Only hours after being asked about it in question period, the Yukon government confirmed it cancelled a contract to ship liquor into the territory.
The contract to deliver liquor from Alberta and B.C. closed March 5. On March 13, Yukon Liquor Corporation spokesperson Scott Westerlaken confirmed bids came in over budget.
Westerlaken could not say exactly how much over budget the lowest bid was. Since the contract has been cancelled, the information about bidders is no longer on the public website.
The original tender was a company or companies to deliver all liquor from B.C. and Alberta into the territory.
Westerlaken said that in an effort to reduce shipping costs, the government will now be “re-issuing separate calls for bids for the Alberta route and the B.C. route.”
The original tender required that liquor coming from both B.C. and Alberta arrive in the Yukon within three days of the contractor receiving it.
By separating the routes, the government will be able to provide two different turnaround times, Westerlaken said, taking into account that B.C. liquor travels further.
Earlier that day in the legislative assembly, Yukon Party interim leader Stacey Hassard suggested the government was choosing a new way to haul liquor and that it was going to end up costing it more money.
“For approximately 25 years now, the contract for hauling liquor into the Yukon has gone to a company that barges the product from Vancouver to Skagway and then trucks it into Whitehorse,” Hassard said.
“However, this government has made a decision to change that. They put out a tender that explicitly rules out the ability to continue to barge the product. This year’s bid document states — and I will quote: ‘The purpose of this tender is to choose a reliable supplier of over-the-road freight haul.’ Can the minister explain the rationale for making this change and eliminating the ability for the product to be barged to Skagway and then trucked to Whitehorse?”
Minister John Streicker, who is responsible for the Yukon Liquor Corporation, told Hassard he couldn’t answer that specific question but would get more details.
“I … know that there are differences with respect to the timing of how things arrive here depending on if they arrive by truck or by barge. I will get a detailed answer and bring it back here as a legislative return and reach out to the member opposite.”
According to the tender, the government estimates it will need 6.6 million pounds worth of total freight from Vancouver and 7.4 million pounds from Edmonton.
The document says the “contractor shall haul goods in vans or containers over the road from Vancouver/Edmonton to Whitehorse.”
Hassard said he’s heard that decision “could cost the Yukon Liquor Corporation an additional $500,000 annually.”
Streicker said he couldn’t confirm that number and he “would be surprised if the member opposite is correct.” He promised to get Hassard more information.
Westerlaken said the new tender will allow for “more flexibility” for how the liquor gets to market. Barges will now be possible with the B.C. route, he said.
While answering questions from the media following question period, Streicker said he would cancel the tender if the bids came in too high. At the time he said he hadn’t gotten any indication of what bids had come in for the project.
Streicker said the government is looking to get more of its inventory from Alberta because it is faster.
“When you do that you increase your efficiencies because you have faster turnaround and you have to carry less inventory. The whole notion about that would be to try and get costs down.”
He said he believed the issue with barges has to do with the tight turnaround time the government was asking for “which then would make it hard to achieve with a system where you ship it down to Seattle then back up to Skagway and then across.”
After being told the tender had been cancelled, Hassard said he still had questions about why the process was changed in the first place and why the minister didn’t know about the cancelation during question period.
“How do you make that decision in one hour? I would have thought that the minister would have taken a little time and maybe did a little bit of research so that they don’t put out a tender that needs to be cancelled again next week if there’s something wrong with it.”
There’s no word on when the new tenders will be issued. The original contract was supposed to start April 1.
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