Buy American deal: good-bye municipal and provincial sovereignty!

OTTAWA—The tentative Buy American deal fails to gain a meaningful exemption for Canadian suppliers from provisions in the U.S. stimulus package while permanently curtailing provincial and municipal procurement sovereignty, says a new analysis of the deal from the Canadian Centre for Policy Alternatives (CCPA).

“The agreement is highly unbalanced and provides significantly better access for U.S. suppliers to the Canadian procurement market than for Canadian suppliers to U.S. stimulus projects,” says senior CCPA trade researcher Scott Sinclair.

According to the analysis, Canadian suppliers have a brief opportunity to compete for an estimated $4 to 5 billion US of federally funded stimulus projects, representing less than 2% of the approximately $275 billion US of procurement funded under the Recovery Act. In return, Canada has guaranteed U.S. suppliers access to a range of provincial and municipal infrastructure spending projects until September 2011, estimated to be valued at more than $25 billion Cdn.

“Most significantly, Canada has bowed to U.S. pressure to permanently bind purchasing by Canadian provincial and municipal governments under the WTO agreement on Government Procurement,” says Sinclair. “This proposed deal will prevent Canadian provincial and municipal governments from preferring local goods or suppliers while leaving Buy American policies almost fully intact.”

“The Harper government has taken advantage of the economic crisis to justify what it has wanted for a long time—more private access to public sector resources and further restrictions on the ability of all levels of governments in Canada to negotiate local benefits when the procure goods and services.”