Big trade pacts affect local procurement

“Basically we’ve got policies that affect how we spend our money.”

Councillor Bob Day asked for a made-in-Lake-Cowichan policy.

Councillor Bob Day asked for a made-in-Lake-Cowichan policy.

Municipalities spend money.

Sometimes lots of it. But, even if it’s only a small dollar amount, councillors and administrators have usually wrestled feverishly to make sure it offers value to the taxpayer.

Lake Cowichan town councillors talked last week about developing a new procurement policy to streamline how purchases are handled.

Town CAO Joe Fernandez kicked it all off by saying, “Basically we’ve got policies that affect how we spend our money but one of the issues that communities have been looking at is what impact municipal spending has, not only on the economy but socially as well.”

He was reporting out from a recent administrators’ talkfest he’d attended.

He gave the councillors copies of Vancouver’s procurement policy, which he said was “in sync with Lake Cowichan” despite the difference in the size of the two communities.

“Basically, their community vision is very similar to what we have. It’s useful to look at something similar to this policy for the town. The spending that we incur does have economic ramifications,” he said, urging council to consider spacing out infrastructure spending.

“We should be looking at not spending all our capital dollars either at the beginning or at the end. We should be spacing it out in such a way that community contractors benefit from that because any spending a municipality does has a multiplier effect. It is a benefit that goes down the chain and we should as a community look at spending in a way that is meaningful, useful and organized. We should have plans and a policy that directs that spending plan,” Fernandez said.

Coun. Bob Day asked if the CAO was planning on bringing back a draft procurement policy.

“Only if you so direct,” Fernandez said.

Mayor Ross Forrest said, “I think it’s definitely something we should be looking at and discussing. Anything that can benefit our community and do it from an organized plan is the way to go.”

Day agreed, “But if you read here, [in the Vancouver policy] it’s even got a section on child labour. It also says not to use prisoners as employees. This might be a little more complex than we need to look at right away.”

However, Day, who was recently elected vice-chair of the Cowichan Valley Regional District board, also added, “I know the regional district is hot on this idea because they run so many different things like water and sewer where you’ve got different people buying stuff all over the place. They want to bring it into one policy.”

To Fernandez, it was even simpler.

“To put it in one line: we have to get value for the money we spend,” he said.

Coun. Tim McGonigle said he was interested in pursuing the idea.

I think it would be interesting to digest a policy and see what is already in place that limits us in what we can purchase, for example TILMA [The Trade, Investment and Labour Mobility Agreement] or other agreements that have been implemented and how they would be affected by such a policy,” he said.

Fernandez told councillors that there are different schools of thought as regards public spending.

“Some people think it reduces the local economy while others think it enhances it. Economists haven’t agreed on that. But we have taken for granted that we spend money. It’s time we look at how we do it,” he said.

McGonigle agreed that opinions really differ.

“You can even see with the federal election results that public spending was a major contributor to the [Liberal] Party becoming the leading power. When you look at campaigning on deficits: it’s not that long ago that you would be booed and hissed for doing that. The idea of economic stimulus was at least embraced by the majority of Canadians, who thought that was worthy of giving them a chance. It’s interesting, yes. But, as the mayor said earlier, everyone has an opinion,” he said.

Day asked that Fernandez bring back some more thoughts on the idea to a future meeting and the CAO promised to “massage it” into “a made-in-Lake-Cowichan” policy of about two pages rather than the extensive document used in Vancouver.

Asked later to expand on what effect could come on local procurement policies from things like the North American Free Trade Agreement, which has already been seen as interfering with the use of local contractors on some municipal projects in Canada, McGonigle said, “That’s what I meant when I asked about the effects of TILMA and the other trade agreements, to make sure we don’t limit what we can procure locally by legislation that’s already in place.”

He also pointed out that cities like Vancouver, “with a larger budget than probably Vancouver Island, I can see that being a problem. That’s why they put limits within TILMA so it didn’t limit or obstruct your ability as a small community to procure locally. There is a threshold there but it was put in place so small communities could do some local procurement.”

Lake Cowichan’s works superintendent Nagy Rizk said that Lake Cowichan’s projects were likely to be too small to attract the interest of contractors from distant locations.

Fernandez concluded by saying that was another good reason for spacing out the spending of municipal project money. It kept individual projects too small to interest big companies and left the town free to postpone certain jobs to wait until prices improved.