President of the Steel Fabricators of New England; CEO, Capone Iron Corporation in Rowley
When you pay income, sales, or property taxes, wouldn’t you assume that money is going back into your community? When you drive by a publicly funded construction project, like a new school or library, do you assume a local business built it?
It’s a common sense assumption, but it’s the wrong one in Massachusetts. There are no regulations here stipulating a sourcing preference for Bay State or even American companies when procuring materials for taxpayer-funded contracts. Contracts go to the lowest bidder, who in my experience often aren’t even located in the United States.
Some will argue that’s the best way to manage public procurement. But that notion ignores the “economic multiplier” effect we’d enjoy if we kept the work here. When a contract is awarded to a local company, it creates work for skilled employees to execute the contract requirements. Those employees, in turn, invest in their community; they purchase groceries, eat at local restaurants, have their cars repaired, and pay for childcare — all of which is economic activity that ripples through other local businesses and workers.
That’s the economic multiplier in action, and Massachusetts’ procurement spending often multiplies in another country. A “Support for American Manufacturing” bill under consideration in the Legislature would change that.
S-2546, introduced by Senator Joan Lovely and now with many co-sponsors, would establish a preference for domestically made steel and other manufactured materials for publicly funded projects. It would ensure domestic manufacturers and their workers – not companies that pay their taxes to a different government — get the first chance to supply our state’s needs.
Critics of rules like these often call them unnecessary and unfair because they claim other countries’ procurement markets are wide open for American businesses. They’re presuming you won’t look that up. For example, while Canadian laws generally allow US firms to compete for government contracts, procurement policies — typically executed at the municipal level — broadly exclude them.
S-2546 is consistent with all of our trade obligations at both a state and federal level, and is no different than the preferences our trading partners have in their own domestic procurement markets. It’s lawful as it is common sense, and it will reward businesses and workers who contribute to the economy here.
Consul General of Canada in New England; Wellesley resident
As Consul General of Canada in New England, I have seen first-hand the strength of the trade ties between Canada and Massachusetts. In fact, Canada is Massachusetts’ #1 customer.
However, a bill being proposed in the Massachusetts Legislature — S2546 - “An Act to Promote American Manufacturing” — is putting that relationship at risk and could cost jobs right here in Massachusetts. If passed and signed into law, this proposal risks inflicting damage on a robust and mutually beneficial Canada-Massachusetts trade and investment relationship. Specifically, the procurement restrictions in S2546 would make robust economic growth more difficult to achieve. That is certainly not an outcome that would serve anyone’s interests.
The integrated economies of the United States and Canada benefit immensely from the free flow of goods across our shared border. This is why applying procurement restrictions such as those proposed in the Massachusetts bill will negatively impact US jobs and US companies that rely on cross-border supply chains. In our view, the best way to stimulate economic growth is to keep our respective markets open to two-way trade. “Buy America” legislation may sound appealing, but it has unintended consequences: It imposes extra costs on US companies, disadvantaging them in global competition. In turn that can mean a loss of jobs in this country.
Canadian federal procurement processes are open to US suppliers. In fact, the United States has a procurement trade surplus with Canada. This means our government buys more supplies and services from US businesses than the US government buys from Canadian suppliers. With some limited exceptions, most government procurement from all 13 of Canada’s provinces and territories is also open to US suppliers.
Should Massachusetts go ahead with S2546, the Canadian government is sure to face calls for the imposition of similar protectionist measures in Canada. This is a road that neither country should want or have to take. It inevitably leads to a dead end, damaging both countries.
Open access to each other’s government procurement markets has created jobs in our economies, opportunities for businesses on both sides of the border, and better value for our government agencies. In the spirit of our bilateral relationship that benefits both Massachusetts and Canada, I would strongly urge legislators to oppose S2546.
As told to Globe correspondent John Laidler. To suggest a topic, please contact firstname.lastname@example.org.
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