Canadian trade deals are holding back progressive procurement strategies.
Recent trade agreements are holding back provincial and federal efforts to get the most bang out of public bucks spent on infrastructure, goods, and services, claims a new report from Noah Fry for the Canadian Centre for Policy Alternatives.
“Bye Buy Canada” looks at three recent procurement reforms in Canada—the federal government’s Policy on Social Procurement, Buy Ontario, and Buy Québéc Priority—and shows how Canada’s procurement-related trade commitments in agreements are limiting the potential of each policy to maximize the social value of public spending.
Social procurement is the use of (usually) public entity purchasing to create social value. Rather than simply choosing a bidder based on the lowest cost, public bodies with a social procurement strategy may consider other things, like localized production, socially conscious sourcing, and higher compensation for workers.
Canadian governments have been experimenting with different forms of social procurement for a couple of decades. Earlier attempts at social procurement, however, were narrow and not concerned with social adjustment costs associated with globalization. More holistic attempts at social procurement have emerged in Canada within the last two years. In response to economic anxieties and U.S. efforts to draw investment, the federal, Ontario, and Québéc governments have established social procurement strategies.
“Unfortunately, Canada has hamstrung itself in these efforts through international trade deals that can block potential offsetting responses to new economic and social risks. Public procurement is a prime example,” says Fry.
“Ultimately, to unlock social procurement’s greatest potential, Canada and the provinces would need to re-evaluate their current trade commitments in deals like the Canada-EU CETA and the internal Canadian Free Trade Agreement (CFTA),” says Fry. “Going forward, Canadians should be wary of making any further procurement concessions in new trade agreements with the U.K., Indonesia and ASEAN, for example, if these commitments undermine the potential of social adjustment programs, including social procurement.”