Ford Government Prioritizes Buying Ontario First with New Legislation

This afternoon, Stephen Crawford, Minister of Public and Business Service Delivery and Procurement, introduced the Buy Ontario Act, which mandates the prioritization of Ontario goods and services first by all public sector organizations, municipalities and contractors and subcontractors working on the government’s $220 billion capital plan. Several of the initiatives in this Act would be familiar to Ontario businesses and the additional effect of this legislation is that it places all those directives under one roof to administer and enforce.

The proposed legislation means those contractors and subcontractors working with the government to build public infrastructure such as transit, highways and hospitals will be mandated to prioritize Ontario products like steel, lumber, cars, and trucks first, followed by Canadian goods and services. The government will be developing a list of Ontario and Canadian vendors for infrastructure procurement and processes.

The Act also enables to government to issue directives and regulations related to specified procurement policies, procedures or standards to help manage the ongoing trade war as it continues to evolve.

Key Highlights

Through the proposed Buy Ontario Act, the province will be enabled to:

• Mandate all public sector organizations, including ministries, agencies, the broader public sector and municipalities to prioritize first Ontario and then Canadian goods and services.
• Outline requirements for how these organizations are expected to prioritize first Ontario and then Canadian goods and services in contracts with vendors, including subcontractors.
• Ensure compliance of the new requirements through Minister required reviews and penalties that include the withholding of funds, vendor performance management and vendor barring from future procurement.
• Allow for outside of Canada procurement if, Ontario or Canadian goods and services cannot be procured at a reasonable cost or timeframe that would maintain value for taxpayers. The Minister did highlight in his press conference that while price does matter, value is more than just cost.

Analysis

‍Today’s announcement is another example of the Ford government’s seriousness about being more self-reliant in response to the United States Administration antagonistic trade posture. It's also an indication that the province, highlighted by its low GDP growth projections in the Fall Economic Statement, is focused on preparing for economic uncertainty and protecting Ontario jobs and support Ontario businesses.

The success of the Buy Ontario Act will hinge on how it is implemented, in effect where will cost and value intersect. The province will need to meet the challenges of designing procurement systems that weigh the preference for Made in Ontario, enforce compliance and support the development of local supply chain, all while delivering value for Ontarians. The pressure point will be where the likely higher, incremental cost meets provincial benefit. Notionally, Ontarians and Canadians are supportive of marginal increases in the name of local supply chain, however where that threshold is and the ability to quantify and justify value will define whether the Act strengthens Ontario’s economy over time.

The next step for the government is to develop the specific requirements and regulations around some components of the Buy Ontario Act. Stakeholders can expect additional consultation and announcements on details around the measures outlined today.