October 5, 2011

Do not to retaliate against American Jobs Act: Canadian Construction Association

GREG MECKBACH

digital media editor

The American Jobs Act, has the potential to disrupt international trade between the United States and Canada, but general Canadian contractors would be hurt the most if Canada retaliates with Buy Canadian restrictions, says the president of the Canadian Construction Association (CCA).

“The Canadian government has already gone on record expressing its concern and opposition to those measures so I expect that we are going to see a similar response from the federal government and Canadian industry in putting together some kind of coalition to try and again get an exemption for Canadian products,” said Michael Atkinson, CCA president, alluding to the response two years ago to the domestic content requirements of the American Recovery and Reinvestment Act.

U.S. President Barack Obama proposed the act in early September. However, at press time, neither the U.S. House of Representatives nor the Senate had actually tabled the American Jobs Act suggested by Obama, who, unlike the Canadian Prime Minister, is not a lawmaker and therefore does not actually table bills in the legislature.

Obama proposed, among other things, US$50 billion for highways, transit, rail and aviation, plus $25 billion for school construction. It is anticipated that projects would have domestic content requirements.

Rick Bonnette, the mayor of Halton Hills, Ont., said this is reminiscent of the American Recovery and Reinvestment Act, which became law in February 2009 and included Buy American provisions.

“It’s frustrating that the ‘son of Buy America’ has come back so soon with the American Jobs Act,” Bonnette said. “I think it really caught many people by surprise after what we just went through in 2009.”

At that time, the American Recovery and Reinvestment Act provided for $80.9 billion for infrastructure projects and required that 100 per cent of the iron, steel and manufactured goods for each project be made in the United States.

In February 2010, an agreement was reached between the two governments that provided for some Canadian exemptions.

But it took a while to get those exemptions, Bonnette noted.

“We were the first municipality that responded, and quite frankly, we were whistling Dixie in the wind for three months trying to get some action because we had some local industry that was being affected by it,” Bonnette said.

“The Americans were putting bids on Canadian procurements with municipalities throughout Canada and our guys were not being allowed to bid on any American jobs.”

He praised Canada’s International Trade Minister, Ed Fast, for acting more quickly this time in expressing concerns.

“The (Obama) Administration is proposing the inclusion of Buy American provisions as a part of the infrastructure funding proposal,” Fast stated in a press release issued within a week of Obama’s proposal.

“Canadians can count on our government to defend free and open trade on the world stage.”

But retaliatory action would harm Canadian contractors, Atkinson said.

“If I’m a Canadian contractor working on one of those stimulus projects in the United States, I’m in the same boat as a U.S. contractor is,” Atkinson said.

“In fact, the worst possible scenario for a Canadian contractor would be Canadian public purchasing authorities, for example, municipalities, taking similar retaliatory measures here, because the difficulty becomes, how would you find replacement materials?

“If they have to warrant or swear or whatever that they are not using non-American steel etcetera, it can be very difficult, particularly for a general contractor, to be able do that and to source U.S. products in every case.”

Bonnette did not specifically advocate for retaliatory measures.

“I think it’s too premature to see where we’re going to go,” he said.

“If we put the same barriers to the Americans as put to us — I’m not saying that’s what we should do but it’s worthy to have a discussion because we lost a lot of jobs in 2009. We were in a recession the same as the Americans were. Protectionism is what led to the Great Depression.”

He added the economies of Canada and the U.S. are so intertwined that sometimes a piece of steel crosses the border three times before it is manufactured into a guardrail.

It is unclear whether Obama’s proposal will ever be enacted into law. Although the majority of Senators are members of Obama’s Democratic Party, the majority of House of Representatives members are Republicans.

The spokesperson for House Majority Leader Eric Cantor, a Republican from Virginia, did not answer an e-mail requesting for comment for this story. White House staff representing President Obama also refused to comment.

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