Letter to Canada’s Premiers and Territorial Leaders Regarding the Impact of ‘Buy American’ Restrictions

June 1, 2009

The following letter was delivered today to Canada’s premiers and territorial leaders:

Dear Premier,

We are writing on behalf of businesses across Canada that are now being excluded from state and local procurement markets in the United States as a result of Buy American provisions contained in recent legislation.

The American Recovery and Reinvestment Act, which became law in February, requires all iron, steel, and manufactured goods procured for public works funded under the Act to be made in the United States.  We are now seeing similar restrictions appear in other bills before the United States Congress.

Canadian manufacturers of steel and other construction materials, water and wastewater treatment technologies, heating and ventilation systems, energy technologies, and medical devices are currently being hurt by Buy American restrictions.

While Buy American preferences have been used by state and local authorities in the past, the restrictions now being imposed by United States federal legislation are far more punitive.  They effectively ban Canadian-made products from all state and municipal infrastructure projects that use even a single dollar of funds authorized under the laws in question.  Many industries, such as the water treatment sector, have until now been able to bid on U.S. infrastructure projects without hindrance, enjoying the same unfettered access that American companies enjoy in Canada.

The United States Government has said that it will comply with its international trade obligations, but this offers no protection for Canadian companies since our provinces and municipalities are not party to the NAFTA or WTO government procurement agreements.  As a result, Canadian manufacturers are losing contracts – and communities across Canada are losing businesses, jobs, and investment.

There is also a growing backlash within Canada.  A resolution will be considered by the Federation of Canadian Municipalities in June that would keep municipal infrastructure markets in Canada open to suppliers from other countries only if reciprocal access is granted to Canadian exporters.

Protective market restrictions are not the solution to economic problems in either Canada or the United States.  Damage will be done on both sides of the border if discriminatory procurement restrictions continue to be enacted.

We believe that the Canadian Government can and should propose a solution to the United States Administration that would safeguard jobs in both countries.  One possible short-term solution would be for both Canada and the United States to make every effort (including the use of regulatory guidance) to ensure that federal procurement standards under the NAFTA are applied to federal funds spent by sub-national authorities.  Another possible option would be to encourage the United States Government to issue a public interest waiver on a sectoral basis (e.g., in the water infrastructure sector).

However, it is clear that the most effective response to the Buy American provisions would be for Canada to seek a more open procurement agreement.  We urge you to explore signing onto the reciprocal WTO Agreement on Government Procurement and to pursue an even more ambitious agreement with the United States covering provincial/state/territorial and local governments.

We are asking for your support to help avert the trend toward rising protectionism.  We ask you to engage in urgent discussions with the federal government to resolve this growing challenge.  We also ask that you and your Government commit to engage in and support negotiations to keep provincial/territorial/state and local procurement markets open to suppliers from both countries.

Respectfully,

Jayson Myers
President
Canadian Manufacturers & Exporters

Thomas d’Aquino
Chief Executive and President
Canadian Council of Chief Executives

Perrin Beatty
President and CEO
The Canadian Chamber of Commerce

Claude Lajeunesse
President & CEO
Aerospace Industries Association of Canada

Christian L. Van Houtte
President and Chief Executive Officer
Aluminum Association of Canada

Jerry Engel
President
AMC – Agricultural Manufacturers of Canada

T. Howard Mains
Canadian Public Policy Advisor
Association of Equipment Manufacturers

Gerry Fedchun
President
Automotive Parts Manufacturers’ Association

Barry Gander
Executive Vice President
Canadian Advanced Technology Alliance

Timothy I. Page
President
Canadian Association of Defence and Security Industries

Jay Nordenstrom
Director, Government and Industry Affairs
Canadian Association of Railway Suppliers

Richard Paton
President and Chief Executive Officer
Canadian Chemical Producers Association

Shannon Coombs
President
Canadian Consumer Specialty Products Association

Murray Abramovitch
President
Canadian Die Casters Association

John Bachmann
Chairman
Canadian Fluid Power Association

Brad Wannamaker
President
Canadian Foundry Association

Bob Elliott
President
Canadian Printing Industries Association

Ron Watkins
President
Canadian Steel Producers Association

Horst Schmidt
President
Canadian Tooling & Machining Association

Don Moore
Executive Director
Canadian Transportation Equipment Association

Pierre Boucher
President and Chief Executive Officer
Cement Association of Canada

Milos Jancik
President and Chief Executive Officer
Electro-Federation Canada

Nancy Croitoru
President & CEO
Food & Consumer Products of Canada

Wayne Bassett
Chairman, Canadian Council
Metals Service Center Institute

Robert Kirk
General Manager
Printing Equipment Supply Dealers’ Association of Canada

J. Clifford Mackay
President
The Railway Association of Canada

Ralph Suppa
President
Canadian Institute of Plumbing and Heating

Mark Badger
President and CEO
Canadian Plastics Industry Association