Approve the updated Procurement By-law included as Attachment-1 to report (2026) – 21255 – Procurement By-law Update and that the updated Procurement By-law come into effect…

2:18:15and we have Savan Harsh coming down to give us a presentation,

2:18:21and we have one recommendation following the presentation.

2:18:35Thank you, and it's a new face at the podium.

2:18:40So welcome, and I don't think we've seen you

2:18:42present to Council before,

2:18:43so welcome if this is your first time,

2:18:44and the floor is yours.

2:18:46Thank you so much.

2:18:48Good afternoon, Mayor Gatri and member of Council.

2:18:51My name is Savan Harsh.

2:18:53I'm the manager of procurement

2:18:54within the Finance Department.

2:18:58Today's presentation supports the staff report

2:19:01seeking approval of the updated procurement bylaw.

2:19:11The first purpose of today's presentation

2:19:14is to seek council approval

2:19:15for updated procurement bylaw

2:19:18with the bylaw coming into effect

2:19:19on September 1st, 2026.

2:19:22Second, to provide governance context

2:19:25on the city's procurement framework,

2:19:27trade agreement obligations,

2:19:29and why the city cannot apply a broad local preference.

2:19:33Third, to summarize the key update to the bylaw.

2:19:37Finally, to provide an overview of the Bio-Ontario Act,

2:19:41including new requirements for fleet

2:19:43and capital infrastructure procurements.

2:19:53The procurement bylaw is the city's core policy framework

2:19:57for how we acquire goods, services, and construction.

2:20:01It is a control framework

2:20:03for how public funds are spent.

2:20:06Council Oversights sets overall procurement policy

2:20:10through bylaw, approves budget,

2:20:13and provides a high level governance.

2:20:15Staff execution runs the procurement process end to end

2:20:19within delegated authority, manages contracts,

2:20:23and ensures compliance with legislative,

2:20:25trade, and internal requirements.

2:20:28The intent of this update is to keep the bylaw

2:20:32at the governance level

2:20:33and maintain detailed administrative procedures

2:20:36through internal policies, guidelines, and templates.

2:20:42The framework is also saved by,

2:20:47sorry, it's a wrong slide.

2:20:52The framework is also saved by legislation,

2:20:55the city's signing authority structure,

2:20:57conflict of interest requirements,

2:20:59and trade agreements such as the Canadian Free Trade Agreement,

2:21:02CFTA, and Canadian, Canada-European Union,

2:21:07Comprehensive Economic and Trade Agreements, CETA.

2:21:17A common question is why the city cannot apply

2:21:20a broad local preference.

2:21:23Covered procurement under the CFTA and CETA,

2:21:26where applicable, must be conducted through fair, open,

2:21:31transparent, and non-discriminatory processes.

2:21:34A broad local preference can restrict supplier access

2:21:38based on geography and make conflict

2:21:41with trade agreement obligations.

2:21:44The city can still support local and community outcomes

2:21:47through compliant tools such as

2:21:49invitational procurements, where permitted,

2:21:52and provincial directives that apply to specific categories.

2:21:57Bio-Ontario is different from a general local preference.

2:22:02It is a provincial direction for specific procurement categories

2:22:06and requires evaluation, documentation, and prescribed methods.

2:22:18The current procurement bylaw was approved in 2018

2:22:22and is due for a review.

2:22:24Since then, procurement practices, market conditions,

2:22:28technology, internal processes, trade thresholds,

2:22:32and provincial policy direction have changed.

2:22:35Threshold branch marking has been updated

2:22:37to better reflect current market conditions

2:22:40and trade thresholds.

2:22:42Low value limit increases from $35,000 to $50,000,

2:22:47and medium value from $100,000 to $139,000,

2:22:51aligning with the current CFTA thresholds.

2:22:55The bylaw introduces additional flexibility

2:22:58for medium value procurements through open

2:23:00and invitational procurement options.

2:23:03While continuing to prohibit the splitting

2:23:06and structuring of purchases to avoid approval thresholds,

2:23:10procurement requirements, or trade obligations.

