U.S. firms won $210M in Toronto city contracts in last 2 years. Why a ban on their bids matters

How much business does Toronto give to American-owned companies through city contracts?

To find out, CBC Toronto combed through open data on all of the competitive contracts the city has awarded to suppliers over the last two years — worth a collective $3.2 billion.

In that time, 10 per cent of contracts for city services were secured by American-owned companies, according to the analysis. The 76 contracts are worth a total of about $210 million or six per cent of the funds Toronto dolled out through competitive procurement between Dec. 6, 2022 and March 11 of this year.

Those contracts make up just a fraction of the city's procurement. But they provide an idea of what U.S. businesses stand to lose — and what Canadian suppliers could gain — in the trade war going forward if city council approves Mayor Olivia Chow's promised motion to bar American companies from all future city contracts later this month.  

"That'll get noticed," said Drew Fagan, a professor at the Munk School of Global Affairs & Public Policy.

"Toronto is the sixth biggest government in the country. We don't think about it that way, but it is, after the feds and the big four provinces … it's significant."

Economist Colin Mang says the move would have both symbolic and economic impact in the trade war with the U.S.

"It is going to cost Americans business and it's going to cost them jobs," he said.

Even though the vast majority of Toronto's procurement goes to Canadian-owned companies (84 per cent in CBC Toronto's analysis), Mang says banning U.S. bids would have a big impact on some of the city's largest contracts for architectural or engineering services.

"It might increase costs a little bit for the city if they're not able to tap the international markets, but ultimately, tax money then remains in Canada, which is also a good thing," said Mang, an assistant professor of economics at McMaster University in Hamilton.

The Ontario government has already banned U.S. companies from provincial procurement. 

Chow announced her plan to try and implement a similar ban for Toronto on March 6, alongside a move that has already limited bids for city contracts under $353,000 to Canadian companies. 

CBC Toronto's analysis found that 18 of the 76 contracts that went to American-owned businesses fell below the $353,000 threshold. Those contracts were worth a total of only $3 million — or one per cent of the total funds awarded to U.S. companies in the last couple years.

"Her initial plan is a little bit more symbolic," said Mang. "The small-time contracts are for small amounts of construction, or for some materials that some city departments need. This is all stuff that's delivered locally anyway."