Letter to the Editor: City spending locally ‘returns much more’ than saving

Cornwall city councillor Justin Towndale. (Newswatch Group/File)

At the January 25th meeting of Council, I put forward a motion, seconded by Councillor David Murphy to explore the possibility of changing the RFP process of the City of Cornwall to see if there is a way to allow for preference for locally based companies. Now that there have been a number of media editorials on the subject, I’d like to comment on the matter.

First and foremost, my motion requested a report to address the issue. The issue has come up previously, and was raised last year during the RFP process for the purchase of pharmaceutical drugs at the Glen Stor Dun Lodge. The majority of Council (a vote of 8-2, with one conflict declared) rejected the proposal from an Ottawa company as it was believed that the local company could provide the same service.

In the end, Council had to rescind its previous decision, in part due to a legal opinion that was received. While I cannot disclose legal advice that Council has or has not received, I can say that as a result of our discussion with our attorney, I decided to bring my motion forward. Any commentary in the media about legal advice received by Council is speculation at best.

We will receive a more detailed report in the coming weeks that will clarify a few things, including the legality of the motion. The City will not pass a by-law or any such motion that our attorneys deem illegal. If our attorneys tell us that it cannot be done, then it will not be done. It would be self-defeating and put the City at risk of legal repercussion. Any suggestions that we are putting the City in a precarious legal position are premature until we get more information.

We have heard that other municipalities may also have similar clauses. If so, then we would be within our right to explore similar options. It would also suggest that ‘buy local’ clauses are permissible in certain circumstances. Part of my motion is also designed to look at giving Council the ability to refuse an RFP without any repercussions. This would helpful for future decision making.

It has been suggested that businesses should automatically increase their bid prices by 5%. This would be a poor business decision. By arbitrarily increasing a bid, its very likely that a company would place itself entirely out of competition altogether. Should the City implement a ‘buy local’ clause it would still make the best business sense to bid as low as possible in order to win the contract.

Would this idea increase City spending? Yes, but any increase would be rather minimal. As an example, 5% of $1000 is $50. That extra $50 invested locally would return much more than saving it. Recently, I was speaking to a local resident who was in favour of my motion and she gave me an example of a bidding process that her company participated in (not with the City). Her company bid $50,100 and lost to another company that bid $50,000. A $100 difference wouldn’t be much to the City, but a $50,000 contract is a big deal to any company.

As I have said before, local companies pay local taxes, and they employ local people. These local employees in turn pay local taxes and spend their money locally, at other local businesses. This creates a positive cyclical economic effect.

It has been further suggested that this motion is solely for political gain. Based on this suggestion, it could be argued that everything that we do as Councillors is for political gain. As such, I find this argument flawed. I did bring the idea of buying local up during the election. As politicians we were elected to establish policy for the City. In bringing forward my motion I am keeping in line with my discussions from the election and exploring ways that could potentially benefit City businesses. This is my job, and it is why I am here. Its up to Council to challenge and change the status quo.

I look forward to receiving the requested report and legal opinion. From there, we will see what out next steps are.

Justin Towndale
Councillor, City of Cornwall