2:23:14Governance and authority clarity is improved

2:23:17by aligning procurement approvals

2:23:19with the delegation of financial signing authority

2:23:22and clarifying the separation between the council's governance,

2:23:26governance role, and staff administrative responsibilities.

2:23:31Administrative controls are strengthened

2:23:33through post-emergency procurement reporting,

2:23:36Peter communication controls

2:23:38through the designated procurement contact,

2:23:41debriefing timelines,

2:23:42and stronger documentation expectations.

2:23:45Program improvements to support supplier performance,

2:23:48sustainability, or circular economy,

2:23:51sole source validation, and exemption has been updated.

2:23:56Supplier performance provisions are now consolidated

2:23:59within the Schedule F, allowing the city

2:24:02to further develop a more structured supplier

2:24:04performance program over time.

2:24:13The Bio-Ontario Act provides the legislative framework

2:24:16for the province to issue procurement directives

2:24:19requiring a public sector entities to prioritize Ontario

2:24:24and Canadian goods and services in specified procurements.

2:24:28For municipalities, the municipal

2:24:30by Ontario procurement directive is now in effect.

2:24:35The fleet vehicle requirements apply to municipalities

2:24:38as of April 13th, 2026.

2:24:41The capital infrastructure requirements apply

2:24:44to municipalities as of May 15, 2026.

2:24:48Local boards and municipal service corporations

2:24:50are subject to the relevant requirements

2:24:52as of June 1st, 2026.

2:24:56The directive has two main categories,

2:24:59light duty passenger fleet vehicles,

2:25:01and capital infrastructure.

2:25:04This is not a blanket local preference.

2:25:07It is a category specific, and it requires

2:25:09a process design, vendor evidence, documentation,

2:25:13and records that can support compliance if reviewed later.

2:25:17Staff are treating this as a compliance priority.

2:25:21However, there is a still interpretation issues,

2:25:25particularly around how provincial requirements

2:25:28interact with the trade obligations,

2:25:30federal funding conditions,

2:25:31and different project delivery models.

2:25:35For fleet procurements,

2:25:37the requirements apply to all new purchases or leases

2:25:41of new light duty passenger fleet vehicles,

2:25:44regardless of procurement value and methods.

2:25:48The sequence is to assess made in Ontario vehicle first.

2:25:52If those are not available or operationally feasible,

2:25:55the city then assess vehicle from Ontario

2:25:58vehicle producers, only where those options

2:26:01cannot meet the operation requirements,

2:26:04would the city proceed to other vehicle options.

2:26:08Capital infrastructure procurements are more complex.

2:26:12The requirements apply to all new capital infrastructure

2:26:15procurements, regardless of value,

2:26:17including construction and related major goods

2:26:20and services identified for the procurement.

2:26:23The compliance tool is the domestic supply and chain plan.

2:26:28Beaders identify the origin and value

2:26:31of major goods and services.

2:26:33Depending on the procurement,

2:26:35staff may use an evaluated approach,

2:26:37commitment-based approach,

2:26:38and approved alternative method

2:26:40where domestic supply chain plan is not feasible.

2:26:50The key message is that implementation involves

2:26:53more than simply adding a clause

2:26:55into procurement documents.

2:26:57Capital infrastructure procurements

2:26:59require project by project assessment

2:27:01before the procurement is issued.

2:27:04Staff must determine whether the directive applies,

2:27:08which goods and services considered major,

2:27:10which evaluation or commitment approach is appropriate,

2:27:13and how the final award recommendation

2:27:16remains defensible and compliant.

2:27:19There are also budget and schedule risk.

2:27:22Evaluation outcomes may not always align

2:27:25with the lowest bid, particularly where

2:27:28domestic content requirements affect scoring

2:27:30or award decisions.

2:27:33Supplier capacity, pricing, and project timelines

2:27:36may also be affected as municipalities across the province

2:27:40and other public sector agencies

2:27:42implement the same requirements.

