Canadians hope for ‘common sense’ on Buy American as Biden talks infrastructure

U.S. President Joe Biden lifted the veil on Mar. 31 on a broad and ambitious $2 trillion in infrastructure spending but Canadian businesses, contractors and suppliers were left still wondering if they will be able to share in the largesse.

Stakeholders north of the border, well familiar with Biden’s campaign-trail promises to impose more rigid “Buy American” rules for government contracts, are still waiting to find out just how stringently those restrictions will be enforced.

“I don’t think anybody really knows just how strident the Biden administration is going to be,” said Jesse Goldman, an international trade lawyer and partner at Toronto-based BLG.

“There’s a lot of uncertainty here — the numbers are very large, the concerns are pretty profound and the track record of Democrats over the last several decades has not been one of openness to trade.”

And Biden’s only getting started.

Mar. 31’s tranche is just the first piece of a 10-year, $4-trillion process to rebuild the U.S. economy by restoring the lustre of American manufacturing, overhauling home care, renewing roads and bridges and lacing the country with electric-vehicle charging stations, to name but a few of the goals — all while combating climate change, to boot.

Given the price tag, to say nothing of the U.S. political climate and the challenge of getting his plans through a deeply divided Congress with a paper-thin majority in the Senate, it’s hardly surprising the president is attaching protectionist riders.

In truth, the measures broadly known as Buy American have been on the U.S. books for decades, and actually comprise two tracks: one covers projects funded directly by the federal government, while the other — often referred to as “Buy America” — kicks in when federal infrastructure money gets transferred to the state, regional or municipal level.

Canada’s already largely exempt to the former, including the executive order Biden signed in the earliest days of his presidency, thanks to commitments the U.S. has already made to the World Trade Organization.

There is, however, a fundamental truth that both countries learned in 2009, the last time the U.S. imposed restrictions on foreign contractors and suppliers: doing so ultimately does more harm than good on both sides of the border, given the closely knit nature of the two economies.

“There’s clearly a desire in the U.S. to use government procurement money to support U.S. workers and jobs, and we get that,” Kirsten Hillman, Canada’s ambassador in Washington, said in an interview.