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Door to close on Canada-US procurement offer by February 17

Columnist Barrie McKenna writes in the Globe and Mail that, “Roughly five months have passed since Ottawa offered the Obama administration a good deal: Give Canadian companies a piece of the billions being spent on economic stimulus in the United States in exchange for guaranteed American access to a similar volume of provincial and municipal purchasing in Canada. And yet the offer languishes, a forgotten speck in a sea of more pressing issues on the Obama administration’s horizon.”

“A few weeks from now, the proposed deal will be near worthless. As much as 40 per cent of the money from the American Recovery and Reinvestment Act has already been spent. By Feb. 17, what’s left will be committed and on its way out the door.”

“The restrictions are already in the next major stimulus bill in Congress, the Jobs for Main Street Act.”

McKenna argues, “What happens when a Michigan company selling municipal waste-water equipment buys some of its key components in Canada? Or what about building-frame components, welded and moulded in Canada, using U.S. steel? Too bad. They don’t qualify under Buy American. Those complex rules have slowed U.S. stimulus projects and cost jobs, in the United States, as well as Canada.Unless an 11th-hour deal is worked out, that’s the way it’s going to be. Another key component of the integrated Canadian-U.S. economy will fade into history, rupturing forever long-standing supply chains.”

“Six months ago, the Harper government had options. It could, for example, have put more leverage behind its threats by taking a high-profile batch of its own stimulus projects and putting them off-limits to U.S. companies. Ottawa could have promised to unwind those restrictions the moment Congress exempted Canada from Buy American rules. Instead, Ottawa pressured Canadian municipalities to back off any retaliation until after negotiations. And then the Harper government quietly launched talks with Washington, without a clear deadline. Now retaliation would be too little, too late.”

Our critique of the proposed Canada-US procurement deal can be read at