The Thunder Bay Chamber of Commerce is speaking out against the Ontario government’s move to centralize procurement in the province.
On Nov. 16, Premier Doug Ford announced his government was creating Supply Ontario, a new centralized procurement agency that it says will supply hospitals, schools, and public sector offices with the goods they need, all while saving taxpayers money.
The problem with that strategy, according to Chamber president Charla Robinson, is that it will keep many smaller northern Ontario businesses from being able to bid for government orders.
“It’s very hard for someone like a Lowery’s in Thunder Bay to be able to submit to be part of that type of a centralized procurement, usually because there’s such a massive criteria,” Robinson said. “You know you need to be able to provide 150,000 different items within 24 hours delivery.”
That makes it hard for businesses outside the Greater Toronto Area to get in on the procurement process, she said.
“I don’t have a very good feeling about it,” said Jason Copeman, the regional director of MGM Electric in Thunder Bay. Right now, his company is a supplier to some provincial ministries, as well as local health and education organizations through the Lakehead Purchasing Consortium.
“I don’t think it’s going to benefit any businesses in northwestern Ontario,” he said.
MGM Electric has four competitors in Thunder Bay, Copeman said. There are nearly 60 electrical distributors in the GTA. It will be hard to compete with their purchasing power, he added.
In April, 2019, the northern chambers of commerce wrote to the province, calling for it to ensure that provincial procurement policies provide the best possible value to regional communities. Around the same time, the Thunder Bay Chamber of Commerce met with the deputy minister of energy, northern development and mines to voice its concerns, Robinson said.
Government should buy in bulk: Ford
It proposed a regional hub approach to purchasing, similar to the Lakehead Purchasing Consortium, so school boards and hospitals can choose to purchase from regional providers. But the government has touted its centralized approach as the most economical, in a news release announcing Supply Ontario, issued Nov. 16.
“When people go shopping, they often buy in bulk to save money. We need to do the same thing in government,” said Premier Doug Ford in the news release.
Ontario’s efforts to source personal protective equipment (PPE) during the COVID-19 pandemic “shed light on the fragmented nature of Ontario’s supply chain system,” the release read.
Government competing with business
But one local PPE supplier says telling healthcare providers and other organizations to source equipment from the government amounts to the province competing with his company for business.
Dean Kowalchuk says educational and health care facilities reached out to his company, Kam Industrial Supply Ltd., at the start of the pandemic — desperate for PPE. Now that PPE is listed among the short-term priorities for Supply Ontario, he fears that will dry up.
It’s impossible for Kowalchuk to say how much business he might lose as a result of the change, but it’s “thousands of dollars,” he said.
“When I’m from Thunder Bay, and I’m born and raised here, and I’ve made my living here, and serviced all of the Thunder Bay and northwestern Ontario clientele for as along as I have, it’s difficult when you find out that your competitor’s not another supplier up the street, or maybe even one from just outside the town, but your competitor all of a sudden has become your government,” Kowalchuk said.
Because Thunder Bay is a provincial government hub, local businesses stand to lose a massive amount of money if government entities are all forced to purchase through a central agency, Robinson said.
The Chamber, she added, will continue to urge the province to look at the issue more broadly, rather than moving forward with full, centralized purchasing because of a bad experience procuring PPE.
“All of the government money can’t just be spent in the Toronto area,” Robinson said.