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Ontario & Quebec agree to align with CETA procurement provisions

CETA threatens local job creation

One of the Top Ten Reasons Why CETA is Bad for Canada.

The procurement chapter in the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) sharply curtails the ability of provincial governments and municipalities to support their economies by favouring local companies with major goods and services contracts.

In May 2015, a Government of Ontario media release noted, “Last fall, the Premiers of Ontario and Québec signed a memorandum of understanding confirming their intention to reinvigorate and strengthen the trade relations between the two provinces. They committed to explore opportunities to align the chapters of the Ontario-Québec Trade and Cooperation Agreement (OQTCA) with those in the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). Ontario and Québec have now reached an agreement in principle on a revised OQTCA government procurement chapter.”

Le Devoir now reports (in French), “Quebec and Ontario will not wait for the ratification of the free trade agreement between Canada and Europe to make its rules on public contracts more flexible. …These new rules should take effect in both provinces on January 1 for departments and September 1 for municipal networks, education and health and crown corporations. Yet elected bodies still have still not ratified the agreement between Canada and the European Union one year after negotiations were completed. In fact, we still do not know when the members of the House of Commons in Ottawa will only begin to address CETA to decide its eventual ratification (or rejection).”

The provincial governments explain that their goal is to ensure that Ontario and Quebec businesses will have access to public markets in Ontario and Quebec at least as favourable as that which has been granted to European companies in the yet to be ratified ‘free trade’ agreement with Europe. It is currently believed that CETA could go before the European Parliament for ratification in late 2016 or early 2017.

CETA would mean that MASH sector entities (which includes municipalities, municipal organizations, academic institutions, schools and health and social services organizations) will be prohibited from adopting minimum local contact requirements, insisting on local training quotes, or applying any other conditions that encourage local development on goods and services contracts above about $328,000, utilities expenditures above about $657,000, and construction projects above $8.2 million. According to Government of Ontario officials, these thresholds cover roughly 80 per cent of the value of all government procurement in the province.

The Canadian Centre for Policy Alternatives has commented, “The procurement commitments that Canada has agreed to in CETA are extensive and will substantially restrict the vast majority of provincial and municipal government bodies from using public spending as a catalyst for achieving other societal goals, from creating good jobs to supporting local farmers to addressing the climate crisis. …It is [also] highly misleading to suggest CETA will create significant new opportunities for Canadian companies to bid on and win public contracts in the EU since nothing is currently prohibiting them from doing so.”

The Harper government and provincial governments made these commitments despite widespread resistance to the deal, notably from more than 85 municipalities that passed resolutions either expressing concern about the deal or demanding to be excluded from its provisions. In November 2013, a poll commissioned by the Council of Canadians found that 77 per cent of Canadians oppose the ‘buy local’ ban in CETA. That poll found that even among people who “strongly support” the idea of free trade with Europe, 63 per cent believe local governments should continue to have the right to prefer Canadian or local bids on public contracts.

The Trudeau government supports CETA and the prime minister has directed his trade minister Chrystia Freeland to “implement” the deal.

The Council of Canadians is calling on the federal government, provincial governments and municipalities, as well as the European Parliament and European Union member states, to reject the ratification of CETA.

For more on our campaign, please click here.