Don’t thank Harper for bad ‘Buy American’ deal

Stuart Trew
Hamilton Spectator
March 1, 2010

Eric Cunningham overstates the benefits of the new Canada-U.S. agreement on government procurement.

It’s true the deal will temporarily let Canadian companies bid on U.S. stimulus projects in seven areas where other countries are excluded. But that’s only on about $4 -5 billion worth of the original $280 billion of stimulus money, according to the Canadian Centre for Policy Alternatives.

Access to municipal or state-level construction is not secure. In fact, U.S. cities will still be able to pull Canadian-made pumps and pipes out of the ground or exclude Canadian suppliers with few consequences. Meanwhile, Canadian cities and provinces are bound by legally enforceable WTO rules banning local preferences.

The benefits of buying locally are clear. For example, Hamilton should ask that all steel used to build the Pan Am Games stadium be made in local plants. The Ontario government went this way in its popular Green Energy Act, which ties local content quotas to generous feed-in tariffs for renewable energy producers.

Premier McGuinty smartly excluded the Act from the U.S. procurement deal, but he’s on a slippery slope with the province now committed to WTO rules that frown on local development initiatives.

Local preferences are a rational economic policy with minimal impacts on trade, pursued legally and successfully in the U.S., China and other countries struggling to escape the recession. With Parliament prorogued, the Harper government signed away an important policy option for Canadian provinces. We should be demanding full parliamentary and provincial hearings.

Stuart Trew, Hamilton, Trade Campaigner, Council of Canadians