Graham defends tendering process
Published Friday June 5th, 2009
Economy | Union upset company lost provincial contract to Ontario company
Premier Shawn Graham says New Brunswick companies benefit from the free flow of goods and he can't interfere with tenders to ensure local companies win government contracts.
About 90 per cent of New Brunswick's manufactured goods are sold outside the province, he said, so companies rely heavily on interprovincial agreements that restrict governments from awarding contracts to local firms if they don't offer the lowest bids.
Earlier this week, the president of a union local at Kent Homes questioned why a $700,000 contract to build 10 mobile classrooms for the provincial government was awarded to a Mississauga, Ont., company.
The company had outbid Kent Homes by less than $5,000.
Paul Bastarache questioned why Graham didn't fight to keep the jobs and money in New Brunswick, as the local spinoffs and taxes would have exceeded the difference between the two bids.
Kent Homes manager Rheal Maillet also called on the government to show some common sense to allow more money to be injected into the local economy during tough economic times.
But Graham said the province could face stiff penalties if it doesn't follow the interprovincial free trade agreements.
"Our economy depends on free trade and that's why I sympathize greatly with the workers on the fact that the company was not competitive in the bid, but the trade agreement that's in place today also benefits companies a great more than it hurts them," said Graham.
However, the Opposition said when it comes to spending taxpayers' dollars, exceptions should be made to make sure the money stays in New Brunswick.
"This whole exercise is to save New Brunswickers (money), to have the best product for the best price," said Claude Williams, the Progressive Conservative MLA for Kent South.
"But when you look at the calculation, and look at what New Brunswickers will be losing on this contract - and I mean in HST, in payroll tax and all the value of the contract, all the material that would have been bought here in New Brunswick ... I'm not sure that New Brunswickers are having a bargain."
The provincial government signed an interprovincial trade agreement during the Council of the Federation meetings in Moncton two years ago.
The policy aims to eliminate protectionism by provinces favouring local companies.
Procurement laws allow the provincial government to give preference to a New Brunswick company if its bid is within 10 per cent of the lowest bid on a contract worth less than $10,000.
Preference can be shown for an Atlantic Canadian firm that bids within 10 per cent of the lowest bid on a contract worth less than $25,000.
Graham pointed to the softwood lumber agreement as an example of a free trade agreement that allows New Brunswick companies to benefit from the free flow of goods across borders.
"We benefit from these trade agreements and we cannot start cherry-picking certain aspects of the agreement on the rare occasion they're not to our province's satisfaction," he said.
Graham met with Prime Minister Stephen Harper, as well as several premiers and United States representatives, on Wednesday.
Harper said Canadian firms are reportedly finding it more difficult to win contracts in U.S. cities, and he called on the provinces to support the idea of bringing local contracts under the free-trade agreements.
"The economies of the United States and Canada are so intertwined that by actually putting up protectionist rules it will delay a number of these contracts being announced," said Graham.
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