Guidance on University purchases and U.S. tariffs

Institutions have been operating under much uncertainty since the United States imposed tariffs on Canada on March 4. These tariffs bring with them unknown cost increases, as well as restrictions on eligible suppliers for procurement.

While approximately 90 percent of University spending is directed toward businesses based in Ontario and Canada, careful consideration is needed around supply chain impacts as the tariffs apply to the origin of goods and not the location of the supplier.

This memo provides senior leaders with guidance regarding procurement while the U.S. tariffs remain in place. As the situation is evolving rapidly and changing frequently, updates will be provided regularly.

When in doubt, leaders are encouraged to reach out to Procurement & Contracts for situation-specific advice.

Effective March 4, 2025, certain goods imported into Canada and originating in the U.S. are subject to a surtax in the amount of 25% of the value for duty in accordance with United States Surtax Order 2025. The value for duty is determined in accordance with sections 47 to 55 of the Customs Act.

The surtax will only apply to goods that originate in the U.S., which shall be considered as those goods eligible to be marked as goods of the U.S. in accordance with the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations. The surtax will apply to goods imported for commercial and personal purposes, even when exported from a country other than the U.S. into Canada.

Surtax will be applied on certain goods originating in the U.S. The list of products from the United States subject to 25 per cent tariffs effective March 4, 2025 can be found on the Finance Canada website.

The administration of the United States Surtax Order (2025) is the responsibility of the Canada Border Services Agency (CBSA).

Even with tariffs in place, the University will continue to follow the Building Ontario Businesses Initiative Act (BOBIA) for procurement under $121,200.

An Ontario business is defined under BOBIA as “any supplier, manufacturer, or distributor that conducts its activities on a permanent basis in Ontario; and, at the time of procurement, has its headquarters (or a location with at least 250 employees) in Ontario.”

Preference is given to Ontario businesses as follows:

• For procurement processes under $3,000 (excluding taxes), departments should give preference to Ontario businesses for their purchases, where feasible.
  
  These purchases can be made via a Purchasing Card up to $3000 including taxes. If the vendor will not accept a Purchasing Card, a requisition is required. If a purchase is made via requisition, please submit the single written quotation along with the requisition number to purchasing@laurentian.ca.
   
• For procurement processes between $3,000 and $9,999 (excluding taxes), departments should give preference to Ontario businesses in purchases where feasible.
  
  Departments will obtain a single written quotation and submit it along with the requisition number to purchasing@laurentian.ca.
   
• For procurement processes between $10,000 and $121,199 (excluding taxes), preference will be given to Ontario businesses in purchases.
  
  Procurements at this value must be undertaken by Procurement & Contracts ONLY. Please advise Procurement & Contracts of your requirements via email at purchasing@laurentian.ca.

Between domestic and international trade agreement thresholds of $121,200 and $336,000, the University will give preference to Canadian businesses, where feasible, to ensure compliance with trade treaties or research agreements, and to ensure best value for money for the University.

The University will continue to maintain open and competitive procurement processes that comply with applicable laws and trade agreements, until or unless otherwise notified by government officials.

Units and departments should plan for increased costs as a result of tariffs applied directly to impacted products, or where increases may be embedded within the total cost as part of the supply chain of the good or service.

Departments and units should work directly with key suppliers and distributors to ask and understand:

• Cost implications for existing contracts for products/services;
• What alternatives may be available for contracts that are ending; and
• The supplier/distributor’s plans for alternative sources for goods and services in the event the supply chain is disrupted. It should be expected that certain supplies may not be available, so early planning to seek alternatives is encouraged.

COU’s joint procurement-legal working group meets to discuss common issues, share information, explore the potential for common and consistent implementation of procurement related directives/guidance, as well as seek support for central information including but not limited to: a Iist of suppliers with goods that are tariff-free, including guidance on product origins, an appeals process for unfairly applied tariffs, and communication and guidance from Supply Ontario to the greatest extent possible.

The COU’s joint procurement-legal working group also continues to work with buying groups (e.g., the Ministry of Public and Business Service Delivery, OECM, and Supply Ontario) to conduct assessments of agreements potentially impacted by tariffs. The working group will continue to monitor the landscape and update the list.

Should you require any assistance or have any questions regarding tariffs, customs clearance and purchases, please contact purchasing@laurentian.ca.