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Home My WebLink AboutFSD-008-25Staff Report If this information is required in an alternate accessible format, please contact the Accessibility Coordinator at 905-623-3379 ext. 2131. Report To: General Government Committee Date of Meeting: March 3, 2025 Report Number: FSD-008-25 Authored By: Mandy Chong, Manager, Procurement Submitted By: Trevor Pinn, Deputy CAO/Treasurer, Finance and Technology Reviewed By: Mary-Anne Dempster, CAO By-law Number: Resolution Number: File Number: Report Subject: Trade Dispute and Opportunities for Clarington Recommendations: 1.That Report FSD-008-25 be received; 2.That Staff advocate for the Province to introduce legislation to support municipal efforts to favour Canadian bidders in their procurement and to reduce inter-provincial barriers to trade; 3.That Staff continue to engage with other municipalities to explore methods to support Canadian businesses; and 4.That Staff continue to monitor provincial and federal responses to U.S. tariffs and report back as more options become available for Clarington to support Canadian businesses. Municipality of Clarington Page 2 Report FSD-008-25 Report Overview This report outlines the impacts of the trade dispute with the United States and opportunities available to Clarington to take further action. 1. Background Existing and Ongoing Efforts 1.1 The Municipality implemented a Clarington Vendor Directory to improve procurement accessibility. Staff are encouraged to utilize this directory when sourcing suppliers for Low and Medium Value Acquisitions, in accordance with the existing authority outlined in Procurement By-law 2024-052. The vast majority of the vendors currently listed on the directory are Canadian businesses. 1.2 The Economic Development teams across Durham Region are actively engaging with local businesses to provide tailored support. These groups offer guidance, facilitate connections to relevant government services, and share key strategies to help prepare for the potential change. 1.3 A centralized online resource, www.investdurham.ca/tariff, was launched to provide Canadian businesses with key contacts, available support programs, and practical guidance. This platform serves as a single access point for businesses seeking assistance and is regularly updated with relevant information. Less than 1% of Transactions are with Suppliers with a U.S. Address 1.4 In the absence of a defined classification for U.S. suppliers, determining the extent of U.S. business involvement in Clarington’s procurement is challenging. An analysis of suppliers using a U.S. address on invoices indicates that less than 1% of Clarington’s transactions between January 1, 2022, and December 31, 2024, fall within this category. Applying the same approach, almost 99% of transactions involve suppliers with a Canada-based address, with the remaining transactions linked to suppliers in Europe. 1.5 However, this does not entirely reflect U.S. supply chain involvement, as Canadian businesses source parts, materials, or products from the United States. Even if direct transactions with U.S. suppliers are limited, restricting procurement could negatively impact Canadian businesses that rely on U.S. manufacturing, making enforcement of such restrictions complex and potentially disruptive. Municipality of Clarington Page 3 Report FSD-008-25 2. Analysis Current Procurement By-law Favor Non-U.S. Products Amid Trade Disputes 2.1 Clarington’s Procurement By-law mandates awarding contracts to the lowest compliant bidder for tenders, ensuring open and fair competition. This approach helps the Municipality procure goods and services in a cost-effective manner while maintaining transparency and integrity in the procurement process. 2.2 Canada’s proposed retaliatory tariffs on U.S. goods will raise the prices of these products, making non-American alternatives more competitive. Consequently, under current practices, procurement decisions would naturally favour non-American businesses without requiring additional policy changes. Broader Impacts of Procurement Restrictions 2.3 While direct procurement from U.S. suppliers accounts for a small portion of Clarington’s transactions, restrictions on U.S. goods and services could have broader implications for both the Municipality and the Canadian market. 2.4 Many Canadian businesses rely on materials, components and/or finished products from the U.S. and imposing restrictions to these goods could negatively disrupt supply chains and impact Clarington’s service delivery. A key example is fleet vehicle procurement. Clarington manages a fleet of over 280 vehicles, primarily purchased from Canadian Businesses. 2.5 Front line services such as Clarington’s Fire and Emergency, seasonal road maintenance and storm recovery, utilize vehicles and equipment that are either wholly or in part manufactured in the U.S. or contain U.S.-sourced components. 2.6 Failure to provide these front-line services with safe and reliable equipment due to lack of, or downed equipment will have a direct impact on the Municipality’s ability to respond to emergency situations and winter seasonal storms, leading to an increased risk to the residents of Clarington. 2.7 Given the uncertainty surrounding the proposed tariffs, and the potential for significant impacts, it is essential to seek direct intervention and guidance from the province. Staff will continue to monitor developments and provide updates to Council should new opportunities or considerations arise. Municipality of Clarington Page 4 Report FSD-008-25 Further Opportunities Identified 2.8 The Municipality of Clarington is bound by Provincial and Federal legislation and trade agreements, including the Discriminatory Business Practices Act and Canada- European Union Comprehensive Economic and Trade Agreement (CETA). Staff recommend that the Municipality work with and support municipalities and other organizations in advocating for changes to the legislation and trade agreements that currently impact Ontario municipalities. 2.9 Alternative strategic initiatives can be adopted to align with procurement best practices while maintaining legal compliance and minimizing its impact on operations. These initiatives may focus on strengthening supplier engagement through expanded outreach and education initiatives to help businesses stay informed about procurement opportunities and better prepared to participate in the bidding process. 2.10 Staff will continue to collaborate with the Clarington Board of Trade and local Business Improvement Areas to strengthen and expand the Clarington Vendor Directory. By working closely with these organizations, Clarington can support businesses by increasing access to opportunities and fostering a more diverse and resilient vendor base that contributes to long-term economic sustainability. 2.11 The Durham Economic Task Force will launch a promotional campaign to highlight Durham’s independently owned and operated businesses, tourism operators, and food and beverage makers in Durham Region. This initiative encourages residents and visitors to support economic activity in Durham, which enhancing Durham’s reputation as a destination for businesses and tourism. 3. Financial Considerations The impact of trade tariffs could have both direct and indirect financial consequences. Reduced competition may lead to higher procurement costs, and supply chain disruptions resulting in delayed municipal projects. 4. Strategic Plan Not applicable. 5. Climate Change Not Applicable. Municipality of Clarington Page 5 Report FSD-008-25 6. Concurrence This report was reviewed by the Deputy CAO/Solicitor who concurs with the recommendations. 7. Conclusion It is respectfully recommended that Clarington does not revise its’ procurement policies at this time as it presents financial, and operational risks. Clarington can prioritize strengthening supplier engagement through alternative strategies while ensuring compliance with legal and trade obligations. It is crucial to seek guidance from the Province to ensure Clarington’s actions are aligned with broader regulatory frameworks. Staff Contact: Mandy Chong, Manager, Procurement, 905-623-3379 x2209 or mchong@clarington.net. Attachments: Not Applicable Interested Parties: There are no interested parties to be notified of Council's decision.