1.3 Leverage government procurement to encourage Canadian-built vehicles

As purchasers of goods and services, governments certainly have a role to play in supporting and growing domestic industries. Altogether, federal, provincial and municipal governments as well as government-run agencies, procure approximately $200 billion each year. If used strategically, this procurement would act as a sizeable amount of economic stimulus that can bolster industrial development, incubate new technologies and innovations and create jobs. To accomplish these goals, government agencies programmed to seek out lowest-cost suppliers must recalibrate their thinking and look more broadly at the value of contracts to the domestic economy.

In recent years, Canada committed to lowering emissions through its vehicle fleet. In 2016, at a tri-nation summit, Canada, Mexico and the United States agreed to deploy more ZEVs across government-run agencies. Canada is also a signatory to the 2016 Government Fleet Declaration that commits to accelerating low-emission and electric vehicles into the fleet mix and encourage other provincial and municipal governments to do the same. Following this commitment, the federal government announced its intent to ensure ZEVs or hybrids comprise 100 per cent of all new light-duty administrative fleet purchases by 2030. Natural Resource Canada operationalizes this fleet commitment through its Greening Government Fleet guideline released in 2018.

Despite this noble effort, the government’s approach is not coordinated with Canada’s industrial development objectives.

In fairness, at the time in which Canada first made these commitments there were few, if any, Canadian-made products available to meet the government’s demand. Only some Plug-in Hybrid Electric Vehicle (PHEV) models, including the Windsor-built Chrysler Pacifica, were viable options, a fact that on its own should have sent alarm bells ringing throughout the halls of government.

Thankfully, the landscape is beginning to change. Production of EVs is coming to Canada with investments in GM Ingersoll, Stellantis’ Windsor Assembly Plant and Ford Oakville in the near future.

Electric vehicle charging in blue overlayed background with text federal fleet target, a bubble graph depicting 100% zev by 2030, an arrow pointing to text by 2030.

Further, it is the government’s own stated objective to advance and expand this industrial footprint of EV and battery production domestically. However, government procurement policy and the ambitions of fleet emissions reduction must compliment Canada’s industrial policy. Public dollars must support domestic investment wherever possible.

  • Natural Resources Canada must amend its Greening Government Fleet guidance to identify low-and zero emission vehicles assembled in Canada, including those that contain significant levels of Canadian parts content, for provinces and municipalities. Federal, provincial and municipal governments can undertake an assessment of existing vehicle fleets and their specifications and issue guidance to relevant agencies requiring them to include, where possible, Canadian-made vehicles in any requests for procurement. Canadian governments may also consider establishing price preferences for domestic-built EVs in procurement orders, similar to the rules set by the State of Illinois in November 2021.

  • Further extending the objectives of the Greening Government Fleet program, federal and provincial governments shall establish a joint fund that provides provincial and municipal procuring agencies the financial support to renew existing vehicle fleets with low-emission or ZEVs. Requirements that procurement bids include vehicles assembled in Canada or that contain significant levels of Canadian parts content shall apply wherever possible.