Evidence of meeting #2 for International Trade in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was procurement.
A recording is available from Parliament.
3:45 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
But yes or no, do you have those estimates, and can you provide us with the estimated value?
3:45 p.m.
Director, North America Trade Policy, Department of Foreign Affairs and International Trade
All we have is the information that is found in the recovery act, as I mentioned, which allocates the funding to various programs, and what is available on the transparency websites of the U.S. government.
3:45 p.m.
Director, North America Trade Policy, Department of Foreign Affairs and International Trade
Well, that's the information that's available. For the reason I explained before, it's very difficult to go beyond that information because it's not reported or calculated in ways that we can manage from a traditional economic perspective.
3:45 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
At the time of the signing of the agreement, did the Canadian government have access to recent estimates of the value of U.S. contracts under the U.S. recovery act that would be open to Canadian firms? Do you have that information?
3:50 p.m.
Director, North America Trade Policy, Department of Foreign Affairs and International Trade
When we were trying to work with the numbers and the information that was there, one of the things we found on procurement reporting was that the reporting lists the prime contractors on the basis of their addresses. So it doesn't distinguish where the company is from and it doesn't take into account sub-contract suppliers. And traditionally Canadians have been second-, third-, or fourth-level suppliers; they're not the prime contractor. So that information is not available for more recent--
3:50 p.m.
Liberal
3:50 p.m.
Director, North America Trade Policy, Department of Foreign Affairs and International Trade
From what we've seen.
3:50 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
At any point during the negotiations did you have access to the estimates of the value of the Canadian contracts that would be open to U.S. firms under the temporary agreement?
3:50 p.m.
Director, North America Trade Policy, Department of Foreign Affairs and International Trade
We've talked with provinces about their scope and their projects. Those numbers are very much provincial. In this case it's provincial procurement we're talking about, so it would be for the provinces to address those questions.
3:50 p.m.
Liberal
3:50 p.m.
Director, North America Trade Policy, Department of Foreign Affairs and International Trade
The reporting on procurement is done on a different basis in different areas or in different jurisdictions, both in the U.S. and in Canada. Not everybody requires the same information or in the same way or on the basis of the same..monthly or yearly. So it's very difficult to put together aggregate estimates.
3:50 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
Okay. So you didn't have that information.
In terms of future U.S. spending bills, do you agree with Canadian stakeholders--for instance, the Canadian Manufacturers and Exporters--when they recognize that there is an increasing number of U.S. spending bills for infrastructure that are covered by Buy American types of clauses? Have you analysed that in terms of the number of spending bills?
3:50 p.m.
Director, North America Trade Policy, Department of Foreign Affairs and International Trade
We are of course looking at the bills being introduced in Congress, and we're working with our embassy to track the information that's becoming available. With respect to which bills have been passed to date, I don't think there are any, from my perspective. But we are of course following all the ones that are introduced, to ensure that we can....
3:50 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
On the WTO GPA , under annex 2, you're right, there are 37 states that have signed on, but there are very significant carve-outs. For instance, in Idaho there's a central procurement agency, which includes basically all government procurement, including all colleges and universities. Iowa has the Department of General Services, our equivalent of Public Works, and the Department of Transportation. Maryland has pretty much every department. Massachusetts has a long list of departments. New York has all state agencies, state university systems. Nebraska has a central procurement agency. In Pennsylvania, pretty much every department is excluded.
There are also overall exemptions. For instance, under the notes to annex 2: “(5) This agreement shall not apply to restrictions attached to federal funds for mass transit and highway projects”; “(1) For those states marked by an asterisk with pre-existing restrictions, the agreement does not apply to procurement of construction grade steel”.
When you say that 37 states have signed on, would you agree that there are still very significant carve-outs within the WTO GPA that are going to continue to deny Canadian access to that government procurement? For instance, under that, we can't compete for any deals or any contracts that take federal funds for mass transit or highway projects. Have you compared the carve-outs for American states?
