Just as Canada is moving forward to a trade treaty with the 28 nations of the European Union, Premier Kathleen Wynne of Ontario is resolutely moving backwards, preparing to strengthen a two-year-old preference for construction companies with “local knowledge.” The idea is to favour Ontario firms, and create obstacles for those from other provinces, and other countries.
In his dying days as premier, Dalton McGuinty introduced a change to the bidding process for contractors used by Infrastructure Ontario, an agency overseeing billions of dollars’ worth of government contracts.
All bids are scored out of 100 points, with 10 points awarded for “local construction knowledge of Ontario and regional markets.” It’s a sneaky way of favouring Ontario firms, since “local knowledge” is said to be “possessed by Ontario contractors or garnered through experience working in Ontario.” A project must also include resourcing “in the Ontario market, including trades, project management, regional and site supervision.”
This isn’t free trade. It’s the opposite. No wonder that Clive Thurston, president of the Ontario General Contractors Association, is “very supportive.” Likewise, Barry Steinberg, the CEO of the Consulting Engineers of Ontario, declared it “a great first step.” It is reminiscent of Adam Smith’s warning about what happens when “people of the same trade meet together,” with unhappy consequences for the public interest.
The World Trade Organization rightly struck down a local-content requirement in Mr. McGuinty’s Green Energy Act and the Feed-in Tariff program. This latest trick was pulled from the same bag of protectionism and provincialism.