Imposing a long-term US bidder ban would create widespread confusion and uncertainty and grind the Canadian government procurement system into gridlock. In addition to harming Canadian suppliers who get caught in the logjam created by the bidder ban, public institutions will still be compelled to award to US suppliers in many areas to support the delivery of public services, rendering the ban both counter-productive and ineffective.
Paralyzing the System
Government procurement does not work the same way as a consumer boycott. While consumers can make individual choices on how boycotting US suppliers and products would impact them personally, government institutions that try to impose similar boycotts risk unintended consequences that can inadvertently harm the Canadian suppliers they are trying to protect while seriously damaging critical government operations.
If a US supplier ban is imposed, Canadian suppliers will be quickly drowning in a tsunami of red tape filling out forms to prove that their companies and products are sufficiently “Canadian” (whatever that means) to be eligible to bid on contracts that they were previously winning before the ban came into effect. For example, how would we establish that a company is Canadian? Would a physical presence operating on Canadian soil be the test to qualify as Canadian? Would US-owned companies with US head offices that also operate Canadian offices and facilities and employ Canadians qualify as Canadian? Would it make a difference whether they were operating directly from the US parent company or operated in Canada through a wholly US-owned Canadian subsidiary? Either way, would banning that company and forcing it to lay off its Canadian employees count as a win or a loss in a trade war?
As complicated as it would be to define and differentiate a Canadian company from a US company, trying to identify and ban US products gets even more complicated. There are literally thousands of products purchased from our globally integrated supply chains by public institutions across Canada every week. Those public bodies lack the internal staff and expertise to figure out how to apply US bidder and content analyses in real time prior to each contract award. It is no exaggeration to say that each new procurement could easily be delayed by at least three to six months and likely longer as public institutions try to figure out how to properly apply a US supplier ban. It doesn’t take too much foresight to see how a ban on US suppliers, if implemented, would paralyze our public procurement system.
US Bidder Ban is Redundant and Self-Defeating
How would this help the Canadian suppliers who are supposed to benefit from the ban? Those Canadian suppliers would be struck in the same logjam as all other bidders while government institutions try to sort out this bidding boondoggle.
Further, the Canadian suppliers we were originally trying to help are unlikely to be pleased when they find out that the US bidder ban was never fully enforced even when the bids were “too American” since public institutions will still be required to purchase US products that are critical to government operations and any alternatives, if they exist, are too expensive or low quality or will take too long integrate into current operations.
Unfortunately, bid boycott advocates tend to forget that government procurement is not a subsidy program full of frivolous spending that can be switched on or off without any operational impact on the purchasing institution. When US suppliers win Canadian government contracts, they do so since non-US alternatives do not exist, are lower quality, or are more expensive. Like all other successful bidders, they win contracts when they offer the best deal. Banning US bidders means we would be substituting inferior alternatives, would be banning US bidders who wouldn’t be winning the bid in the first place, or would be bending the rules and not enforcing the ban when there are no feasible alternatives. In addition to causing widespread confusion in the government procurement system, the ban would put Canadian lives at risk if critical government systems fail because we cut ourselves off from critical US supplies.
Supply chains are both complicated and critical. Politicians should stop interfering in public procurement since blindly implementing US bidder bans risks harming Canadian suppliers and government operations. In conclusion, Canadian public institutions should avoid playing politics with government procurement and our senior-level governments should focus on ending, rather than escalating, this nonsensical trade war.