2:27:45There is significant administrative work associated

2:27:48with the implementation, including market research,

2:27:51update to internal documents and tools, and templates.

2:27:56Non-compliance may create oversight and funding risk,

2:28:01including provincial record requests,

2:28:03compliance reviews, and potential impact

2:28:05on grant or funding.

2:28:12Internal implementation guidelines has been prepared

2:28:15to support fleet and capital infrastructure procurements.

2:28:19Templates and tools are being updated,

2:28:22including solicitation language, vendor declarations,

2:28:25domestic supply chain plan templates,

2:28:27evaluation tools, approval records,

2:28:30and reporting documentation.

2:28:32For ongoing updates, staff will continue

2:28:34monitoring provincial guidance and municipal best practices

2:28:38as interpretation and implementation

2:28:40evolves across the sector.

2:28:43In summary, the proposed procurement bylaw

2:28:46modernizes city's procurement framework

2:28:48while maintaining accountability, transparency,

2:28:51fairness, and value for money.

2:28:54The update improves operational flexibility,

2:28:57aligns the framework with the current trade thresholds

2:29:00and provincial direction, and strengthens

2:29:02the administrative and governance controls.

2:29:05Bio-anterior implementation is a significant

2:29:08and evolving compliance requirement,

2:29:11and staff will continue refining internal guidelines,

2:29:14templates, and practices.

2:29:16That concludes the presentation,

2:29:17and we are happy to take any questions.

2:29:21Okay, thank you.

2:29:22Great presentation, very thorough.

2:29:25Any questions or comments?

2:29:26Councillor Goller, Councillor Ciarce.

2:29:28Happy to move the boarder.

2:29:30Okay, do we have a seconder?

2:29:31Councillor Halt.

2:29:32Thank you, Chair Caron.

2:29:34Thank you so much for the presentation.

2:29:36I'm very excited to see the Bio-anterior Act

2:29:39being implemented here.

2:29:41There is the question of the shortages.

2:29:43Could you help me understand how,

2:29:46what is that threshold?

2:29:47At what point do we say this project

2:29:49is going to be delayed because there's a shortage,

2:29:51or we're actually going to go and procure the vehicles

2:29:55or the construction equipment from outside of Ontario?

2:29:58How do we balance that?

2:30:04Through the Chair and Councillor,

2:30:07for Bio-anterior Act vehicle requirement,

2:30:10there is no particular threshold.

2:30:11It applies to all irrespective of procurement type

2:30:15and procurement value.

2:30:18That award decision is based on the two steps.

2:30:22First is assessing based on the market research

2:30:25that any Ontario-made vehicle is available or not,

2:30:31or if it is operationally feasible based on the requirement.

2:30:36If it is not operationally feasible or not available,

2:30:39then assessing that Ontario producers.

2:30:41So there is a particular definition

2:30:43that which company would be falls under that Ontario producers.

2:30:49So if there is only Ontario producer vehicle available,

2:30:53then the second priority would be that.

2:30:56And if that is not operationally feasible or not available,

2:30:59and then only there will be alternative options.

2:31:04Okay, so we have to satisfy that we've checked

2:31:07to see if there is availability locally

2:31:09for Ontario-made vehicles and Ontario-made materials.

2:31:13And if they're not currently available,

2:31:15we don't actually have to wait on the projects

2:31:17or wait on the purchases.

2:31:19At that point, we can actually go outside.

2:31:21Is that correct?

2:31:23Through the Chair, that is correct for the fleet vehicles,

2:31:26but for a specifically capital infrastructure,

2:31:29it is way more complex.

2:31:30It depends on the domestic supply chain plan

2:31:34submitted by the beader.

2:31:35And there are particularly different methods

2:31:39for the evaluation, whether it will be

2:31:42the commitment-based approach or evaluated approach.

2:31:45So based on the proven cell directions

2:31:49and evaluation method,

2:31:50there will be different decision factors.

2:31:53Okay, thank you for this.

2:31:55And through you Chair, one final question.

2:31:57Sinas, this is a new system that we have.

