TORONTO – This week, municipalities were informed that if they don’t prioritize the use of Ontario and Canadian products and services, they could face cuts to provincial funding.
In a letter directed to mayors throughout Ontario, Municipal Affairs Minister Rob Flack emphasized “our government’s expectation that municipalities fully comply with Ontario’s Buy Ontario policies.”
“Failure to comply with Buy Ontario requirements will force us to reconsider provincial funding made available to municipalities,” Flack cautioned.
WHAT IS THE PROVINCE TALKING ABOUT?
Flack seems to reference the Municipal Buy Ontario Procurement Directive, which was issued this spring following the passage of Bill 72, the Buy Ontario Act, last December.
This law permits the province to provide directives on how public-sector entities should acquire goods and services necessary for their operations or infrastructure projects – a spending amounting to $25 billion annually.
“Adherence to these requirements is not optional. It is an absolute must. Municipalities must use every available opportunity to prioritize Ontario and Canadian goods and services,” Flack wrote, urging municipalities to evaluate their supply chains for chances to switch to Canadian options.
The province also released another Buy Ontario directive aimed at provincial government agencies and other broader public-sector organizations.
WHAT DO MUNICIPALITIES ACTUALLY HAVE TO DO?
The Municipal Buy Ontario Procurement Directive specifically targets fleet vehicles and capital infrastructure expenditures, including purchases like new transit vehicles.
Municipalities are mandated to buy or lease vehicles made in Ontario for their fleets, especially when acquiring passenger vehicles. If there isn’t an available vehicle from Ontario, there are other guidelines dictating which suppliers may be chosen.
The rules regarding infrastructure projects are more complex.
For large infrastructure undertakings, municipalities request bids from companies detailing how they would carry out the project and what costs would be involved for the city.
According to the directive, preference will be given to the company whose bid includes “the highest proportion of Ontario-made goods and Ontario services in their domestic supply chain.”
This preference allows that company a chance at winning even if their bid isn’t the lowest one submitted, as long as it doesn’t exceed 10 percent more than the cheapest bid.
Additionally, municipalities must complete extra paperwork by providing records of all purchases under this directive back to the provincial government.
WHAT ABOUT GOODS AND SERVICES?
Currently, the municipal directive does not extend wider Buy Ontario regulations on general purchases of goods and services by municipalities; however, that may soon change.
In his letter, Flack stated that plans are underway to expand the Building Ontario Businesses Initiative (BOBI) into municipal operations.
BOBI is already incorporated within the province’s Buy Ontario guideline for government agencies and broader public-sector organizations. It requires them to favor businesses from either Ontario or Canada when making purchases based on specific spending thresholds:
Under $139,000: Preference goes toward businesses in Ontario $139,000 up until $368,000: Preference goes toward Canadian businesses $368,000 or more: Preference is given based on businesses from Canada’s trading partners
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ARE MUNICIPALITIES IGNORING THE RULES?
The Association of Municipalities of Ontario reports no significant non-compliance with these provincial directives among municipalities.
“Municipalities are already doing their part. Over 98 percent of procurement for non-construction goods and services came from businesses with Canadian addresses prior to implementing the Buy Ontario Act,” said AMO president Riley Brockington. He added that these new regulations “are adding time, cost and complexity” into procurement processes.
Victoria Mirlocca, chair of the Ontario Public Buyers Association-which supports public-sector entities in procurement-mentioned many municipalities “were already making provisions” for prioritizing local buying before these rules arrived.
“It’s the paperwork that’s caught us off guard; we’re figuring out how best we can implement it,” she explained.
In his letter,Flack acknowledgedthat “many municipalities are already taking stepsto maximizetheir use of Ontarioand Canadian content.”
CAN EVERYTHING MUNICIPALITIES NEED BE BOUGHT IN CANADA?
Not necessarily.
Mirlocca mentioned work is ongoingon creating a framework that helps her organization’s municipal members acquire additional goods and services in both Ontarioand Canada; however, information technology remains a challenge.
“Microsoft is our backbone,”she said.“Will Microsoft still be acceptable? There’s a Microsoft Canada. We need clarity on where government stands regarding this.”
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