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Hay River council rejects home-business bylaw

Town council rejected an updated procurement bylaw on June 26 after some councillors said it treated home-based businesses unfairly.

The existing procurement policy dictates how the town of Hay River should buy goods and services, and grants a purchase preference of 10 per cent to local businesses.

Scott Clouthier, who owns a home-based business, is glad council decided against a procurement policy that would give preferential treatment to storefront businesses. Sidney Cohen/NNSL photo

This means Hay River businesses can place bids up to 10 per cent higher than their non-local competitors and still be awarded a contract from the town.

Under the updated bylaw however, the purchase preference would only apply to businesses operating out of a brick-and-mortar shop.

This stipulation was added by the policy committee.

Ahead of Tuesday's council meeting, Coun. Vince McKay took to Facebook to decry the policy, which he viewed as unfair to business people who work from home.

"Small businesses make up a lot of the community and also help stimulate the economy of Hay River, they pay taxes just like everybody else and a lot of large businesses started off small," he stated in a June 26 post.

McKay wrote that the proposed policy is "absolutely ridiculous," and called on home-based business owners to show their opposition to the proposed policy by attending Tuesday's council meeting.

About a dozen home-based businesses owners did just that.

"The value of hiring local, it goes beyond dollars and cents at the end of the accounting column," said Scott Clouthier, who runs his media company, Scott Clouthier Creative Services, out of his home.

Clouthier worried that with no special allowances for home-based businesses, such operations would be treated the same as a businesses from out of town.

Judy Goucher, the town's senior administrative officer, said home businesses were excluded from the procurement policy because their overhead costs are not as high as storefront operations.

She said the town would still approach home-based businesses for bids, but they would not benefit from the 10 per cent purchase preference over an external supplier.

Deputy mayor Donna Lee Jungkind said storefront businesses pay commercial rates for water, power, sewer services and heat, as well as property taxes on their shops.

"They have had to purchase and invest more into the community than just having their actual home… and they do have, generally, more than one employee," said Jungkind.

She added that home-based businesses may push the limits of utilities and garbage pickup while still paying residential rates.

The town has heard many complaints over the years of several vehicles parked outside home-based businesses and higher traffic in these areas, said Jungkind.

"The general intent isn't to not ever do business with anybody that has a home-based business," she said.
"The intent is to have a fairer playing field."

Jungkind floated the idea offering a 5 per cent purchase preference to home-based businesses, but the suggestion did not gain traction.

She urged her fellow councillors not to scrap the bylaw because a number of items had been changed and the public deserves to be consulted on the whole policy.

Public consultation would have been the next step, had council given the procurement policy the greenlight.

Coun. Keith Dohey disputed the notion that storefront businesses deserve special treatment.

"In five years here, I haven't had that many people people banging down my door saying how (they) are getting cheated out of jobs by people operating out of their basement," he said.

Ultimately, concerns over the purchase preference issue were great enough to stop the updated policy from moving ahead.

Dohey, McKay and Coun. Steve Anderson voted against the bylaw, meaning it will go back to the policy committee for further discussion.

The policy committee is made up of Mayor Brad Mapes, Jungkind and Coun. Kandis Jameson.

In an interview on Thursday, Goucher said that, "generally speaking, the policy amendments were well received."

She said the updates help clarify the role of the town in procurement, and what buyers or vendors can expect.

Clouthier is happy council voted down this version of the policy.

"There's other ways that the town can help alleviate the overhead that brick-and-mortar businesses face that doesn't negatively affect people who run home occupation (businesses)," he said.