How much business does Toronto give to American property companies through municipal contracts?
To find out, CBC Toronto reviewed open data on all the competitive contracts that the city has granted to suppliers in the last two years, worth a collective of $ 3.2 billion.
At that time, 10 percent of the city’s services for services were insured by US property companies, according to the analysis. The 76 contracts are worth a total of approximately $ 210 million or six percent of the funds that Toronto accumulated through the competitive acquisition between December 6, 2022 and March 11 of this year.
These contracts constitute only a fraction of the acquisition of the city. But they provide an idea of what US companies can lose, and what Canadian suppliers could win, in the commercial war in the future if the City Council approves the promised motion of Mayor Olivia Chow to prohibit US companies of all future municipal contracts at the end of this month.
“That will be noticed,” said Drew Fagan, professor at Mock School of Global Affairs & Policy Policy.
“Toronto is the sixth largest government in the country. We do not think about that, but it is, after the federals and the four major provinces … it is significant.”
Economist Colin Mang says that the measure would have a symbolic and economical impact on the commercial war with the United States.
“It will cost Americans to business and cost jobs,” he said.
Although the vast majority of Toronto’s acquisitions are allocated to Canadian property companies (84 percent in CBC Toronto analysis), MANG says that prohibiting US offers would have a great impact on some of the largest contracts in the city for architecture or engineering services.
“It could increase the costs for the city a bit if you cannot take advantage of international markets, but ultimately, tax money remains in Canada, which is also good,” said Mang, an assistant professor of Economics at McMaster University in Hamilton.
The Ontario government has already banned US companies of the provincial acquisition.
Chow announced his plan to try to implement a similar prohibition for Toronto on March 6, along with a measure that has already limited offers for city contracts below $ 353,000 for Canadian companies.
The CBC Toronto analysis found that 18 of the 76 contracts that were for US companies fell below the threshold of $ 353,000. These contracts were worth a total of only $ 3 million, or one percent of the total funds awarded to US companies in the last two years.
“His initial plan is a bit more symbolic,” Mang said. “Small times contracts are for small amounts of construction, or for some materials that some departments of the city need. Anyway, all this is delivered locally.”
How will the city define the companies of the United States?
What remains without being clear is how the city will define what an American company considers. In a statement, the mayor’s office said the city staff is still finishing that definition of Chow’s motion.
“Settle [U.S.]”said Zeus Eden, press secretary of the mayor.
Usually, he said, that means that the business is headquarters or main business place in the US. Or it has at least 70 percent of its employees there at the time of presentation of the offer.
The CBC Toronto analysis was based on where the supplier has its headquarters, and if that company was a subsidiary of an international business, then the property was determined by the location of the main business place of the parent company.
The city administrator is also reviewing “all options” when it comes to whether or not they cancel an existing contract with US companies. Fagan says that canceling them probably is not worth this point of the commercial war, “given the probability of demands.”
The ban could increase the growth of employment at home
Looking towards the future, mang sees many economic benefits for the city, and potentially for the rest of the country, if Toronto limits their contracts to Canadian companies.
“If the city is going to take tax money and will pump it to local businesses that will be hired again in the Toronto area,” he said. “If they are looking at other Canadian suppliers, that will be good here in Canada so that employment growth begins again.”
From a political perspective, Fagan says that the city’s plan shows that all levels of government take the response to the tariffs of the president of the United States, Donald Trump.
“You want to be coordinated as much as possible to make sure you get maximum value, the maximum leverage, outside the steps you take,” he said.
“We are a medium weight and the United States is a super heavy weight and we have to be more intelligent and more strategic and more proactive in certain ways as we get involved.”
The mayor’s office says that Chow will present its motion to prohibit US companies from offering for municipal contracts in the Executive Committee on Wednesday and in the City Council next week.
