WASHINGTON—The Ontario government will retaliate against New York’s new “Buy American” procurement law if the state does not grant a last-minute exemption to the province’s companies, Premier Kathleen Wynne announced Tuesday on a visit to Washington.
The New York law denies some Ontario firms access to certain state infrastructure contracts. When the law takes effect on April 1, it will require state agencies to use only American-made steel and iron for road and bridge projects that cost more than $1 million (U.S.).
Wynne said the Liberal government will respond, in some “proportional” way, unless New York excludes Ontario companies before the law takes effect.
Such a carve-out appears unlikely. New York Gov. Andrew Cuomo signed the bill into law in December, and it enjoys overwhelming bipartisan support in the state.
“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 said in an interview at the Canadian Embassy. “But I believe it’s really important that we take action if there’s a threat to Ontario business, Ontario workers, Ontario jobs.”
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Critics of protectionist procurement policies say they end up costing taxpayers money by reducing competition for government contracts. Wynne said she would ensure her response doesn’t do 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.
She allowed, though, that “the kind of conflict that we’re in is bound to harm somebody. It’s just not as productive as finding a way to work together. So it’s kind of, by definition, a dangerous place to be.”
The opposition Progressive Conservatives did not immediately say if they would support or oppose retaliation against New York, since Wynne did not introduce a specific policy. But Monte McNaughton, the PC economic development critic, described her announcement as political.
“Initiating a trade war is a last-ditch election ploy to shift the blame for her disastrous economic policies,” McNaughton said in a statement.
Wynne mounted an aggressive effort to urge New York not to impose any form of Buy American policy. Last May, the New York Daily News credited Ontario and Quebec lobbying for the defeat of a more ambitious proposal that would have required the state to use only American suppliers for a broader range of projects worth $100,000 and above.
State legislators then crafted their narrower road-and-bridge measure, and that bill passed easily despite Wynne’s retaliation threats.
Ontario exported $10.7 billion (Canadian) in goods to New York in 2015 and imported $14.1 billion from New York that year, according to provincial figures.
Wynne said her government plans to introduce legislation, soon after the legislature resumes business on Feb. 20, to give the government power to respond to any state’s Buy American laws in the future without passing a new law through the legislature each time.
She said the government is “on alert” with regard to Buy American policies across the U.S. She left open the possibility of retaliation against Texas, where a Buy American iron and steel law took effect in September.
President Donald Trump has promoted a philosophy of “Buy American, Hire American,” and the mantra has bipartisan appeal. In late January, a group of nine Democratic senators and left-wing Independent Sen. Bernie Sanders urged Trump to “expand” Buy American provisions in the infrastructure plan he has promised to unveil soon.
Buy American infrastructure policy is also a significant point of contention in the North American Free Trade Agreement renegotiation talks, in which U.S. negotiators have proposed tight limits on the value of U.S. contracts that can be earned by Canadian and Mexican firms.
Wynne spoke after a day of meetings with U.S. legislators and Trump administration officials. Among her partners were chief U.S. NAFTA negotiator John Melle, Vice-President Mike Pence’s chief economist Mark Calabria, Democratic Michigan Sen. Gary Peters, Republican Wisconsin Sen. Rob Johnson and several members of the House of Representatives ways and means committee.
Wynne said she was encouraged by what she heard about the state of the NAFTA talks.
“Nobody said, ‘We need to blow up NAFTA,’” she said. “There was no sense that we’re better off without it.”