Kyra Bell-PashtApril 16, 2013

Local Food Procurement:Trade Agreement Restrictions in

Ontario

Obstacles & Opportunities

• Trade agreements are on the rise• Under which foreign companies granted broad rights,

enforceable before trade tribunals (‘ISDS mechanisms’)– e.g. the right to nondiscrimination of products on the basis of

geographic origin – Companies increasingly exercising these rights ($$ litigation)– Limiting regulation in the public interest (i.e. for

environmental & local development purposes) (‘chill’)

• Environmental & food systems concerns are equally on the rise one solution: local food procurement Understanding trade agreement restrictions is key

to developing effective local food procurement policies

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Local Food Procurement in context

Ontario is affected by many trade agreements that potentially restrict its procurement activities, e.g.:

• The General Agreement on Tariffs and Trade (GATT)• The Agreement on Government Procurement (AGP)• The North American Free Trade Agreement (NAFTA)• The Agreement on Internal Trade (AIT)

And that may affect its procurement activities, e.g.:– Canada and European Union Trade Agreement (CETA)– Trans Pacific Partnership (TPP)

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Canadian Trade Agreements: Ontario

• Monetary thresholds – lowest for Ontario, $25,000, $100,000 MASH Sector (AIT)– n.b. No splitting to avoid trade agreement restrictions

• Exceptions (environmental, government purpose, etc.)– n.b. Interpreted narrowly

• Covered entities (Federal, Provincial, Municipal, MASH)– n.b. Toronto City Council motion for exemption from CETA (app. 50

similar Canadian municipal motions to date)

• Technical specifications permitted– But not if designed to avoid trade agreement provisions

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Procurement: Trade Restrictions & Allowances

• Subject to GATT & GPA procurement provisions• EU directives guide EU procurement policies, Emphasis on technical specificationsPublic Sector Food Procurement Initiative, 2003 encourages public bodies (hospitals, schools, prisons, and

canteens) to procure food in a manner that considers the principles of sustainable development (sustainability criteria)

specify fresh & seasonal produce in their tenders for food break larger contracts into lots

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Examples of Local Food Procurement policies: United

Kingdom

Subject to AIT

Environmental Goals & Sustainable Prosperity Act, ‘07

∙ province to develop draft procurement policy by 2009:

“Nova Scotia Preference” “In order to support the local manufacturing, agriculture and

aquaculture industries, Departments are authorized to apply a preference for goods up to and including $10,000 excluding taxes, which are manufactured or produced in Nova Scotia, when it is determined to be in the best interest for the Province of Nova Scotia “

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Examples of Local Food Procurement policies: Nova Scotia

Local Food Plus• Local sustainable food certification, broker &

consultant, have assisted– Markham, 1st Ontario municipality to develop local

food procurement policy, originally %10 LFP, then %5 increase/year

– University of Toronto, local food procurement policy, originally 10% LFP, incr. annually

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Ontario Local Food Procurement

Broader Public Sector Investment Fund• Grant program that supports increased amounts

of local food served in hospitals, schools, and other broader public sector institutions

• City of Toronto Local Food Procurement Policy– 2008, goal was %50 – 2011, goal adjusted to %25 in 7 years• Report of lessons learned

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Ontario Local Food Procurement,

Bill 36, Ontario’s Local Food Act• Government Bill that just passed 2nd reading“increasing awareness, access and sales by enabling the

government to set local food goals and targets, in consultation with stakeholders”– Possibility for local food procurement targets?

Ontario Local Food Policy: requiring ministries to consider local food procurements under $25,000

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Ontario Local Food Procurement

• Technical specifications• policies for food procurements that fall below

monetary thresholds• Focus on the MASH sector• support non-profit organizations to facilitate

procurement deals with the public sector

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Conclusions

Thanks to:Sustain Ontario

Kyra Bell-Pasht, Counselkyra@cela.ca

N.B. none of the information provided in this presentation consists of legal advice, and should not be relied on as such.

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Acknowledgements

www.cela.ca

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