Strengthening Local Economy Through Local Procurement

Ontario Regulation 422/23, enacted under the Building Ontario Businesses Initiative Act, 2022, aims to strengthen the provincial economy by promoting the procurement of goods and services from Ontario-based businesses. This regulation encompasses several key definitions, eligibility requirements for businesses, stipulations regarding procurement processes, and implementation timelines.

A business qualifies as an Ontario business if it meets specific criteria: it must be a supplier, manufacturer, or distributor with a permanent operational presence in Ontario and either have its headquarters in the province or employ at least 250 full-time staff at the time of procurement. Public sector entities can rely on representations from businesses to verify their eligibility as Ontario businesses.

The regulation outlines the types of goods and services that fall under its purview. All goods and services are considered prescribed, with a few exceptions, including treasury operations services procured by the Ministry of Finance or the Ontario Financing Authority, goods or services required during emergencies, goods or services procured via standing offers or multi-use lists, commercial sale goods or services or those used in their production, legal services provided by lawyers, paralegals, or notaries, expert witness services for court proceedings, and goods or services unavailable from an Ontario business.

Specific monetary thresholds for procurement processes are set forth in the regulation, which differ based on the type of public sector entity. For government entities, the thresholds are $30,300 for goods and $121,200 for services. For designated broader public sector organizations, both goods and services are set at $121,200. These thresholds determine when Ontario business preferences apply during procurement processes.

The regulation mandates a preference for Ontario businesses in procurement processes through two mechanisms: limiting eligibility to Ontario businesses for participation in procurement and allocating a 10% evaluation advantage to Ontario businesses eligible for open procurement processes. Additionally, public sector entities are exempt from these regulations when their procurement processes are governed by international or domestic trade agreements that require non-discriminatory treatment, ensuring compliance with broader trade commitments while promoting local businesses.

Ontario Regulation 422/23 is an effort by the provincial government to bolster local businesses through strategic procurement practices. By establishing clear criteria for what constitutes an Ontario business and outlining preferences for procurement processes, the regulation seeks to improve Ontario’s economic landscape while ensuring that public sector entities prioritize local suppliers.

Ontario (422/23) January 17, 2024