Trade Cases

Ontario Ready to Retaliate Against Buy American Policy

Written by Sandy Williams

New York State’s “Buy American” procurement law will take effect April 1 and Ontario Premier Kathleen Wynne is fighting back.

Wynne said that if a last minute exception is not granted to Ontario, the province will take “proportional” retaliatory action.

The New York law will require state agencies to use steel and iron made in the U.S. for road and bridge projects that cost more than $1 million. The bill was signed into law in December with overwhelming bipartisan support.

Wynne said it threatens Ontario businesses that exported CAD $10.7 billion in goods to New York in 2015 and imported CAD $14.1 billion.

“I think we have to stand up for the businesses and the workers in Ontario. Exactly what that will look like, we’ll have to work on,” Wynne told reporters at the Canadian Embassy.

Wynne said care would be taken to ensure that any response does not cause more harm than good. “I’m not in the business of harming Ontario businesses. We want to make sure that whatever we do is proportional to what New York has done, but wouldn’t harm Ontario,” she said.

Wynne was active in lobbying against the New York Buy American policy and succeeded with help from Quebec to defeat an original proposal that would have required American-made products to be used for any project of $100,000 or more.

Ontario plans to introduce legislation, after the Ontario parliament reconvenes April 20, that will give the province power to reduce procurement opportunities for states that adopt Buy American provisions. Any actions would be proportional to the U.S. exclusion of Canadian products. One of the states that could be targeted is Texas, which enacted a Buy American iron and steel law in September.

Wynne says Canada remains “on alert” to protectionist Buy American policies encouraged by the Trump administration and under discussion in NAFTA negotiations. She plans to discuss implementing retaliatory measures with other premiers at an upcoming conference, but stressed she wants to avoid triggering a trade war.

Wynne said she is encouraged by what she has heard about the NAFTA talks during a recent meeting with U.S. legislators and Trump administration officials.

“Nobody said, ‘We need to blow up NAFTA,’” she said. “There was no sense that we’re better off without it.”

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