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The Power of Purchasing: Economic study supports “buy local” as Harper tries to ban it in EU trade deal

In a timely reminder of where the Canada-EU Comprehensive Economic and Trade Agreement goes terribly wrong, a new report out of British Columbia explains the importance of “buy local” policies to the strength of communities. The report, The Power of Purchasing: The Economic Impacts of Local Procurement, is a co-production of the Columbia Institute, LOCO BC and ISIS Research Centre. Its astounding, though not surprising, main finding is that municipal purchasing from locally-based suppliers “creates nearly twice as much benefit to the local economy as buying from multinational chains.” “Canadians are concerned about sustainability, and governments and institutions are looking for ways to strengthen their local economy. Finding opportunities for increasing local procurement can address all of these goals,” said Charley Beresford, executive director at the Columbia Institute, in press release about the report. “When local purchasing dollars are re-circulated in the local economy they create good jobs and build local business,” added Joanna Buczkowska, managing director at the ISIS Research Centre, part of UBC’s Sauder School of Business. “It’s a very meaningful way of growing local economies while supporting our communities.” The report uses the example of an office supplies company, Mills Basics, to show the benefits of local sourcing for municipalities, school boards and other public agencies. In B.C. alone, local governments and school boards spend about $6.7 billion annually on public procurement, according to the study. Mills Basics recirculates 33.1 per cent of its revenues to other B.C. businesses compared to between 16.6 and 18.7 per cent for multinational competitors. “This presents a 77 to 100 per cent economic advantage for B.C. from buying local,” the report says. “Using provincial multipliers to translate this into jobs shows that this leads to a 80 to 100 per cent increase in jobs per million dollars spent.”


While trade agreements are not mentioned, the report explains that “the conventional wisdom governing procurement is that it should be unbiased toward potential suppliers and provide the best value for money, with value often defined narrowly in terms of the lowest price or bid for a contract.” This is the CETA model in a nutshell. Any municipalities covered by procurement rules in the EU trade deal will have to treat bids from France as equal to bids from their backyard. If they don’t, they could find themselves in court. An editorial in the Powell River Peak thinks this is a problem. “CETA, which critics contend has more to do with corporate rights and profits than trade, has the ability of prohibiting municipalities from supporting goods and services that favour Canadian producers,” writes the paper this week, referring to the new B.C. report on the value of local spending. “European corporations want the same access to government business as local companies. This will only hamper the ability of municipalities to support the local economy.” On Monday, Canada’s trade minister, Ed Fast, told municipal councillors attending the Federation of Canadian Municipalities meeting in Vancouver that communities will retain the right to buy locally but only on small contracts (less than $350,000 for goods or services, or a low $8.5 million for construction projects). Above that threshold, CETA will permanently take away the ability of cities to get the most bang for their buck on the bigger purhcases, as the Columbia Institute, LOCO and IBIS paper shows. (The Council of Canadians Vancouver-Burnaby chapter was at the FCM last Friday handing out hundreds of ‘I Say NO to CETA’ buttons to councillors on their way into the meeting – see photo.)


Prime Minister Harper will leave tomorrow on a week-long trip to Europe, where he is expected to conclude (or very nearly conclude) the CETA negotiations and sign a deal in principle that no one will have seen. We have seen many leaked documents from the negotiations, however, so we know that municipal governments are covered by these procurement restrictions. What we don’t know is how extensively their spending will be covered (e.g. if energy or transit purchases are included, or other big projects where buying locally makes a lot of sense). If you have not yet approached your local councillor or mayor about the EU deal and your concerns about how it will ban buy local policies, it’s not too late. You can find resources to help you do that, as well as a map of communities that have passed motions opposing CETA, on our website here. The City of Duncan, BC is the most recent (May 21) to vote for a permanent exemption from the Canada-EU deal. If Harper does conclude CETA negotiations (in principle) this month, it will be even more important for us to make sure that communities who requested to be excluded from the deal have that option. To new report The Power of Purchasing can be read here.