TORONTO — The Ontario legislature has passed the Fairness in Procurement Act, which the government says gives it powers to respond to protectionist measures taken by U.S. states if deemed necessary.
A March 8 media statement said the act “allows Ontario to take responsive and proportional action to address discriminatory government procurement practices by U.S. subnational jurisdictions.”
The statement identified two pieces of state legislation that could restrict or inhibit Ontario-based businesses from participating in government procurement contracts.
The New York Buy American Act, scheduled to be implemented on April 1, could prevent Ontario iron from being supplied for New York State public works contracts for surface roads or bridges valued at over U.S.$1 million, and the Texas Buy American Act, enacted last Sept. 1, requires all construction contracts awarded by all state government entities to use U.S.-made iron and steel, with some exceptions.
The legislation will give the Ontario government the authority to make responsive regulations, the statement said.
In the case of New York state, proposed regulations would apply to procurements by Ontario government entities for construction, reconstruction, alteration, repair, maintenance or improvement of surface roads and bridges, containing iron, and where the value of the contract is over U.S.$1 million.
In the case of Texas, proposed regulations would apply to procurements by Ontario government entities for the construction, remodelling or altering of any building, structure or infrastructure or supply of material containing iron or steel for those projects, said the statement.
Should a supplier from New York State or Texas be a successful bidder or chosen supplier, the procurement contract must include a provision restricting the supplier from using any iron from New York State that would be permanently incorporated into any surface road or bridge; and, in the case of Texas, the contract must restrict the supplier from using any iron or steel from the state of Texas, the province said.
The proposed regulations would prohibit Ontario government entities from entering into a procurement contract for the construction projects mentioned, unless the contract includes the provisions restricting the use of iron from New York State and iron or steel from Texas.
The proposed regulations would apply to Ontario government entities, but would not apply to any procurement contract resulting from a procurement process initiated by an Ontario government entity before the proposed regulation came into force.
The proposed regulations include options for exemptions from the application of the proposed regulation.
The intent is that a responsive regulation would be revoked if the offending jurisdiction repeals its “Buy American” legislation, or provides Ontario suppliers with an exemption from the application of the legislation, said the statement.
In 2015-16, the Ontario Public Service awarded more than 500 U.S.-based businesses with contracts worth approximately $460 million. This is approximately seven per cent of the $6.4 billion in contracts that the Ontario government awarded that fiscal year. Of this, approximately $160 million in contracts were awarded to 77 New York-based corporations and $16.7 million in contracts were awarded to 52 Texas-based corporations.