Procurement Services

Tariffs are a tax on imported goods, paid for by the person or company who has imported the goods. A government may impose tariffs to generate revenue, protect domestic industries or deploy them as a diplomatic tool.

Tariffs increase the price of imports, making them less attractive to domestic consumers. Tariffs increase the price of goods and services in domestic markets by applying a tax on imported goods that is paid by the domestic importer.

On March 4, Vaughan became the first municipality in Ontario to ban U.S. suppliers after Mayor Steven Del Duca and Members of Council took decisive action to protect the local, provincial and national economy by approving a new procurement strategy that prioritizes Canadian products, goods and services, and bans U.S. suppliers from competing on or being awarded municipal contracts. As well, on March 25, Vaughan Council approved Mayor Del Duca’s Member’s Resolution calling for further support for local businesses as they respond to U.S. tariffs through the Vaughan Strong campaign. 

For more information on the procurement strategy, see Mayor Del Duca’s Feb. 5 Member’s Resolution: Protect Vaughan, Ontario and Canadian Businesses, the staff report brought forward to Committee of the Whole (1) on March 4, or the Mayor’s March 4 statement. 

For procurements below $133,800 (Goods and Services) or $334,400 (Construction) (“Low to Mid Value Procurements”), the City will leverage opportunities to favour goods made in Canada or services provided by Canadian businesses by increasing the Low Dollar Purchase threshold and increasing the use of invitational procurements and collaborative procurement organizations. For procurements valued at or above $133,800 (Goods and Services) or $334,400 (Construction) (“High Value Procurements”), the City will leverage collaborative procurement organizations, as well as apply evaluation methods to competitive procurements that would favour non-American vendors.

The City is taking a multi-faceted approach, which includes:

• Preference for Canadian suppliers: The City is directing all staff to prioritize sourcing from Canadian suppliers whenever possible.
• Ban on U.S. suppliers: The City is prohibiting U.S. suppliers from bidding on all competitive procurement opportunities, regardless of the contract value.
• Increased direct purchase threshold: The City has raised the dollar limit under which staff can purchase directly from a Canadian supplier. This change provides greater flexibility for City staff to procure goods and services directly from Canadian businesses, streamlining the process and supporting local suppliers.
• Established a new invitational procurement threshold: The City has introduced a new invitational procurement threshold, allowing staff to invite Canadian suppliers to participate in a competitive procurement process.
• Canadian supplier attestation: For procurement opportunities more than $25,000, suppliers will be required to submit a written attestation with their bid, confirming they meet the City’s definition of a Canadian supplier.
• Prioritizing Canadian contracts: The City will leverage existing contracts with collaborative procurement organizations that include Canadian suppliers whenever possible.
• Canadian supplier list: The City is creating a list of suppliers that meet its definition of a Canadian supplier, making it easier to identify and engage with qualified Canadian businesses.

For procurements with a value more than $25,000, suppliers will be required to submit a signed attestation as part of their bid submission to be considered for the opportunity. Suppliers that fail to submit the attestation or meet the “Canadian Supplier” requirement when requested by the City will not be eligible for an award.

To support Canadian businesses, the City has established the following definitions:

• Canadian Supplier means a supplier, manufacturer or distributor of any business structure, including a subsidiary of a foreign business, that conducts its activities on a permanent basis in Canada. The business, at the time of the bid submission of the applicable procurement process: 
  • has legal status in Canada (e.g. incorporated in, or business name registration with Canada, a Canadian province or territory) and has met all necessary legal requirements to operate in Ontario; and,
  • has permanent offices or production facilities in any province or territory of Canada, from which it regularly conducts business activities; and,
  • will provide goods that are made in Canada, as that term is understood by the Competition Bureau of Canada, and/or have the proposed deliverables provided by a workforce of which at least 51 per cent is based in Canada. 

• American Supplier means a supplier, manufacturer or distributor of any business structure that conducts its activities on a permanent basis in the U.S. The business: 
  • has its headquarters or principal place of business in any state or territory of the U.S.; and, 
  • will have the proposed deliverables provided by a workforce of which at least 51 per cent is based inside the USA.

• Other Supplier means a supplier, manufacturer or distributor of any business structure that is not a Canadian or an American Supplier.

These requirements are being applied on a go-forward basis, however, suppliers that have multi-year contracts or are part of a prequalification roster may be asked to submit a written proof to confirm their business status.

For any price adjustment requests, the City will require supporting documentation, which clearly lists the manufacturer of the goods, details the related cost increase (e.g., tariffs) and provides the amount of the increase. Acceptable forms of documented evidence from the manufacturer will be subject to City approval before any cost increase will be effective. Information such as the following may be provided:

• official manufacturer notice outlining the price increase and reason
• manufacturer's updated price list showing the revised rates and effective date
• government-issued documentation (e.g. CBSA notice for tariff increases)
• supplier or distributor correspondence with supporting manufacturer documentation
• third-party market reports or industry publications confirming cost increases
• customs documentation showing applicable rates and their impact on costs
  
   

The City reserves the right to deny the proposed cost increase if the documented proof provided by the supplier does not meet requirements. The City may refuse the supplier’s price increase request or agree to an amount less than what was requested, should it be determined that the request is not reasonable or more than the City’s budgetary limits.

To learn more about how the City is supporting local businesses during this time, visit vaughanbusiness.ca/tariffs. 

Suppliers should review the City of Vaughan’s definitions of a Canadian Supplier and an American Supplier (see above) to determine whether your business qualifies. Under the City’s current procurement strategy, all competitive bids now include a requirement that only non-American suppliers are eligible to bid. For affected procurements, this requirement will be included as an addendum.

The City’s new procurement strategy applies to all competitive bids moving forward. For bids currently in process, any affected procurements will now include this requirement as an addendum. Bids that do not have this added requirement are not affected by the new strategy.