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First step taken to removing trade road blocks.

First step taken to removing trade road blocks

A commitment by former Premier David Peterson to remove the barriers blocking trade with other provinces is one of several measures which could open up interprovincial trade in the future.

In a telephone interview Neil Allison, an official with the strategic planning branch of Manitoba's Ministry of Industry, Trade and Tourism, said the agreement committed to by Peterson is just one of several measures which could ease the movement of goods from one province to another. Trade in various provincial goods is currently stifled by such restrictions as government regulations and provincial product standards.

"There is a tacit understanding that the provinces will work towards taking down other barriers to trade," Allison said.

However, at press time Ontario's new Minister of Industry, Trade and Technology, Allen Pilkey, had not made a decision on whether to finalize the agreement, which was to take effect on Oct. 31.

The agreement, proposed during the premiers' conference in Winnipeg last summer, calls for the provinces to open up their procurement processes so businesses in all provinces are eligible to supply goods, including such items as lawn fertilizer and office equipment. The annual value of affected purchases is approximately $2 billion - $300 million in Northern Ontario alone.

The agreement does not cover services or construction materials. However, some of the officials who were interviewed said future agreements are expected to remove those barriers.

Future talks are expected to centre on removing current restrictions to private-sector trade between the provinces. Among the items targetted for examination after the current agreement is finalized are beer, wine and liquor, as well as procurements made by Crown corporations.

If the current agreement is approved, businesses in border areas such as Kenora or Haileybury are the most likely to experience any impact of an open procurement system.

"If the system is open, then the amount of money involved might convince businesses to bid on contracts that they ordinarily wouldn't," said Allison.

However, he speculated that there would not be any significant impact on Ontario's business community.

"I don't think there will be hordes of Manitoba manufacturing businesses going into Kenora and putting Kenora businesses out of work," he said. "The impact on Kenora will probably be zilch."

Under the agreement the provinces would attempt to open all business opportunities under their control and offer no preferential treatment for local businesses. At the time of the meeting the premiers said it was the next logical step to take following the signing of the Canada-U.S. Free Trade Agreement.

In an interview in mid-October a spokesman for Ontario's Ministry of Industry Trade and Technology said the agreement was under review because it was "made by the previous government."

Fernando Traficante, a senior trade policy advisor with the MITT, said he was unsure what the government will decide, adding that the minister was expected to be briefed on the agreement.

Speculating on what options are open to the minister, Traficante said there is a wide range of possibilities, from postponing a decision to not signing the agreement.

Allison said that while provincial governments have been slow to sign the formal agreement, there is little doubt the new Ontario government, as well as the other provinces, will sign the pact.

"The Ontario government has already been very open in its procurement process," said Allison. "Under the agreement, it won't be giving up anything."


According to Larry Loop, director of purchasing services for Ontario's Ministry of Government Services, each government ministry is responsible for making its own purchases and, of those, about 15 per cent are made in local markets.

"Each ministry has its own buying power," he said in a telephone interview from his Toronto office. "In cases like the MNR (Ministry of Natural Resources) the local buying power has been totally delegated."

In most cases branch-office government officials have the authority to issue purchase orders for between $5,000 and $10,000 each. Purchases of more than that amount can still be made by a branch office, but approval must be received either from the regional office or head office.

"We've found in our buying pattern that 15 per cent of the civil servants are in Northern Ontario and 15 per cent of the buying is done there," said Loop.

He noted that Northern Ontario's buying power is expected to increase as the government's relocation effort continues.

"As people move to the north, they are going to take their purchasing authority with them. So while Northern Ontario might have 20 per cent of the people, it could have 25 per cent of the buying power," Loop added. "If you talk to people at the end of the line you'll find that most of the purchases made are made locally."

Loop noted that his ministry handles the purchase of furniture and fine papers for all ministries. while the Ministry of Transportation makes all vehicle purchases and the Ministry of Health makes all the purchases of medical supplies. Some contracts for office equipment are also signed by the ministry's head office, however the sale and community of the particular ministry's office.

He added that, in some cases such as the purchase of a security system for a prison, a ministry's headquarters will make the purchase.
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Author:Krejlgaard, Chris
Publication:Northern Ontario Business
Date:Nov 1, 1990
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