Premiers close to deal on ‘Buy Canada’ policy

OTTAWA — Trade Minister Stockwell Day says he hopes all provinces will soon sign on to a commitment not to discriminate against U.S. companies in government procurement.

OTTAWA — Trade Minister Stockwell Day says he hopes all provinces will soon sign on to a commitment not to discriminate against U.S. companies in government procurement.

The federal trade minister said Wednesday he is still hoping to get unanimous agreement from all 10 provinces within a couple of weeks, although he said it may be possible only a majority will sign on.

Time is of the essence because every day we wait, more and more of that U.S. stimulus money is going out the door and we want Canadians companies to have a fair shot at it,” he said in an interview from Singapore, where he was attending a trade conference.

Day said he is prepared to move ahead and submit what is essentially a unilateral peace offering on government procurement even if not all provinces are on board.

The Canadian government has been lobbying for months to get the U.S. Congress to halt Buy America provisions from being tacked on to about US$290 billion earmarked for infrastructure projects as part of the Obama administration’s stimulus package.

So far, Canadian companies complain they have been shut out of bidding for water treatment and school renovation projects financed by federal infrastructure spending, but the lion’s share of the money has yet to be allotted.

Ottawa believes the U.S. lawmakers are using the reluctance of provinces to sign on to international guidelines for free trade in government procurement bids as an excuse to shut Canadian companies out of infrastructure contracts, which are administered at the state and municipal level.

Day said once provinces agree to an open procurement process, he will take the agreement to Washington and seek reciprocal fair trade treatment.

There’s no guarantee, (but) we’ll then be able to say to Congress if you don’t wave that clause, then you truly are collapsing into protectionism,” said Day.

If this isn’t passed, the risk is provinces and municipalities will lose their patience and begin to shut out U.S. bids. We don’t want to see a retaliatory trade war. We know where that goes. Everybody winds out getting hurt.”

Day said he met with U.S. trade envoy Ron Kirk earlier in the day and informed him of Canada’s plans, saying Kirk told him it would be positively received by the White House.

In June, Canadian municipalities gave the U.S. until Oct. 4 to back down on protectionist measures, or face retaliation on municipal bids.

Ontario’s economic development minister, Sandra Pupatello, said her province fully supports Ottawa’s approach, adding that the danger growing protectionism in the U.S. is that it will extend beyond the current stimulus package.

She said she has heard anecdotally from a number of firms that U.S. states are asking bidders to certify they are not using foreign supplies or sub-contractors.

We do not want long term to have Ontario companies cut off lists that generally access activity in the U.S.,” she said.

Ontario and Quebec are the provinces that have the most to lose from the Buy America provisions, but most provinces have some firms that operate south of the border.

Jayson Myers of the Canadian Manufacturers and Exporters said he does not believe that any province is fundamentally opposed to Day’s request.

The delay is likely on technical matters such as the wording of the agreement and the rules around the mediation of any future disputes that may arise.

Myers agrees the issue is urgent. He notes that only about 10 per cent of the U.S. infrastructure stimulus has gone through Congress, so the longer the delay, the greater the risk Canadian firms risk will be excluded from an increasing piece of the stimulus pie.

Day said he has made clear to the provinces and territories that the agreement is interim in nature, applying only for the duration of the U.S. stimulus spending. But Ottawa is also interested in signing a general agreement that would bind provinces to fair trade in procurement.

It is strongest if they (premiers) all sign on, but if one or two don’t, we still have a strong case,” he said.But I think we will have most, if not all of them.”

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