February 5, 2010

‘A good first step forward,’ Canadian construction industry says of U.S. stimulus agreement

RICHARD GILBERT

staff writer

VANCOUVER

The Canadian Construction industry is welcoming the deal that will allow Canadian companies access to U.S. infrastructure stimulus projects. “It’s a good first step forward,” said Michael Atkinson, president of the Canadian Construction Association.

“We still have a lot of work to do as far as ensuring access for Canadian suppliers to U.S. state procurement. States and provinces are now subject to the procurement code of the WTO (World Trade Organization). What they have done is agree to agree.”

Canada and the U.S. have agreed to offer each other permanent market access at the sub-federal level, under the provisions of the WTO Agreement on Government Procurement (GPA).

“Canadian suppliers of products such as steel and iron, who were (previously) locked out of the U.S. procurement plan will now have access,” said Atkinson. “We are in essence giving them the same access to our provincial projects.”

Canadian companies will now be able to participate in state and local public works projects in 37 states that are funded by the US$787 billion American Recovery and Reinvestment Act (ARRA).

“I expect when further details are nailed down and made available this would be a good thing for us,” said Marv DeVries, president of water-treatment equipment maker Trojan Technologies.

“We are not sure what the impact will be in the short term. It is not clear from anything we have seen what the cut-off point will be for the projects in question.”

The Buy American Act (BAA) has been a particular barrier for the construction of water and waste-treatment facilities, a highly integrated business that uses materials and components made in both countries.

The restrictions have also been applied to Canadian firms owned by U.S. companies, such as Trojan, a manufacturer of water-treatment products based in London, Ont.

It is a wholly owned subsidiary of Washington, D.C.-based Danaher Corp.

Canadian brass manufacturer, Cambridge Brass Inc., has had its pipe fittings that were already installed removed from projects in California – at the company’s expense — as a direct result of the BAA.

The American Recovery and Reinvestment Act is an economic stimulus package approved by the United States Congress in February 2009.

The Buy American Act (BAA) is part of the US$787 billion stimulus package, which barred Canadian contractors and businesses from bidding or supplying materials to new building or renovation projects worth less than US$8.8 million that were funded with money from the bill.

BAA applies if the prime contract is for construction of facilities related to airports, transit systems, highways, bridges, ferries or other transportation infrastructure.

Almost all large transportation contracts in the United States are administered by state, local, or private sector organizations and aren’t covered under free trade deals between Canada and the U.S.

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