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NorthwesTel shows $13.5-million profit

Company releases annual report after union gets leaked copy

PATRICIA D’SOUZA

NorthwesTel turned a profit of $13.5 million in 2001, an increase of $2.8 million or 20 per cent over last year, according to the company’s annual report, released last Friday.

The Whitehorse-based telco had planned to withhold the document as long as 375 technicians and call-centre staff remained on strike. Workers have been off the job for eight weeks.

"We decided not to release it because it could be misinterpreted or misused," NorthwesTel spokesperson Anne Kennedy Grainger said last month. "Particularly the part about profit. We’re not a non-profit. We’re a business."

NorthwesTel is not legally required to release its annual report because it is a wholly owned subsidiary of Bell Canada, which in turn is owned by BCE Inc. However, NorthwesTel traditionally releases the document each spring.

The company released the annual report only after a leaked copy was made public by the International Brotherhood of Electrical Workers, the union representing the striking employees.

The report shows that net results for regulatory purposes declined slightly, from $13.9 million in 2000. However, the company just barely managed to stay within the allowed rate of return on equity (ROE), set by the CRTC.

The allowed ROE is between 10 per cent and 11 per cent. NorthwesTel paid investors 10.9 per cent in 2001, compared with 11.1 per cent in 2000.

Operating revenue increased by $10.2 million or 6.9 per cent from 2000. Revenue from local telephone rates increased by $3.1 million or 7.3 per cent. Private network revenue increased by $5.3 million or 14.9 per cent.

And on top of that, the CRTC kicked in $15.1 million for the first year of the company’s service improvement plan (SIP).

Despite an increase in operating expenses ($4.5 million or four per cent) and capital expenditures ($45 million or 50 per cent), mostly due to the SIP, NorthwesTel had a pretty good year.

The company reported total operating revenue of $138.6 million and total operating expenses of $102.4 million, giving it net operating revenue of $36.1 million.

This figure had to be adjusted to accommodate the allowed ROE, giving NorthwesTel a net income for regulatory purposes of $13.5 million.

Nothing wrong with being profitable

"The profitability of the company is a direct result of the work of the women and men of IBEW 1574," said Cary Gryba, unit chairperson and spokesperson for the local representing the workers.

"Ms. Kennedy Grainger says there’s nothing wrong with being a profitable company and they have nothing to be ashamed of. I agree. But please remember that 380 people assist the company in becoming that profitable."

Pictures of some of those people are scattered throughout the NorthwesTel annual report. On page 1, Gordon Peterson, Mark Lowes and Keith Fudge stand in their jeans, coveralls and toolbelts as proud representatives of the company.

"The three that are standing on the front page, those are all Whitehorse boys," Gryba said. "They’re all family men. They are part of the 85.5 per cent [who voted in favour of a strike]. They’re out on the picket line every day."

The report also lists the company’s values: customer loyalty, innovation, teamwork, excellence, employee fulfillment, integrity and community commitment.

"They make great warm, fuzzy claims about their values," Gryba said. "One of their values is employee fulfillment. That’s an absurd thing to state considering they have been willing to spend millions of dollars to break the union."

The company turned to local law enforcement on Monday to break up a picket line outside headquarters in Yellowknife. After the RCMP was called in, vehicles were allowed to proceed, Gryba said.

And both sides have turned to the media, running ads that state why the other is wrong in holding out.

"Here we’re running garage sales to provide for our members who are the most needy and [NorthwesTel is] running $10,000 in ad campaigns," Gryba said.

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