Interprovincial trade barriers


                Saskatchewan cries foul about Infrastructure Ontario’s ‘local knowledge’ preference

    Ontario Construction Report staff writer

    The interprovincial trade barriers issue – long a challenge between Ontario and Quebec – has spread westward, with Saskatchewan premier Brad Wall’s recent suggestion that his province may retaliate for Infrastructure Ontario’s (IO) “local knowledge” preference provisions.

    This shift, a perhaps unintended consequence of IO’s large-scale project bundling and the loss of local business opportunities to gigantic multinational corporations (mainly European), brings back memories of Ontario contractors complaining bitterly about their inability to access the highly-regulated Quebec market, while Quebec contractors and sub-trades routinely cross into Ontario, especially for work in eastern Ontario’s residential construction industry.

    In a published report, Wall told The Globe and Mail that his government will “react . . . and level the playing field for our companies” if Ontario doesn’t change its local preference rules. “If we can’t get improvement on that front we are not going to be Boy Scouts about that in Saskatchewan.”

    There are conflicting reports about Ontario’s government reaction to Saskatchewan’s concerns, where 10 out of 100 points for IO projects are awarded based on “local knowledge”.

    In one report, Economic Development and Infrastructure Minister Brad Duguid said that “these discussions have to take place among the premiers and among the provinces and Ontario is very much in favour of constructive discussions”

    “We haven’t ruled anything out; we haven’t ruled anything in,” he said.

    However, in the Globe and Mail, Duguid was quoted as saying: “When it comes to infrastructure procurement, our government believes that experience working with local firms is important because of the local job creation that comes with new infrastructure.”

    The local knowledge policies were introduced after Ontario-based industry associations complained about the unintended impact of bundling projects into larger and larger mega-projects, requiring consortia with (often) multi-billion dollar financing and bonding capacities – well beyond the level available for all but the largest contractors, architects and engineers.

    The provisions were designed to ensure that local resources would be included in the infrastructure initiatives, in place of sending virtually all of the money (and profits) offshore.

    “When it comes to the Government of Ontario and its agencies making significant investments in core public infrastructure, Consulting Engineers of Ontario is fully supportive of the local knowledge policy,” said the associations’ chief executive Barry Steinberg. “Our members strongly support the free and efficient movement of goods and services within Canada. Interprovincial free trade will help ensure a more progressive national economy. However, when it comes to core public infrastructure, local knowledge of the market is equally important.”

    To spur recovery of the provincial economy Ontario has embarked on a $130 billion, 10-year commitment to infrastructure investment. Engaging local firms is a central element of this objective as it will help local economies create good jobs, the CEO news release said.

    “Queen’s Park is right to require local knowledge. This policy is consistent with our professional obligation to ensure quality of innovation and design. Local knowledge empowers our members as they provide value-added professional services and act as agents and advocates for their clients. That is just not something that can be assured by a firm unfamiliar with community needs and has little, if any, intimate knowledge of and experience in the Ontario market.”


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