New Buy Ontario policies could put added financial pressure on municipalities

Luke Edwards, Post Contributor

When municipalities buy new vehicles, they’ll now have to give special consideration to Ontario and Canada-made products, and soon that will expand to include capital infrastructure projects.

The Buy Ontario Act, which was passed at Queen’s Park last year, is now coming into effect. Starting in April municipalities had to demonstrate efforts to secure light duty vehicles that were made in Ontario or Canada or included parts made in Ontario or Canada, and in mid-May they’ll have to do the same for the construction and renovation projects of assets like roads, bridges, and municipally owned buildings.

Giving an update to council at the April 28 meeting, Norwich CAO Matt Smith said the vehicle portion of the act won’t impact them too much, though the capital infrastructure piece could.

However, with only a few weeks before the rules come into effect, there remains a healthy amount of uncertainty.

“In true provincial style, they haven’t really given us a good explanation of how that comes into effect on May 15 or the instructions we need in order to do it,” he said.

“But in essence there’s going to need to be a new section to our procurement documents where bidders will have to fill in the information about their supply chain and all of their subcontractors’ supply chains.”

The rules force municipalities to give preferential treatment to bids that demonstrate a higher percentage of Canada-based procurement as long as it’s within 10 per cent of the lowest bid.

Not only does this have the potential to add financial strain, but Smith said there’s potential it will dissuade contractors from even bidding.

“My biggest concern is that some of our local bidders may not wish to, or find it too hard, to complete the supply chain documentation that we’re going to have to ask them to complete,” he said.

Some projects, like much of the road work, won’t likely be affected since the local bids are naturally lower. But Smith said there could be challenges with some larger building projects.

The vehicle portion of the rules came into effect in mid-April, and uses a tier-based procurement system. Preferred vehicles are fully Canadian. However, since Canadian production lines don’t offer everything a municipality could need, a second tier prioritizes vehicles that have Canadian parts.

“If we’re not purchasing something from either tier 1 or tier 2 in vehicles, we’ll have to be able to demonstrate why we couldn’t do that,” Smith said, adding none of the vehicles classified in tier 1 meets the township’s needs.

Councillors expressed worry about the financial impacts.

“Are they (the province) looking at any subsidies for municipalities? This really puts a stranglehold on a lot of lower municipalities that just don’t have the funding or resources,” said Coun. Shawn Gear.

Smith said that topic has been brought up in just about every meeting he’s been a part of.

“And the answer is no, there is no funding associated with this from the provincial government,” he said.