City staff to recommend a “Buy Non-U.S.” approach

THUNDER BAY – Trump tariffs are back on the council agenda for Monday’s committee of the whole meeting.

City staff will present their report on how the U.S. tariff situation is impacting the municipality's ability to procure goods and services and recommend the municipality take a “Buy Non-U.S.” approach to procurement during the trade war where the existing legislative framework permits and is feasible.

“The U.S. and Canadian economies are so intertwined. If we wanted to calculate the impact of the tariffs, it's nearly impossible to unwind the full impact. There's been some research put forward that says that the capital expenditure budgets or capital expenditure requirements will increase by 2 per cent due to tariffs. That's a very broad number, but that's what some research has shown,” said Keri Greaves, commissioner of corporate services.

The city’s current supply management bylaw already aligns with the Canada Free Trade Agreement (CFTA) which also means a Buy-Canadian or Buy Non-U.S. approach to procurement is well within the municipality's ability to purchase Canadian products.

This would mean that any procurement below $133,800 for goods and services or $334,400 for construction can be sourced from Canadian companies. Anything above, the municipality would have to abide by existing free trade agreements such as the Canada Free Trade Agreement (CFTA) and Comprehensive Economic Trade Agreement (CETA).

“Municipalities are specifically required to follow the CETA, so based on that, we can't hold a buy Canadian approach to procurement over the median value thresholds because that would be in contravention of the CETA,” said Greaves.

The trade war will affect the municipality very differently from the average taxpayer. The public is going to feel the trade dispute when buying groceries, clothing, or electronics.

For the city, Greaves said that general tariffs will mean the cost of “capital infrastructure projects and large equipment, and specialized fleet” vehicles will go up in cost because the municipality can't necessarily procure every component needed for a project or automotive parts “in Canada or domestically.”

He said municipalities use an online bidding system that puts the city’s tenders into a database where companies around the world bid on the work.

Their recommendation is a precautionary measure to ensure escalating costs from the trade war don’t impact their ability to obtain needed equipment or services.

“The best we can do is say we're standing in solidarity with the federal government and provincial governments in advocating against U.S. tariffs. It's such a fluid situation and it's changing day by day,” said Greaves

“The recommendation from administration at this time is that we take a cautious and measured approach, and then continue to monitor and see what happens, what are the policy developments, what are the federal and provincial government responses are going to be.”