Canadian manufacturers and steel producers are urging Ottawa to channel tens of billions of dollars in planned federal spending their way over the next decade.
Given “Buy America” and other protectionist policies, they want the federal government to leverage the power of $47-billion in money for new bridges, roads, transit and other public infrastructure to support Canadian companies.
The proposed strategy to even the playing field with countries such as the United States was laid out in a letter sent to four federal cabinet ministers last month, and signed by three Canadian industry lobby organizations: the Canadian Manufacturers & Exporters, the Canadian Institute of Steel Construction and the Canadian Steel Producers Association.
The letter said that while Canadian public procurement practices offer “essentially open and equal access to foreign bidders,” the same foreign bidders benefit from “protective advantages” in their own domestic markets.
Both U.S. and Canadian steel makers and manufacturers are struggling with a sluggish economy alongside cheaper Chinese imports – which China says is because its producers are more efficient, but which competitors charge is a result of subsidies. Canadian manufacturers argue that Canada still has its door open to trade, while U.S. Buy America policies limit their ability to compete south of the border.
This is taking place even as U.S.-owned subsidiaries such as Harris Rebar – which is controlled by Charlotte, N.C.-based Nucor Corp., a strong proponent of Buy America measures – compete for Canadian public projects.
“Where trading partners are not prepared to extend comparable access conditions to Canadian firms, then Canada should be prepared to support its own suppliers,” says the letter sent last month. “We believe there is scope within [trade] agreements for governments in Canada to use investments in public infrastructure to support Canadian industrial capabilities, particularly in cases where the international playing field is tilted against them.”
It is a timely conversation to have, the groups say, as the federal government negotiates the Trans-Pacific Partnership, and focuses attention on its free-trade deal to remove most tariffs between Canada and the European Union.
Canadian Manufacturers & Exporters chief executive Jayson Myers said the groups are all in favour of free trade and competition, but “fair is fair.”
“Let’s put something in place where it remains competitive, it remains open but at the same time it’s fair – because we’re asking for reciprocal access here,” Mr. Myers said in an interview.
The manufacturers argue that Canadian-sourced products are consistently blocked in U.S. Department of Transportation contracts for public transit, highways and other infrastructure projects.
The groups are asking that Ottawa use Canadian steel, rebar and other construction materials and services for the projects it finances directly – for example, the construction of the new Champlain Bridge in Montreal. They are also asking that the government apply “level-playing policies” to money transferred to provinces and municipalities as part of the 10-year, $47-billion “Building Canada” plan, which Finance Minister Jim Flaherty has called the “largest long-term federal commitment to Canadian infrastructure in our nation’s history.”
Ed Whalen, president of the Canadian Institute of Steel Construction, said a federal policy on reciprocity could generate $500-million per year in additional revenues for Canadian industry.
It’s unclear whether the proposal has any traction in Ottawa. however. Several relevant ministers’ offices declined to comment on the letter. In a speech during a visit to Washington earlier this year, International Trade Minister Ed Fast noted: “Buy America has been a persistent irritant for Canadian industry.”
The groups’ letter comes at the same time Ontario is looking at changes to the way it awards construction contracts, to make it more difficult for non-Ontario companies to win government work.