Yukon unveils new policy for awarding government contracts

The Yukon government has announced changes to its rules for how it hires companies to deliver goods and services.

One of the major changes involves the definition of a Yukon business. For some government contracts, only Yukon businesses are allowed to bid.

Previously, businesses had to meet at least two of four criteria: employing Yukon residents, owning property in the territory to operate the business, having a year-round, locally-staffed office in Yukon, and having more than 50 per cent ownership by Yukon residents.

The new rules lower the bar, by stipulating that three of four new criteria must be met: the business must have a physical address in the Yukon, must pay Yukon income tax, must be registered under the Business Corporations Act, or have a valid municipal business licence, where applicable.

Public Works Minister Richard Mostyn defends the changes, saying they do not open the door for shell companies from elsewhere to come lock up lucrative government contracts.

"We've been working very closely with the business community ... we've been working with the chambers of commerce, to make sure that we came up with a definition that addressed the concerns in the community and actually addressed the concerns of the business community."

Mostyn says the new definition will be universal, adding it will be used to define what is a Yukon company, for the carbon tax as well. 

"We will have provisions that say, 'What value do you bring to the local community,' and they will be telling us who they're employing and how they actually benefit the local community," Mostyn said.

"The object is to make sure that people who have invested in the territory, who have sunk capital into the territory, have invested in skills development, have an opportunity to bid on contracts."

The threshold for invitational tenders — those awarded without open competition — will also increase, from about $75,000 dollars to just over $100,000.  

In 2018, the Yukon government spent $345 million on procurement. $213 million of that went to Yukon businesses.

First Nations policy still in works

CBC obtained a copy of the procurement policy, which comes into effect April 1.

Chapter 11 of the draft says a First Nation procurement policy will be developed in collaboration with First Nations, and added later to the policy. That policy would aim to create opportunities for First Nations businesses to benefit from government contracts.

Mostyn says a technical group is now working on that, adding that not all of Yukon's 14 First Nations have agreed to participate.

"I have reached out to every First Nation chief in the territory and we've now got representatives of 12 of 14 First Nations now actively drafting the First Nation procurement policy with us. We had hoped to have it done by April of 2019, we want to make sure we get it right." 

Mostyn says this is the first time any Yukon government has attempted to create a First Nations procurement policy. 

"We're dealing with a blank slate ... we're making some good progress on it." 

Yukon Party leader Stacey Hassard wonders what the impact will be of holding off on a First Nations procurement policy, noting that Economic Development Minister Ranj Pillai told the local contracting industry last fall that the First Nation policy would be released at the same time as the general policy.

"[First Nations] wanted this information; they want it just the same as any other contractor because they need it to move forward ... So it's certainly not fair to them."

Hassard also criticized Mostyn for not releasing the details of the new policy at a news conference Mostyn held on Thursday.

"If you're going to announce a policy, you should have the policy there to be shared with the people that you're announcing it to."