Menu Close

Construction industry pushes back on Saskatchewan’s local preference clauses

Western Canadian construction associations have again sought the help of the Saskatchewan Heavy Construction Association to see local preference clauses removed from provincial government tender and construction contract documents. Those clauses give Saskatchewan companies an advantage in bidding on public tenders.

The joint letter to the Chair and President of SHCA is signed by their counterparts at MHCA, Alberta Roadbuilders and Heavy Construction Association and the British Columbia Road Builders and Heavy Construction Association. Sent October 14, it in part reads:

It is well-established that local preference practices work against the economic interests of our provinces and our country. A 2019 report from the International Monetary Fund concluded complete liberalization of internal trade in goods can increase GDP per capita by about 4 percent — a significant boost to the economy especially during the pandemic.

The associations noted that the practices adopted by Saskatchewan, currently in an election campaign, directly conflict with national and the western Canada trade agreements that the province has signed. 

The letter noted the province recently awarded a construction contract to Saskatchewan company Ptozus Paving & Road Maintenance Ltd., despite the fact an Alberta-based company’s bid was $1.2 million, or 7%, lower.

The CCA also released on Oct 9, 2020, a statement reasserting its position that labour and trade must flow freely across jurisdictional borders in Canada, to ensure the country’s economy gets the greatest benefit from the return to GDP.

“Some regions have been harder hit economically than others. But the solution is not to reflexively turn inward. Interprovincial trade barriers are inefficient, and do not support fair, transparent and competitive procurement processes,” said Mary Van Buren, president of CCA.

“When we are facing one of the biggest challenges in our history, it is more important than ever that we stand united and work together.”

MHCA President Chris Lorenc said all construction companies and associations, and indeed taxpayers, should be speaking out against such trade barriers and local-preference procurement, as only open competitive bidding can guarantee taxpayers get the best value for their dollar from public procurement.

“The pandemic economic hit has been tough on all governments, businesses and economies but now is not the time to turn inward and reject the sound principles that support open and free trade.”

The CCA’s Hill Days campaign, in which the association’s members engage with federal ministers and opposition parties on industry issues, has put on its agenda the elimination of internal trade barriers.

Premier Brian Pallister recently sent a letter to Saskatchewan Premier Scott Moe, seeking his commitment to remove barriers to the free flow of trade across the border, specifically referencing local preference clauses within public procurement.