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Adam Radwanski

Buy Ontario Add to ...

In his column today, Jeffrey Simpson sounds an optimistic note about provinces' attitude toward (free) trade:

"From Canada's perspective, the push against Buy American is good domestic politics and sensible policy, even if the push doesn't succeed (as is likely). But the push reveals a welcome change of attitude by the country's provinces, a change not sufficiently noticed in Canada.

Provinces have been pressing the Harper government to take up Buy American, as Mr. Harper and his ministers have repeatedly done, knowing they're having to discipline themselves against their parochial instincts to favour things local. This discipline is being shown in interprovincial deals on purchasing and procurement between Ontario and Quebec, B.C. and Alberta, and among the Atlantic provinces.

More important from a foreign policy perspective, the provinces have encouraged Ottawa to negotiate a sweeping free-trade agreement with the European Union."

For the most part, that optimism is no doubt well-founded. But next week, we'll likely see some evidence of just how difficult it is for provinces to avoid protectionism altogether.

Presuming that he's still on the job by then, George Smitherman is expected to outline one of the most important aspects of Ontario's implementation of the Green Energy Act - the "feed-in-tariff" program that will provide a premium to producers of alternative energy. It's an extremely complex topic that I'll hopefully delve into in more detail in print at some point, but it bears noting that there appears to be a not insignificant protectionist aspect to it.

Expectations are that, in the first year, companies will need to guarantee their energy sources are at least 20 per cent made-in-Ontario in order to qualify for the premium. That might not be all that big a deal, given that some set-up will obviously need to be done there, even if most of the construction and the supplies are from somewhere else. But if, as rumoured, that requirement becomes as high as 50 per cent in subsequent years, it's going to be a very big deal indeed - not just for foreign or multinational bidders, but also for those from other Canadian provinces. (The numbers here remain to be confirmed; it may be that they're not standard across the board, with solar - which will fetch a higher premium - having a higher made-in-Ontario requirement than wind.)

You can argue that it's sound policy for the government to ensure that its green energy initiatives create jobs in Ontario; in fact, it might be impossible for it to make the economic case for green energy if that wasn't part of the equation. But it underscores the difference between what the provinces say about protectionism and what they sometimes do.

Follow on Twitter: @aradwanski

 

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