As tensions around protectionism rise, especially in light of U.S. “Buy American” policies, Canadian federal and provincial governments and their public sector entities are feeling compelled to push back by finding ways to avoid buying US goods or working with US suppliers. For Ontario public sector organizations, doing so could put them squarely in the crosshairs of Ontario’s Discriminatory Business Practices Act (ODBPA).
Ontario’s Unique Legal Landscape
Ontario appears to stand alone in Canada with legislation specifically aimed at preventing business discrimination on geographic or national grounds. Described by some as a “human rights code for businesses,” the ODBPA prohibits discriminatory business practices on the basis of geographical location or origin. Section 3(2) of the Act provides a narrow exemption— it says the Act does not apply if the discrimination is in line with a policy of the Government of Canada directed towards trade with a country other than Canada or persons in a country other than Canada, or, in the case of interprovincial matters, an equivalent policy of the Government of Ontario.
This means that if the Government of Ontario encourages Ontario public entities to exclude U.S. suppliers, but such a stance is not supported by a corresponding federal government policy, the protection of the ODBPA exemption may not apply. Simply put: Ontario’s own direction isn’t enough to bypass ODBPA.
Implications for Procurement Professionals
There’s uncertainty as to whether the ODBPA applies to public procurement. Some commentators, including a legal commentator that authored a Municipal World in a 2013 article, argue that the legislation was not intended to apply to restrict Ontario’s public entities from favoring Canadian suppliers in procurement. There’s no case law to definitively confirm or refute this position. In the absence of judicial interpretation, the risk of legal challenge remains a possibility.
Why Only Ontario?
It’s interesting to note that, based on my research, the ODBPA appears to be a legislative outlier in Canada. No other province or territory has equivalent statutory protections against discrimination of suppliers based on place of origin. Manitoba appeared to have similar legislation at some point, but their legislation was repealed in 2021. This begs the question: why does Ontario stand alone in this regard?
The law’s uniqueness could hinder the Ontario public sector’s ability to respond nimbly to international trade dynamics. At a time when global supply chains are being redefined and interjurisdictional procurement is increasingly politicized, there may be reason to revisit the ODBPA’s scope. Should Ontario consider amending or repealing it to align more closely with the strategic needs of its public sector buyers?
What Should Ontario Public Buyers Do Now?
In the absence of clarity, public sector entities should tread carefully when implementing their “buy Canadian” policies. Before adopting supplier exclusion policies on the basis of place of origin they should:
- Seek legal guidance on possible ODBPA implications.
- Monitor federal trade policy for any enabling measures.
- Ensure that policy frameworks and sourcing decisions that prefer Canadian suppliers and products are defensible under broader procurement rules, such as those set out in the Canadian Free Trade Agreement (CFTA) and other trade agreements that apply to your organization.
Conclusion
Ontario’s Discriminatory Business Practices Act was designed with fair trade in mind, but in today’s geopolitical and procurement climate, it may unintentionally act as a roadblock to assertive policy action. Whether the province moves to amend or repeal it remains to be seen, but for now, buyers should be sensitive to the risks when acting in pursuit of cross-border fairness.
Disclaimer – This article is intended to provide an overview the author’s perspective and is not intended as legal advice. Readers should not rely on this article as definitive guidance. Specifical legal advice should always be obtained.