2:31:59Are we going to be working with other municipalities

2:32:01so that we're all having the same systems

2:32:04and the same tracking of the information

2:32:07about where things are available

2:32:09and how we are ensuring that we're actually

2:32:12procuring locally?

2:32:17Through the Chair, we are closely connected

2:32:19with other municipalities,

2:32:21and we are closely monitoring other cities

2:32:24and municipalities approaches,

2:32:26as well as we are reviewing internally,

2:32:30developing the guidelines.

2:32:32As specifically, I would like to note

2:32:34that these requirements are evolving

2:32:37and interpretation and that implementations

2:32:39are still evolving into the across all the sector.

2:32:43And other municipalities and cities,

2:32:45they may have a different approach

2:32:46based on their internal bylaws and internal policies.

2:32:51We are closely monitoring and trying to implement

2:32:55as much as compliant with the proven cell violence.

2:33:00Councillor Klassen and then Councillor Allt.

2:33:05Yes, thank you through you Chair Caron.

2:33:08I have two questions.

2:33:09So I know that the report outlines

2:33:13that there are not any direct budgetary impacts,

2:33:17but it does outline that there are financial risks

2:33:20associated with this.

2:33:23So my question are, do we have any projects

2:33:25that are at risk at the moment

2:33:27and then that we have seen so far?

2:33:32And do we have an idea of the size of the impact

2:33:35for future budgets?

2:33:37Or is this at the moment, we just are unsure?

2:33:42Through the chair, Councillor, currently that impact

2:33:46is unknown.

2:33:47We don't have a particular data,

2:33:49like how much it going to be affected.

2:33:51There is identifies is based on that

2:33:54domestic supply chain plan requirement.

2:33:57And it may affect to that supply chain,

2:34:01available supply chain within the Ontario

2:34:03as across the all sectors and other municipalities

2:34:06implementing the same requirement.

2:34:09So that would affect the supply chain

2:34:11and pricing and availability of the materials.

2:34:15Others can jump in regarding the budget impact

2:34:19of the projects.

2:34:20We haven't identified any particular project

2:34:23as these requirements are pretty fresh

2:34:27and like implemented effective from May 15th

2:34:31and we are still working on the developing

2:34:33internal guidelines.

2:34:35And regarding the budget impact,

2:34:38it's still, it's not identified

2:34:42like how much it will be impacted.

2:34:47Thank you.

2:34:48One more.

2:34:52Just thinking about this, will there be an opportunity

2:34:55for council to hear more about the impacts

2:34:57if any moving forward?

2:35:03Through the chair, I'll take that question.

2:35:05So absolutely.

2:35:06And I think Savins articulated the kind of very context

2:35:10specific in case by case nature of this legislation.

2:35:13And so as we go through procurements

2:35:16that the legislation applies to,

2:35:19we will be identifying whether there are,

2:35:21we're seeing pressures on those budgets

2:35:23and if there's a need to adjust those budgets,

2:35:25you'd see those come back to you

2:35:26through quarterly budget monitoring reports

2:35:29with explanation related to the Bi-Ontario Act

2:35:33as being the driver of some of those adjustments

2:35:36and through the budget monitor

2:35:37or the budget process itself rather.

2:35:42Thank you.

2:35:43And thank you for all of the work that you've done on this.

2:35:45We'll keep an eye out.

2:35:47Great, great questions.

2:35:48Councillor Allt.

2:35:49Just a comment and thank you very much, Chair Caron.

2:35:52Thank you to both Mr. Harsh and to the finance staff

2:35:56for what I consider to be a very concise report

2:35:58that allied all my fears.

2:36:01I had questions written down

2:36:02and they disappeared as I listened to you.

2:36:04Thank you.

2:36:06Thanks for those comments.

2:36:07Councillor Busuttil.

2:36:09Yes, thank you.

2:36:10Through you Madam Chair, I drunk my memory.

2:36:13I believe municipalities do not follow

2:36:15under the broader public sector accountability act.

2:36:18Is that correct?

2:36:22Yes, through the chair, yes, that is correct.

