A scuffle between the federal government and the U.S. over an overhaul of a British Columbia ferry terminal wouldn’t likely repeat itself in Ontario. Even so, the province says it would not tolerate the “Buy America” rules at the heart of the B.C. dispute being applied in Ontario.

“Should a situation arise in Ontario where Buy American or other similar legislation is being applied extraterritorially in Ontario, the government would explore all options to resolve the matter to ensure that barriers to trade are reduced,” said a statement from International Trade Minister Michael Chan’s office

Buy America laws have rankled the federal government, and no more so than in the case of the Prince Rupert ferry terminal in B.C. The government of Alaska wants to launch a $15-million overhaul of the ferry terminal, which sits on land it has leased from the Prince Rupert Port Authority and uses for the Alaska Highway Marine System. But since it is a U.S. government project, all iron and steel products for the project fall under Buy America laws. As a result, the materials must be manufactured in the U.S.

International Trade Minister Ed Fast said last week that Ottawa was “disappointed” Alaska wasn’t seeking a waiver from the Buy America provisions. In response, Fast issued an order under the Foreign Extraterritorial Measures Act. The order essentially blocks construction bids on the project through a threat of substantial fines for complying with the American-made measures.

“We have been clear: the application of protectionist Buy America provisions on Canadian soil is unacceptable and an affront to Canadian sovereignty,” Fast said in a statement. “Buy America provisions deny both countries’ companies and communities the clear benefits that arise from our integrated supply chain and our commitment to freer and more open trade.”

Canadian steel producers hailed the move, with the Canadian Institute of Steel Construction congratulating Fast and Ottawa for the order. A good deal of Canadian steel is produced in Ontario.

“This sends a strong message to our trading partners around the world that Canadians and the Canadian government will stand up to any threats to our sovereignty, our economy and Canadian jobs," Ed Whalen, president of the Canadian Institute of Steel Construction said in a statement.

Canadian Steel Producers Association president Ron Watkins wrote a blog post on his group’s website saying members “fully support Minister Fast’s action in defending Canadian economic sovereignty, and the right of Canadian industry and its workers to compete for work within their own country. (One can only imagine the outcry in the United States if this table were turned.)”

The government of Alaska has responded by hitting the pause button on the Prince Rupert project.

Chan’s office says Buy America requirements represent barriers that would “hinder” economic benefits for Ontario and its trading partners. It also said the province has “no intention” of bringing forward anti-Buy America legislation.

“While we support the federal government’s use of the Foreign Extraterritorial Measures Act to block the use of Buy American rules in the case of the ferry terminal in Prince Rupert, there are no similar projects that would require this sort of intervention in Ontario.”

The Buy America provisions were an irritant between Canada and the United States in the wake of the 2009 recession when the U.S. government restricted who could bid for public sector contracts such as waterworks or infrastructure improvements financed by a massive stimulus program to revive the American economy. However those restrictions were later eased.

Province says it wouldn’t put up with ‘Buy America’ rules

Read this for free.