 tonnes of cargo to NWT communities and commercial clients in 2017. Kitikmeot gold miner TMAC Resources was among them.
photo courtesy of the Department of Infrastructure

Suzanne Paquin, president and CEO of Nunavut Eastern Arctic Shipping (NEAS) and Daniel Desgagnes, managing director of Nunavut Sealink and Supply Inc. (NSSI), are strongly opposed to the practice, which they call unfair.

The GNWT stepped in last year to assume marine resupply in the Northwest Territories after Northern Transportation Company Ltd. (NTCL) became insolvent in 2016. The territorial government purchased NTCL's assets for $7.5 million in December 2016 and later handed over the reins to its Marine Transportation Services (MTS) division. The GNWT also, through a competitive bid process, hired St. John's-based Orsi Offshore Recruitment Service to secure ship captains, crews and shipyard personnel.

The GNWT extended its service into the Kitikmeot last year, as NTCL used to do, and it plans to follow the same practices again this year.

"Now we feel like we're competing against the government," NEAS's Paquin said. "Certainly when (the GNWT is) going out and competing against private industry, when there is a competitive market out there, I feel that it is completely inappropriate. Their cost structure is completely different than ours. They are in a position of advantage, which is not acceptable."

NSSI's Desgagnes said he understands the GNWT ensuring its own communities are serviced but he wants the NWT territorial government to stop operating in the Kitikmeot, where the Kitikmeot Corporation is a shareholder in NSSI. Desgagnes added that he sent a letter to the GNWT a couple of weeks ago to express his objections but he hadn't received a response as of May 24.

Derrick Briggs, director of Marine Transportation Services, responded that MTS is not reliant on ongoing funding from the territorial government – it required $14 million in initial government funding last year – and MTS uses the same equipment it acquired from the now defunct NTCL, nothing more.

"The GNWT is committed to operating in a transparent manner, and we offer shippers and communities the opportunity to make informed choices about their preferred shipping service providers," Briggs said.

With operations headquartered in Hay River, NWT, MTS delivered more than 10,000 tonnes of cargo and 37 million litres of fuel in 2017, according to GNWT Infrastructure Minister Wally Schumann, who noted that more than 140 workers were needed during the peak of shipping activities.

NEAS is majority owned by the Makivik Corporation, which operates on behalf of the Inuit of northern Quebec. The remainder of the company belongs to Transport Nanuk Inc., made up of The North West Company and Logistec Corporation. NEAS, which lists seven ships in its fleet, hauls cargo and delivers fuel from a port in Valleyfield, Que.

NSSI is a joint venture of Quebec-based Desgagnes Transarctik Inc. and Arctic Cooperatives Ltd. The Nunavut Inuit-owned Qikiqtaaluk Corporation and Sakku Investments Corporation are also shareholders. NSSI's seven ships operate out of Sainte Catherine, Que., and Churchill, Man. NSSI reported shipping between 580 billion to 680 billion cubic metres of cargo to and from its Northern destinations annually between 2014-2016.

Sealift season generally runs from late June through late October.