Gov't wants to 'evolve' N.W.T.'s small manufacturing sector with new strategy

The Northwest Territories government is thinking about changing how it definesN.W.T. manufacturing, andwants to increase the number of local manufacturers and grow their sales.

Industry, Tourism and Investment Minister Wally Schumann announced the government's new 17-action strategy to expand and "evolve" the manufacturing sectoron Monday in Hay River.

The strategy targeting the territory's small manufacturing sector is a first for the government.

Up until Monday morning, there were 12 manufacturers registered under itsNorthern Manufactured Products Policy.

Schumann said one more company registered since announcing the new strategy bringing it up to 13.

"The strategy is working! We already increased by one,"Schumann told CBC, laughing.

According to the government's approved manufactured products list, these companies providethe government with products, such as: traffic signs, banners and decals for buildings, bridges, specialized steel products, fibreglass, roofs, cabinets, portable live bear traps, steel tanks and fuel trucks, among others.

Manufacturing in the Northwest Territories is a challenge for sure.- Jason Coackwell, President of NWT Manufacturers Association

The sector generated $24.8 million in 2017, which was about 0.5 per cent of the territory's GDP that year, according to a news release.

The government now hopes to increase the number of N.W.T. manufacturersby 25 per centin five years.

It also hopes to increaselocal manufacturers' salesby 25 per cent in three years.

"Manufacturing in the Northwest Territories is a challenge for sure," said Jason Coakwell, president of the NWT Manufacturers Association, and also the general manager of Aurora Manufacturing.

"Up in here North here [we] face typically higher labour costs, higher utility costs, just a higher cost of business in general."

Coakwell said all the local manufacturers have to be diverse with their products because the economy is smaller.

Coackwellsaid the association worked with the government to help develop the strategy voicing the challenges the current policy presents.

"We're happy they're asking for our input," he said. "Really, there's still a lot of work to do but we kind of know now what needs to be worked on to potentially grow."

'Imperfect,' 'not transparent' bidding process

The government aimsto change its bid adjustmentprocess, which the department calls "imperfect and administratively burdensome."

When there is only one manufacturer registered to provide a product, the government purchases it through a sole-source contract. There is a percentage adjustment that makes sure the product is within 25 per cent of market price, the government explains, but this is "not transparent."

A lot of these businesses just focus on [government]business and not broader.- Minister Wally Schumann

"[The department] isgoing to work with the [NWT Manufacturers Association] to examine options to instead have a transparent bid adjustment that would reduce administration and red tape," it says in a Q&A document.

After manufacturers expressed concern over the lack of appeal provisions, the government says it will try to add thoseprovisionsin its policy so that "applications receive fair consideration."

The strategy also includes an award of up to $100,000to support technologicalinnovation in the manufacturing sector.

The department also hopes to do more marketing at trade shows to help local manufacturers get new opportunities.

Changingdefinition of N.W.T. manufacturing

The department says it's looking to re-examine its definition for N.W.T. manufacturing, after manufacturers proposed it be reviewed.

The definition currently specifies thatone or more major components of a product is produced in an N.W.T. facility.But the departments says that right now, theproduct must meet a narrow set of criteria that may be "burdensome" for manufacturers.

According to a department spokesperson, changingthe definition may expand its scope toinclude entities "that some might consider as manufacturing" like the diamond industry, the agricultural and commercial food industry,the wood pellet plant in Enterprise, and the fish processing plant in Hay River.

However, the definition would still exclude "small scale" manufacturers, such as artisans and companies that harvest local food products, says the department. The department says there are other, specific programs and strategies to support them.

Selling outside the N.W.T.'a goal'

A part of the strategy is to help strengthen and support the NWT Manufacturers Association,which Schumann described as being "defunct" at one point.

"The association kind of went dead there ... With our help, we helped them revitalizethis thing and get some book keeping stuff in order," said Schumann.

The manufacturers willhave a collective voice, said Schumann.

• Read the full strategy here

Schumann said he hopes eventually, local manufacturers won't limit their sales to government.

"One of the problems that we had with this manufacturing policy is, a lot of these businesses just focus on [government]business and not broader," said Schumann.

He said his hope is to get local manufacturers to start selling outside the territory.

"That should always be your goal as a business, to grow as much as you can not to be focusing on just one industry."