2:36:25Thank you.

2:36:26And so I have a quick question about in the report,

2:36:31it speaks to on page three

2:36:33about the internal approval process for procurement.

2:36:37And you've got circular economy, sole source,

2:36:40a whole bunch of other criteria that you're looking at.

2:36:42So my question is, and it goes to your,

2:36:46the bylaw that's attached on page 13,

2:36:49it's 2.3 point G as in girl and 0.5 circular economy

2:36:55and environmentally responsible goods and services.

2:36:58So my experience with procurement is sometimes

2:37:02it's values laden of what our priority is.

2:37:05And so is in reading this, am I correct on

2:37:09in one particular situation,

2:37:12the priority might be price, circular economy,

2:37:15like does it fluctuate based on the project

2:37:19or is there a framework for decision making

2:37:22that's consistent that so it's about values, I guess.

2:37:28Through the chair, Councillor, thank you for the question.

2:37:32Regarding the circular economy

2:37:33and environmentally sustainability criteria,

2:37:36it depends on type of the project,

2:37:39type of the procurement method that is being used,

2:37:42whether it is a tender or a request for proposal.

2:37:47This update and that language under the procurement bylaw

2:37:51that enables the opportunity for sustainability criteria

2:37:55to incorporate into specification

2:37:58for particular procurement that can be evaluated

2:38:01if it is a type of procurement is a request for proposal

2:38:04where sustainability criteria can be evaluated

2:38:09based on assigned rated percentage

2:38:14that enables to promote sustainability materials.

2:38:18But it depends on the type of procurement,

2:38:20particular thresholds and which particular thresholds

2:38:25of legislation or trade agreements

2:38:27applies to that procurement.

2:38:30Thank you.

2:38:31So when I think about this,

2:38:32these are the basket of our values

2:38:34and dependent on the procurement and what the item is,

2:38:37it may change on kind of the order and the evaluation.

2:38:42Thank you.

2:38:42I also had some questions about risk,

2:38:44but I'll wait for future reports.

2:38:46Thank you very much for all the work on this.

2:38:49Any additional questions or comments?

2:38:51Mayor Guthrie.

2:38:52Thank you, Chair, and through you,

2:38:53can I just pull on the thread a little bit

2:38:56about what you mean by qualified suppliers?

2:38:59And I think my mind is going back to a few years ago,

2:39:03sort of like there was other cities

2:39:06that were wanting to,

2:39:08they had people wanting to bid on different types of services,

2:39:13but they weren't allowed to.

2:39:15So, and some of it was like union based issues

2:39:19and things like that.

2:39:20So are those similar restrictions

2:39:24that we have here as well?

2:39:28Union versus non-union?

2:39:33Through the chair, Mayor,

2:39:37like regarding the qualified suppliers,

2:39:40if that is in procurement process,

2:39:42if we have selected or gone through

2:39:45that supplier pre-qualification process

2:39:48and we have qualified particular group of suppliers

2:39:51for future projects or construction,

2:39:53then subsequent tender or subsequent procurement

2:39:57would be subject to that qualified list of

2:40:01bidders or available suppliers.

2:40:05Okay, so when a project or service

2:40:09becomes available, it gets posted, right?

2:40:11It gets posted on our systems.

2:40:14Only qualified people are able to bid on that.

2:40:19It's not quite open to sort of like for,

2:40:23it's not like a free for all for anybody to be able to bid.

2:40:27Through the chair, it is correct in cases

2:40:30of where we have pre-qualified the suppliers

2:40:34through the pre-qualification process.

2:40:36If it is not pre-qualified

2:40:37or haven't done the pre-qualification process,

2:40:40then it will be posted through that open competitive process

2:40:44subject to that particular thresholds

2:40:47applicable to that procurement.

2:40:50Okay, thank you.

2:40:51And then my next question is,

2:40:55and it's one that I think I just want to ask

2:40:57to just get it out in the public

2:40:59because I think many of us get asked this a lot,

2:41:02which is there's by Canada or on this case,

2:41:06by Ontario, and then it falls to the by local.

