The Ontario Chamber of Commerce (OCC) supports the Canadian government in its efforts to ensure the Buy American provision in the American Jobs Act does not negatively impact Canadian businesses. On September 8th U.S President Barack Obama introduced the $450 billion American Jobs Act to stimulate job growth and economic recovery. Section 4 of the bill, referred to as the Buy American clause, stipulates that all public projects funded by the stimulus use only American produced iron, steel and manufactured goods. Foreign substitutes for American-made products would only be allowed if the American content drove up the cost of a project by 25 percent or if the goods needed for the project are not manufactured or available in the U.S.
If the bill passes in its current form, Canadian business suppliers would be excluded from the $140 billion that is earmarked in this bill for infrastructure and public works projects.
The interconnectedness of the U.S and Canadian economies mean that goods move back and forth across the border multiple times in the production cycle. The Buy American clause will not only affect the $2.4 billion steel and iron industry in Ontario and its correlating businesses but also American companies doing business with Canadian firms.
A similar Buy American clause was inserted in the $900 billion economic stimulus plan of 2009 (the American Recovery and Reinvestment Act). At the eleventh hour, the Canadian government was granted a waiver allowing Canadian suppliers access to state and local public works projects in a range of programs funded by the Act. However, Canada was not protected against future Buy American provisions in U.S legislation.
“Ontario businesses are directly impacted by access, or lack thereof, to the American procurement market,” stated Len Crispino, OCC President and CEO. “When trade barriers go up, key industries across Ontario see exports, investment and jobs go down.”
“Of the $3.9 billion in iron and steel products exported from Canada to the U.S. in 2010, $2.4 billion came from Ontario,” Crispino added. “We must continue to work with the United States to strengthen our integrated economies and to develop solutions that are beneficial to both parties.”
The OCC hopes the U.S. and Canadian governments reach an agreement that will contribute to a sustainable trade relationship and foster a prosperous economy on both sides of the border.
About the OCC – For 100 years the Ontario Chamber of Commerce (OCC) has remained a strong advocate for Ontario businesses. As a membership organization, its lobby efforts are informed by local chambers of commerce, boards of trade and businesses of every size, in every sector who collectively make the most relevant and influential network in the province – 60,000 strong. To learn more about the OCC and what key policy issues are impacting Ontario’s business community visit www.occ.on.ca.