PRESS RELEASE
For Immediate Release
June 10, 2009

“Buy America” boogeyman no reason for provinces to renounce powers over procurement

Provinces are gambling away economic powers unnecessarily and succumbing to overblown fears about the impact of Buy America polices on Canadian companies by agreeing to seek a reciprocal procurement liberalization agreement with the U.S., warn Maude Barlow, national chairperson of the Council of Canadians, and Paul Moist, national president of the Canadian Union of Public Employees, in a letter sent to all premiers today.

"In response to 'Buy America' clauses in the U.S. stimulus legislation the federal government and Canadian industry groups are urging the provinces to give up their constitutional powers over provincial and municipal procurement,” write Barlow and Moist. “We contest this proposal, which we consider an attempt to further deregulate local and provincial economies with little if any demonstrable benefit to either the companies who have been shut out of U.S. infrastructure contracts or the Canadian cities and towns in which these companies operate.”

“A much more effective way to protect Canadian jobs while developing our local, regional and national economies would be to significantly boost and expedite municipal infrastructure investment and to encourage local contracting,” they add.

While some concern over lost contracts in the United States for Canadian exporters and service providers is reasonable, the recent panic from the federal government and the Canadian business lobby fails to recognize that the Buy America provisions in the American Recovery and Reinvestment Act are temporary and completely legal under WTO and NAFTA rules. Previous attempts to bind sub-national governments to international investment rules failed when North America’s cities, states and provinces rejected the proposed Multilateral Agreement on Investment in the late 1990s.

"Contrary to what the federal government and Canada's manufacturing lobby would have us believe, the freedom to implement local or Canadian procurement is not an oversight that needs to be fixed through more binding international or inter-provincial agreements, but rather an economic strength because it allows local and provincial governments to be innovative in how they manage their economies and responsive to the needs of local communities," write Barlow and Moist.

A much better approach, they suggest, would be for the Harper government and provinces to encourage Buy Canada policies while expediting public money to desperately needed infrastructure projects across the country.

"Think of the jobs that could be saved and profits earned by Canadian companies participating in major federal and provincial infrastructure projects," they write. "There would be no need to worry about 'Buy America' clauses in the U.S. because there would be so much business here at home."

The letter also notes that the Harper government has other motives for wanting to liberalize sub-national procurement and regulatory powers – it is a condition of the European Union before it will sign a new trade, investment and labour mobility agreement with Canada.

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For more information:

Dylan Penner
Media Officer, the Council of Canadians
613-795-8685
dpenner@canadians.org