Tariff talk is returning for discussion at the next Prince George city council meeting on Monday, May 5.
At the March 10 council meeting, council directed city administration to prepare a report with options on how Prince George could navigate the challenges posed by the tariffs on Canadian goods imposed by U.S. President Donald Trump and counter-tariffs planned by the Canadian government.
For procurement involving goods or services that come from the United States, staff will present three options according to a report attached to the meeting agenda.
The report starts off by saying that because tariffs are threatened, withdrawn or altered on an almost daily basis sometimes, the instability of the situation makes it hard for governments at all levels to take decisive actions.
“There are many things to consider such as cost, efficiency, the lack of availability of equivalent goods outside of the U.S. (for example, IT and emergency/mobile equipment), and what defines a “U.S. supplier” or a “U.S. good,” the report said.
“A Canadian supplier as defined in trade agreement, is a supplier that has a place of business within Canada. U.S. companies often have branches that operate on Canadian soil and those companies would likely meet this definition.
“Also, one of the intangibles that should still be mentioned is maintaining continued good business relationships with U.S. suppliers through what may ultimately be a short-term challenge to that relationship.”
While staff said that restrictions on U.S. bidders for city procurement are likely not to violate international trade agreement, they could still provoke challenges based on contract and procurement law in the court system.
The first option presented by staff is to add criteria around informal solicitation preferences for Canadian suppliers when it is practical to do so and when a purchase falls under the threshold covered by various international trade agreements.
This would essentially mean that the city could support local purchases when they are too small to go through any formal procurement procedures.
Staff said this option is low-risk and would not expose the city to any legal challenges. However, routing some purchases through Canadian sources could end up costing the city more money and council would need to determine how much more it is willing to pay in those circumstances.
The report recommends a 10 per cent price premium as the cutoff as a starting point for discussion.
Even so, staff also said that because there could be some considerable operational challenges to excluding U.S. suppliers because of some items that can’t be acquired from Canadian sources like equipment for fire services, IT services, event services and products needed to operate civic facilities.
This is why the recommendation includes a mention of purchasing Canadian goods and services where it is practical to do so.
The second option is for council to direct administration to obtain legal advice in development new procurement policies that exclude U.S. suppliers.
“Any changes regarding excluding U.S. suppliers from formal procurements above threshold is still subject to significant legal risk and should be done so with careful consideration and legal advice,” the report said.
Consideration for those potential changes would include making sure that the city is not trying to influence an international dispute outside of its scope, making sure that the city’s procurement processes are entirely transparent and making sure that the changes are in line with any provincial legislation put in place due to the tariffs.
Due to the risks regarding some products that need to be sourced from the U.S., administration said it does not recommend option two.
The third option is simple: the city continues operations as normal.
“Given the legal complexities, as well as financial and operational impacts of excluding U.S. suppliers in a political landscape that is changing daily, there is merit in being still for a while until more certain outcomes of the tariff war arise. This is the option that administration is recommending.”
The meeting starts at 6 p.m. in council chambers on the second floor of Prince George City Hall. Meetings can be attended in person or watched online at princegeorge.ca.
