Is it possible for cities to split from U.S. businesses? In Hamilton, staff say it's complicated but doable
Staff with the Ontario city say due diligence needed so operations aren't put at risk
Like other Ontario municipalities, the City of Hamilton is looking to stop buying goods and services from American companies during the newly launched trade war. But the process is proving to be more complicated than a simple, sweeping ban, city staff say.
Procurement staff told Hamilton council on Wednesday that they're working on definitions — such as what makes a company or a good "local" — and possible exemptions, as well as to understand tariff impacts on city operations.
"There may still be some interest to continue to buy outside of local, outside of Canada," said Mike Zegarac, general manager of finance.
That's not what some councillors wanted to hear the day after U.S. President Donald Trump placed 25 per cent tariffs on all Canadian goods, with more levies possibly coming for steel and aluminum later this month.
"Not only is our economic freedom at risk, but also our sovereignty, so the stakes are as high as they could be," said Coun. John-Paul Danko.
Hamilton should be following Ontario Premier Doug Ford's lead, he said.
Ford announced Tuesday that American companies would immediately be banned from receiving any new provincial contracts and urged Ontario's 444 municipalities to follow suit.
Brampton and Mississauga, for instance, are also looking at changes, staff said.
Coun. Brad Clark pushed city staff to take a harder line to avoid striking any new contracts with American companies for construction projects, equipment and services. The city awards about $793 million a year in contracts, according to a staff report.
Clark also urged staff to cancel all travel to the U.S. for conferences and professional development.
"Every single pushback we have becomes a splinter in the eye of the president and his cabinet," Clark said.
Changes made to procurement rules
The City of Hamilton has been trying to decouple itself from U.S. companies since last month after council passed a motion from Mayor Andrea Horwath.
Horwath will also check with Ford about what he's expecting from municipalities, as council approved in an amendment from Danko on Wednesday. Horwath is in Washington this week to advocate against tariffs and didn't attend the meeting.
"We understand council's position — we need to take a strong stand and we need to move quickly," said city manager Marnie Cluckie. "We also need to make sure we are doing our due diligence, albeit rapidly."
Staff will take one step immediately — increase the value of contracts that can go through the "request for quotes" process instead of the more formal and widely advertised "request for tenders" process, said a report unanimously approved by council Wednesday.
In the tenders process, the city publicly advertises the details of the contract, which any company based anywhere can bid on, and it's awarded to the lowest bidder who meets all the criteria.
When requesting quotes, the city sends the information directly to a limited number of businesses and doesn't advertise it formally. As with tenders, the lowest bidder gets the contract. This process applies to all goods and services valued between $10,000 and $100,000. Anything over that has to go through the tenders process.
But under the new rules, staff can now use the request for quotes process for contracts worth up to $133,000 for goods and services and up to $334,000 for construction, ensuring only domestic companies are considered.
"With new thresholds, the city can proceed with buying only local and Canadian," said the report.
The change also brings the City of Hamilton's policy in line with the Canadian Free Trade Agreement, which governs domestic trade, the report said.
Limited bids make 'buy local' challenging
Beyond that change, staff told council, they're still reviewing some potential barriers and exemptions.
For example, for Hamilton's water and wastewater operations, the department buys specific parts manufactured in the U.S. and then sold through a distributor in Canada, said the report. Every year, it spends over $5 million and works with 58 U.S. vendors.
"If we were to buy potentially inferior products [from elsewhere], that could put operations at risk," said Zegarac.
The fire department also has to be careful where it buys some equipment, most of which is also manufactured in the U.S., for public safety reasons, he said.
Clark said he was "gobsmacked" that only the U.S. makes these products.
"Why don't we look beyond?" he asked staff.
But procurement director Tina Iacoe said there are "limited vendors" that bid on those types of contracts, and typically they aren't from any other international suppliers than those in the U.S.
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With files from CBC News