Tariffs are on everyone’s minds. Are they on, off, or on hold? Can we implement a “Buy Canadian” or “Buy non-US” policy? While politicians aim to reassure their constituents that they are advocating for their best interests, many municipalities already embrace a “Buy Local” directive. Public procurement professionals understand that every decision carries implications, especially when it comes to trade agreement compliance. So, what’s a procurement professional to do? That’s where OPBA steps in—here to support and guide you.
What are Tariffs?
Tariffs are a tax on imported goods, paid for by the person or company who has imported the goods. A government may impose tariffs to generate revenue, protect domestic industry or as a diplomatic tool.
To date, all levels of government in Canada are preparing for and planning to address the impacts of the new U.S. tariffs. Municipalities have been tallying the quantity value of contracts with U.S. companies that would impact the bottom line the most. Even if contracts are not with U.S. firms directly, at some point in a supply chain there will likely be tariff impact.
Tariffs will impact many business sectors, but those that would affect municipal purchases the most are expected to be manufacturing, automotive, energy and construction.
Municipal Landscape
The Discriminatory Business Practices Act prohibits discrimination based on several factors, including geographic location. Normally, this legislation would preclude municipalities from showing local preference. However, an exemption exists to allow a ‘discriminatory’ business practice in accordance with federal or provincial policy. So, once the Canadian and Ontario governments develop policies to promote Canadian, municipalities may follow.
Municipal procurement is governed by obligations contained in inter-provincial, national and international trade agreements. The Canadian Free Trade Agreement (CFTA), being a trade agreement between the provinces, territories and the federal government, prohibits agencies from mandating local content and from evaluating based on geographical preference over a particular threshold. CETA, the Comprehensive Economic and Trade Agreement between Canada and the countries of the European Union mandates that government agencies treat foreign suppliers as though they were domestic suppliers. The thresholds over which these two treaties apply are listed in the table below.
Municipal Responses
Municipalities are standing by their local businesses that would be negatively impacted by tariffs. For example, Brampton announced a “Made in Canada” response; Toronto has proclaimed that all procurements valued under $353,000 would be awarded to domestic suppliers. Halton Hills has directed staff to stop making purchases on Amazon.
Many municipalities are increasing their low value threshold to allow for single sourcing to domestic or local suppliers. Currently invitational bids that go out to invited bidders only can be written to favour local or domestic suppliers, but municipalities are increasing their medium value acquisition (MVA) thresholds to allow for even more non-U.S. suppliers. For example, both the City of Vaughan (per Council minutes dated March 4, 2025) and the City of Mississauga (as presented to City council on March 5, 2025) have officially increased their MVA thresholds from $100,000 to be more in line with the above-noted CFTA thresholds.
There are additional benefits to increasing the MVA procurements thresholds, including sustainability initiatives which aim to strengthen the local and/or Canadian economy.
Defining US and Canadian Suppliers
Whether an entity chooses to favour Canadian suppliers or to ban U.S. suppliers, the entity first needs to determine how they will go about doing this. A good place to start is to update policies to include specific definitions.
For example, the City of Mississauga is proposing to define a “U.S. Bidder” as a bidder that:
a) “Is a service provider, supplier, manufacturer or distributor of any business structure that conducts its activities on a permanent basis in the United States; and
b) Employs more than 65% of its full-time employees inside the U.S. on the closing date of this bid request.”
A non-US bidder means a bidder that does not meet the above criteria.
Further, the City of Mississauga proposes to add language to favour Canadian or Non-U.S. suppliers, by modifying the award methodology as follows:
“If the lowest compliant bid (or highest ranked bid) is from a US bidder, and if the lowest compliant bid (or highest ranked bid) from a non-US bidder is within 20% of the price of such US bidder, the City reserves the right to award the contract to the non-U.S. bidder….”
The City of Vaughan is considering a definition of Canadian supplier as:
“1. Will have the proposed work done by a workforce of which at least eighty percent (80%) is non-US based;
2. Have an office of production facility in Canada; and/or
3. Help Canadian knowledge workers and talent obtain experience delivering projects. Companies and projects that help Canadian workers will:
a) Be led by a Canadian
b) Have at least one of either the project manager position and at least one of the two project executives must be based in Canada.
c) Spend a minimum of seventy percent (70%) of the project delivery expenses for services provided by Canadians or Canadian companies.”
Other municipalities are choosing to define Canadian Business as follows:
“….a supplier, manufacturer or distributor of any business structure that conducts its activities on a permanent basis in Canada. The business either:
i. has its headquarters or main office in any province or territory within Canada. Or
ii. has at least 250 full-time employees in any one province or territory within Canada at the time of the applicable procurement process”.
or they are using the definition contained in the Building Ontario Businesses Initiative (“BOBI”) which simply defines a Canadian business as “commercial enterprise that is incorporated pursuant to the laws of Canada, and which has ongoing business activities in Canada”.
This article barely scrapes the surface on Tariffs and their impact on us all. Readers are encouraged to share their experiences and information on the message boards. OPBA will endeavour to do the same.
OPBA Actions and Resources:
1. MemberConnect – A Trusted Resource: One of OPBA’s most valued member services, MemberConnect, offers access to a wide network of supportive colleagues who are subject matter experts in their field. To address the growing concerns around tariffs, we’ve created a dedicated message board exclusively for tariff-related discussions and one where members can post documents they would like to share.
To access the Tariff Boards,
- log into the member’s portal on the website
- click the Communication button
- click on the Message Boards
- click Daily Digest if you want to receive a summary of the discussions. Otherwise, you will receive updates as they are posted.
2. Engagement with other associations:
OPBA has been actively collaborating with key staff at AMO/LAS, ensuring they are well-informed about the public procurement challenges municipalities face as they advocate with the provincial government. Click here to learn more about what action AMO is taking.
We have also connected with staff at the Canadian Federation of Municipalities (FCM) and Association of Ontario Road Supervisors (AORS).
3. City of Toronto – Mayor’s Economic Action Plan in Response to US Tariffs
4. City of Mississauga – Choosing Canada: Mississauga outlines its response to American tariffs
5. City of Vaughan – Procurement Strategies in response to American Tariffs
6. Professional Development (Pro-D) Sessions:
Be sure to attend Part 2: OPBA Talks on US Tariffs when our panel of senior public procurement professionals return to discuss what they’ve been up to over the past 7 weeks. Bring your discussion question too! More details to follow.
Did you miss OPBA’s recent Pro-D sessions? Don’t worry—you can catch up by accessing the recordings available in the Members Only file archive or access the video’s directly on OPBA’s YouTube channel:
- February 7: OPBA Talks: Preparing for U.S. Tariffs – Impact, Questions, and Strategies for Readiness
- February 25: Navigating Trade Tensions: Tariffs, Sanctions, and Procurement in Canada with Paul Emanuelli of The Procurement Office
7. Media Spotlight On February 7, OPBA’s Chair, Victoria Mirlocca, positively represented public procurement sharing insights on CBCS News Windsor, appearing on both television and radio.
How else can OPBA support you? We’re here to help. Email Rozalyn Werner-Arce, Executive Director at rozalyn@opba,ca.