2:41:11And sometimes we hear from people that have bid

2:41:17and they are unsuccessful.

2:41:18And they are our local businesses or local trades

2:41:24or they are in Guelph.

2:41:27And yeah, they're not successful

2:41:29for the reasons that are laid out.

2:41:32Can you just tell everybody about how,

2:41:37I think under the municipal act,

2:41:39under these new legislations that we still have to,

2:41:44you know, have in certain criteria,

2:41:46we have to go with the lowest bid,

2:41:49but also with certain criteria attached to it

2:41:52that doesn't, it can't force us to go local,

2:41:55even though we may all want to.

2:41:58I just think it's really important

2:41:59that that gets clarified in the public session here

2:42:03because often we sometimes hear later on,

2:42:06oh, I bid on that or I don't know why I didn't get that.

2:42:09You know, and it, I don't know if anyone recalls,

2:42:12I think this kind of reared its ugly head

2:42:13if I recall corporate history on my, on me now,

2:42:17but I think it was like either an electrician

2:42:20or like a moving company for the old museum.

2:42:23And you know, they, a local electrician

2:42:28or a local moving company didn't, didn't get it

2:42:31and like a Kitchener company got it.

2:42:33And it was like so close like on the, on the amounts

2:42:36and there was a big thing in the paper about it.

2:42:39And everyone's like, oh, why don't,

2:42:40why can't we just support the company

2:42:42that's right here in Guelph,

2:42:43the jobs that are right here in Guelph.

2:42:45So could you explain that in reference

2:42:47to what's in front of us today

2:42:48on how decisions are made in regards to that moving forward?

2:42:53Through the chair, Mayor, thank you for the question.

2:42:56And this is the common questions in the procurement,

2:43:00why we cannot apply this procurement requirements

2:43:04and buy local.

2:43:06It is not this, that straightforward, it seems.

2:43:10It depends on the type of the procurement.

2:43:12Also the legislation requirement

2:43:15and that which trade agreement it falls under too.

2:43:19There are particular thresholds under CFT and CETA

2:43:23trade agreements that require that open competitive process.

2:43:28Also public procurement runs based on that core

2:43:33principles of open, fair and transparent

2:43:37and applying local preference without particular tools

2:43:42like it violates that fairness principles.

2:43:48Still, there are like city can still support

2:43:52the local community outcomes through compliant tools

2:43:55if it is applicable like invitational procurement,

2:44:01maintaining that open fairness

2:44:02and transparency principles of procurement.

2:44:07But as I mentioned that it will be depends

2:44:10on that particular thresholds of CFT and trade agreements

2:44:13which require open competitive processes.

2:44:16And one more thing that I would like to mention

2:44:18about any unsuccessful bidders or suppliers,

2:44:22then they can request the debriefing to procurement team.

2:44:26We have particular process in place

2:44:28where they can request for debriefing

2:44:30and we can provide them for that explanation

2:44:33that is our transparency to provide them

2:44:36how we have conducted procurement

2:44:38and our decisions are based on the transparency

2:44:40and open and fairness principles.

2:44:43Madam Chair, through you,

2:44:45thank you so much for explaining that.

2:44:47I think it was really important to sort of state it out loud

2:44:49that those values of fairness, transparency open

2:44:55like through this process is what makes it ultimately fair

2:45:00with the decision at the end of the day.

2:45:01So thank you very much for letting us explore that a little

2:45:04bit to get it out in the open.

2:45:05Thank you.

2:45:07I think that was really valuable and open

2:45:09because we do hear that as counselors.

2:45:11So thank you for raising that.

2:45:13Are there any comments or questions before we call the vote?

2:45:16We've got a recommendation before us,

2:45:18moved and seconded, anyone against?

2:45:22I'm seeing none.

2:45:23So that is unanimous.

2:45:24Thanks again for your presentation

2:45:26and for the good work being done on behalf

2:45:28of the city of Guelph.

2:45:30Our third item on the agenda this afternoon

2:45:33is something that was pulled from the information items