As a municipality, can we enact a local preference policy for procurements that are below the trade agreement thresholds? Is there any case law on this?

Let's start with your last question first: no, there isn't any case law we are aware of that prohibits or prevents a local preference policy for smaller spends. There may be specific statutory, regulatory or jurisdictional industry directives on this, but the courts will not likely wade into the issue of local preference. As we know, public-sector entities (with a few enumerated exempt entities) are bound to trade agreement obligations of non-discrimination for procurements above a stipulated dollar value. More specifically, there is a general prohibition on discrimination based on province of origin, with only a few enumerated exempt procurements. Any complaint about a breach of the trade agreements must go through the dispute resolution process set out in the agreement - not through the courts. Some of these agreements, notably the New West Partnership Trade Agreement (NWPTA), the Canadian Free Trade Agreement (CFTA) and the Comprehensive Economic and Trade Agreement (CETA) have begun to implement some fairly rigorous dispute resolution provisions, so it is likely that we will see an increase in challenges through this avenue in the coming years.

With respect to your first question, although there are no such restrictions for under-threshold procurements, we find that the majority of our municipal clients do follow the spirit and intent of the trade agreements, even for smaller-dollar contracting. In other words, they do advertise interprovincially, when it is practical - embedding a policy requirement to obtain at least three quotes for any procurement at or above $5,000, for example. We have certainly seen some municipal policies to the effect that, all else being equal on small dollar procurements, the municipality may award to a local supplier.

But when is "all else" ever "equal"? Although municipalities and community colleges in particular rely heavily on financial and other support from the community, we suggest that it is a bit risky to embed a local preference policy, even for smaller-dollar procurements. Remember that procurement policies are generally part of the public record and therefore readily available to challengers. Perhaps a situation will arise in which it doesn't make any economic sense to award to the local company, so you decide not to exercise the discretion embedded in policy. What then? Are you open to justifiable criticism for failing to exercise that discretion in favour of the local supplier? Worse yet, what if there is a requirement to award to a local supplier, all else being equal? In that case, you would be hard pressed to be able to bypass the policy, and may end up having to settle for less-than-optimum value. And if you were to draft such a policy, how would you define "local"?

To sum up, while there are no general legal impediments to implementing a local preference policy for under-threshold procurements, it may make more sense to remain silent on this issue. You don't need a policy for this: sourcing locally often makes the most economic sense for smaller-dollar spending, but enshrining this in policy would likely invite more criticism than benefit. As with all procurement processes, it is usually best to focus your selection criteria on legitimate business requirements.