A Yellowknife businessman is upset that his company is not considered part of the manufacturing sector despite his efforts to become designated.
Darwin Rudkevitch, co-owner of Arctic Farmer, said despite the GNWT's efforts to diversify and build on the manufacturing sector, he feels it's laughable that his company doesn't qualify for Northern Manufactured Products status. The main benefit of such a designation is gaining favoured status for government contracts over outside companies.
“By being a manufacturer, we felt it would give us an edge (competitively) on Canadian Tire, Walmart, or Extra Foods. We manufacture all of our products here,” he said. “We don't have a truck rolling into Yellowknife full of flowers.”
His operation, he argued, manufactures greenhouse grown plants, flowers, hanging baskets, shrubs and trees from scratch, while other locations in town have their products shipped in from elsewhere. From what he has learned, however, developing seed to plant products doesn't count as transforming raw material into a finished product, which is one of the the requirements to become a Northern manufacturer.
As well, Rudkevitch said the GNWT doesn't think he exceeds the designation requirement of “25 per cent value added” – representing what his company provides to the local economy in terms of produced goods, new jobs, and investment in other local products. However, he said he adds five full time jobs year-round and does most of his business purchasing in the North, including wood to heat his greenhouse.
In May, the GNWT Department of Industry, Tourism and Investment completed a summary document following consultations with businesses throughout the NWT. A final strategy is to be tabled during the fall session.
The latest document includes feedback from North Slave businesses on challenges operating as manufacturers. Among them included complaints from manufacturers regarding procurement including that GNWT staff aren't perceived as “knowledgeable” on technical expertise and dealing with technical standards on products, that specifications to get a Northern Manufactured designation are overly technical and that manufacturers have had to incur substantial expenses to meet operational requirements.
According to the mandate put out by MLAs at the beginning of the legislative session, the GNWT aims to find new ways to grow the NWT manufacturing sector, including promoting and marketing products made in the NWT, and providing assistance to the industry.
Kieron Testart, who represents Rudkevitch as Kam Lake MLA, said he has heard his constituent's concerns and asserted the GNWT has to do more to support business development with a company like Arctic Farmer.
“When (Arctic Farmer) looks for some support from government with a manufactured product, the government says it is a seed and that you can't manufacture a seed.” Testart said. “But what about the baskets? Or the trolliuses (flowers)? And why not a seed? Just saying it is a seed and not a manufactured product isn't cutting it.”
The Northern economy cannot just be reliant on mines and public service jobs, Testart says.
He said it would make more sense for the GNWT to develop a job subsidy for each of Rudkevitch's staff positions to “take the edge” off Northern manufacturers trying to compete in a global economy.
David Nightingale, director of business support and trade with the Department of Industry, Tourism and Investment, said in an email that the final draft is underway and that the fall report should include direction for the manufactured products policy.
“The challenge to government is to help create the environment that supports the growth of manufacturing in the NWT, providing some strategic supports for the NWT manufacturing sector,” Nightingale stated, adding the sector needs a wholesale review. “The existing NWT Manufactured Products Policy is one example of the type of support that governments can provide. We did hear during engagement that there could be some improvements to this policy.”