February 21st, 2018: The Government of Ontario is proposing The Fairness in Procurement Act, 2018, would, if passed, allow Ontario to take responsive and proportional action to discriminatory government procurement practices by U.S. subnational jurisdictions.

Buy American policies in the U.S. at the state level could restrict or inhibit Ontario-based businesses from participating or succeeding in certain state government procurement contracts. Two such policies include:

• The New York Buy American Act, scheduled to be implemented on April 1, 2018. This legislation could prevent Ontario iron from being supplied for New York State public works contracts over $1 million (USD) for surface roads or bridges.
• The Texas Buy American Act, which was enacted on September 1, 2017. This legislation requires that all construction contracts awarded by all state government entities require the use of U.S. made iron and steel, with some exceptions.

The proposed legislation would give Ontario the flexibility to choose whether and how to respond to discriminatory procurement actions against U.S. states by providing the authority to make responsive regulations. If made, the responsive regulations would:

• Be pursued in instances when a U.S. subnational jurisdiction (state or local governments) enacts legislation or adopts a discriminatory policy that may inhibit or prevent Ontario suppliers from participating or succeeding in procurement processes initiated by procuring entities from the offending U.S. subnational jurisdiction. In this way, Ontario would be responding to new discriminatory legislation put in place.
• Provide specific parameters for action.

Once the regulation comes into force, Ontario’s procuring entities could be required to exclude companies from a U.S. state from competing on specific procurements. The responsive regulation would be revoked in the event that the offending U.S. subnational jurisdiction removed its “Buy American” policy, or provided Ontario-based suppliers with an exemption.

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Ontario Chamber of Commerce Reaction:

President  & CEO, Rocco Rossi: “Positive diplomatic relations should always be our priority when it comes to trade discussions. With the Fairness in Procurement Act, we understand that the Government’s intention is to respond to barriers rather than escalate them. However, we are concerned with any approach that risks escalation of trade barriers, especially when it is taken only by Ontario. No other province in Canada has legislation in place that would escalate trade sanctions when they occur.

“The Ontario Chamber of Commerce believes that the best approach for Ontario is the formation of positive bilateral cooperation with our American neighbours. This is the approach the Premier and her Government have taken to date and they must continue to do so. 

“Today, we wrote to state chambers in Texas, Oregon, California, Ohio, Colorado, New York, Kentucky, Michigan, and Indiana, asking them to work with us in pursuing bilateral agreements through our respective state and provincial governments.

“While we acknowledge the Province has already been active on this through their state engagement strategy, our members have told us they want the Government to continue to actively advocate on their behalf with American states. We need to do that in a cooperative manner to ensure prosperity and competitiveness for Ontario businesses. We will continue to work with both the Government of Ontario and our American neighbours to advance positive economic cooperation and positive trade relations.”

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Hamilton Chamber of Commerce Reaction

We are largely supportive of the Ontario Chamber Of Commerce’s advocacy position on this issue. However, our early engagement of members within the Steel and Manufacturing industries has demonstrated strong support for the Bill as a necessary precaution and escalation tool to address rising protectionism and exclusionary policies south of the Border.

We encourage the Province of Ontario and US States to deescalate the current situation and refocus their efforts on regulatory co-operation and further integrating our economies. In fact, in 2017, the Hamilton Chamber entered into a formal strategic agreement with the Buffalo Niagara Partnership (BNP) and the Greater Niagara Chamber of Commerce, providing our members with reciprocal membership with the BNP and access to business development opportunities. We support the efforts of BNP to oppose  Buy America legislation proposed by the New York State Government.

Keanin Loomis, President & CEO, Hamilton Chamber of Commerce:”It’s unfortunate that this type of response is necessary, but Ontario can’t play nice in the face of protectionism. Our economies are tightly integrated through a number of supply chains and this undermines our efforts with business associations across the border to further enhance cross-border trade.” This escalation is why we are standing in alignment with our friends at the Buffalo-Niagara Partnership in joint opposition to New York State’s Buy American provisions.”

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For more information, please contact: Huzaifa Saeed, Policy & Research Analyst, Hamilton Chamber of Commerce | e: h.saeed@hamiltonchamber.ca | t: 905-522-1151 ext: 230

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