Monday, November 16, 2015

Buying local is good unless you are a government organization

One of the things that we are told is that buying local is good. The provincial government has a B.C. Buy Local program which reminds us of this fact via adverting throughout Metro Vancouver.

In BC, there are organizations which promote buying goods and services from local businesses. The following infograph is from LOCAL BC “a non-profit local business alliance working to strengthen communities, grow the local economy and build strong, sustainable businesses by encouraging a shift in local purchasing by consumers, businesses and institutions/government.”

"Why Buy Local" infographic from LOCO BC.

While we’re told that buying local is good, we are also told that free trade is key to ensuring a successful Canadian economy.

While non-local businesses can now access local markets easier, free trade agreements in theory also make it easier for local businesses to gain access to non-local markets.

This almost seems like a paradox. Should we be buying our apple from the Okanagan, or the free trade apples from Washington State? Should we be buying Ikea future, or quality goods made locally?

In 1995, the federal government, provinces, and territories signed the Agreement on Internal Trade. BC, Alberta, and Saskatchewan signed the New West Partnership in 2010. These agreements bar local governments, provincial governments, and their various agencies from preferring to procure local goods and services in some cases.

Metro Vancouver staff recently put together a memo for its Performance and Procurement Committee about buying local and trade agreements.

Metro Vancouver staff note that “the Agreement on Internal Trade and the New West Partnership Trade Agreement prohibit the use of measures that would restrict or impair trade to the Agreement’s respective signatories for goods and services valued at or in excess of $75,000 and $200,000 for construction. In addition these opportunities require electronic postings that attract international attention.”

Even with these trade agreements and their procurement practices, Metro Vancouver still ends up getting the vast majority of its goods and services locally. “Approximately 91% of all purchases (as measure in total dollars) are ordered from vendors within the province of British Columbia and approximately 83% are from within a member municipality.”

While the memo doesn’t say is these are local offices of larger national or international organizations, it is telling how important a local presence is.

I find it interesting that the BC government spends money on adverting telling us to buy local, but has signed agreements which prevent governments from preferring local businesses.

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