You noted a few carve-outs for Canadian provinces. I've looked at those. They seem pretty minor compared to these carve-outs for American states. Have you compared those in terms of value?
3:55 p.m.
Director, Multilateral Market Access, Department of Foreign Affairs and International Trade
Yes, we did. We are aware that there are quite a few carve-outs in the U.S. coverage.
We worked very closely with the provinces and territories to put this offer together. It's essentially their offer. I think it is reflective. Ontario and Quebec both have taken specific exclusion on the mass transit. However, it should be noted that in the general notes we have the equivalent carve-out to the American restrictions attached to mass transit. We have the equivalent to preferences restrictions on highway projects. We took an equivalent exclusion that doesn't apply to preferences or restrictions associated with programs promoting the development of distressed areas. We also took an exclusion for procurement intended to contribute to the economic development within a number of provinces. The agreement does not apply to any measure that's adopted or maintained with respect to aboriginal peoples. We also took an exclusion of all the ones that are marked by an asterisk for goods purchased for representational and promotional purposes or services or construction purchased for representational or promotional purchases.
There's note 6. If you want an explanation on note 6 I can get into that. That was to be very clear that it's only the procurement by an entity that's listed under one of the provinces. That actually applies for all provinces, except Ontario and Quebec. Often some of the entities that are listed do procurement on behalf of school boards, social services entities, and hospitals. This note is to exclude such procurement from the agreement. Therefore, municipal, academic, social services, or hospitals are actually excluded from the agreement on government procurement to match the U.S. exclusions of local.
Then we have the exact note 3, which is our note 7 from the U.S. coverage. We've added a note to be clear that the agreement does not apply for procurement that's made by a covered entity on behalf of one that is not covered. The goods thing is pretty self-explanatory.
Just to be clear that the benefits of the new text, which is modern and can take advantage of electronic procurement, is applicable to the provinces, and of course the general notes apply as well. So the exclusions that we have in our general notes apply to the provinces.
I would say that all in all, it's pretty even in terms of coverage.
3:55 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
There's one point. When a Department of General Services, which is their equivalent of Public Works for a state level, is excluded, that effectively includes the major procurement of government. I'm just making that point.
You and I used to work for the same department, Ms. Carriere, on the procurement side, and we know how central Public Works or General Services is to the procurement of government. That kind of exclusion is very broad-based.
Thank you very much.
Thank you, Mr. Chair.
3:55 p.m.
Conservative
The Chair Conservative Lee Richardson
Thank you, Mr. Brison.
That did go on a little longer than usual, I want to say to the rest of the committee, but I appreciate the questions. Many of them were generic questions that I think are of interest and are helpful for the committee.
Thank you for your answers.
We'll carry on with Monsieur Laforest.
3:55 p.m.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Thank you, Mr. Chair.
Good day to our three witnesses.
Regarding the Buy American provisions and the agreement that was entered into, I assume that, before the American stimulus package worth about $700 billion and under NAFTA was introduced, there were already infrastructure works that could be carried out in various U.S. municipalities and states.
Were Canadian and Quebec companies eligible to bid on those contracts before the American government introduced the $700 billion stimulus package related to the Buy American provisions?
4 p.m.
Director, Multilateral Market Access, Department of Foreign Affairs and International Trade
NAFTA's Chapter 10 on government procurement only applies at the federal level. Mexico, the U.S. and Canada are under no obligation regarding provincial or territorial local procurement.
4 p.m.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Was the U.S. not under an obligation to open its markets to Canada before the agreement was concluded?
4 p.m.
Director, Multilateral Market Access, Department of Foreign Affairs and International Trade
Only contracts entered into by federal entities were affected by Chapter 10.
4 p.m.
Bloc
4 p.m.
Director, Multilateral Market Access, Department of Foreign Affairs and International Trade
That's right.
4 p.m.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
What was the approximate annual value of the contracts?
You can send us the numbers.