Ontario retaliates and adopts "Do
Not Buy New York Steel" Provisions
Written By: Cyndee Todgham Cherniak
Date: April 3, 2018
On March 28, 2018, the Wynne Government of Ontario promulgated a regulation, the "Suppliers from New York" Regulation, O.Reg 117/18, to prevent the Ontario Government from buying steel from the State of New York. The Suppliers from New York Regulation was made pursuant to the Fairness in Procurement Act, 2018, that was passed on March 8, 2018. The Suppliers from New York Regulation came into effect on April 1, 2018 - this is no joke. The Suppliers from New York Regulation is Ontario's reaction to the New York Buy America Act (which enters into effect April 1, 2018).
There are seven main points to keep in mind about the Suppliers from New York Regulation:
- The Suppliers from New York Regulation does not apply to any procurement processes initiated by a broader public sector entity or any procurement contracts entered into by a broader public sector entity (see Section 2);
- The Suppliers from New York Regulation does not apply to all types of steel products. It only applies in respect of “structural iron”, which is defined to mean "a product that is made of either wrought iron or cast iron or both and that is designed to carry a load, but does not include a product that contains any form of steel" (See Section 1);
- The Suppliers from New York Regulation does not apply to any procurement contract that was awarded before April 1, 2018, even if it was entered into on or after that date (See paragraph 6(1)(a)) or any procurement contract that will be awarded on or after April 1, 2018, if the contract will be awarded under a procurement process for which a request for bids, a request for proposals or other procurement document, including a request for qualifications, was issued before April 1, 2018 ((See paragraph 6(1)(b));
- The Suppliers from New York Regulation applies to any procurement process initiated by an Ontario Government entity for the construction, reconstruction, alteration, repair, maintenance or improvement of a surface road or bridge where the value of the procurement contract at the time that the procurement contract is entered into is expected to be greater than $1,000,000 U.S. dollars, and to any procurement contract that results from such a procurement process (See Subsection 5(1));\
- Exemptions may be granted (See Sections 7 and 8). Further, the Suppliers from New York Regulation does not apply to any procurement contract that is entered into for a purpose that is consistent with the objectives of an order issued under the Emergency Management and Civil Protection Act;
- The Suppliers from New York Regulation applies in respect of suppliers in New York and NOT all US states. The supplier must be from New York. Goods in transit through New York State are not caught unless the supplier is from New York. That being said, if the supplier of the steel is owned by a private equity firm or hedge fund or parent company located in New York, it will be necessary to determine if they are caught by the Suppliers from New York Regulation (See Sections 3 and 4); and
- Other US states may be targeted by Ontario. Currently, Texas has been warned.
For more information about Ontario's government procurement rules and whether they may affect your bid or contract, please call Cyndee Todgham Cherniak at 416-307-4168 or email cyndee@lexsage.com.
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