The Ontario NDP is endorsing a policy used all over the United States to support local industry. As reported in the Globe and Mail, NDP leader Andrea Horwath “reiterated her commitment to an expanded ‘Buy Ontario’ policy in Bombardier Transportation’s Thunder Bay plant on Friday.” That policy “would mean all provincial and municipal projects would need to use Ontario materials unless they’re more than 10 per cent more expensive than the cheapest foreign-made version.”
The change in policy would be a big step from existing rules requiring 25 per cent of transit project costs only be Canadian content. Horwath said, “Our tax dollars should stay in Ontario to create jobs and opportunity; our natural resources should be doing the same.”
It’s an idea with legs.
Last week, the Council of Canadians called on Harper to let a Canada-US procurement agreement that bans local sourcing by many provincial agencies and municipal governments (for construction) expire as planned at the end of September.
“It was a lopsided deal,” I said in the release. “If Obama’s new ‘Buy American’ rules kill it then good riddance. We can do much better for our municipalities and the thousands of workers still looking or who have stopped looking for work.”
Instead, we should be applying “Buy Canadian” rules to another major stimulus deal for municipal infrastructure. The benefits for Canadian firms would be much greater than the paltry new access they got to US stimulus cash in Harper’s procurement deal — a deal the Canadian Manufacturers and Exporters pushed for very hard.
CME was behind the municipal campaign in Ontario which eventually led to the Federation of Canadian Municipalities endorsing a procurement agreement with the US. The campaign effectively failed to guarantee Canadian firms would not be shut out of state and municipal contracts. But we shouldn’t resort to panic, suggests Scott Sinclair, senior researcher for the Canadian Centre for Policy Alternatives, in a Tyee article this week.
Sinclair writes “there is a lot of misinformation on what it (the new US stimulus bill) actually means with regard to Canada-U.S. relations and future international trade policies.” Neither it nor the last stimulus package contravened US trade commitments in NAFTA or elsewhere, he says.
“Despite what you might hear from the Conservative government and many media reports, the 2010 Canada-U.S. Government Procurement Agreement (GPA) did not provide Canada with its sought-after exemption from the Buy American provisions in the Recovery Act… Instead, the deal granted Canada a temporary waiver covering seven specific programs funded under the Recovery Act.”
By the time the deal was concluded, over 90 per cent of the stimulus money had been spent, “leaving less than $US 2 billion available to Canadian suppliers,” writes Sinclair. “In return for these slim pickings, Canadian governments made temporary commitments covering a range of municipal and Crown corporation construction, amounting to roughly $CAD 25 billion. The deal was remarkably one-sided, with the bulk of the benefits going to the U.S.”
“Instead of antagonizing the Obama administration by opposing its jobs initiative, Canadian governments should be enacting new stimulus measures of their own that make better use of our substantial public purchasing to boost Canadian jobs, support new industries such as renewable energy, and assist marginalized groups.”
You can call this protectionism or you can call it smart public policy. Whatever you call it, it’s a policy option used across the United States and the world which the Harper government is systematically denying to Canadian provinces, territories and municipalities through free trade deals with very little going for them.
The latest studies show the proposed Canada-EU free trade deal may increase Canada’s GDP by as little as 0.18 per cent–a quarter of the $12 billion Harper is promising–or as much as 0.36, or half the government prediction. With no evidence his Buy American compromise with Obama helped get Canadians back to work, we should be rejecting Harper’s claims a similar procurement deal with the EU will create jobs.