Canada – European Union trade deal coming into effect September 21, 2017

September 7, 2017 - Gatineau - September 21, 2017 marks the entering into force of Canada’s procurement obligations under the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). Canada signed the agreement on October 30, 2016 to reduce trade barriers and to provide Canadian businesses expanded access to the world’s second largest economy.

The Government of Canada is updating its procurement rules to implement the Canada-European Union Comprehensive Economic and Trade Agreement

The CETA Government Procurement Chapter, will generate opportunities for Canadian suppliers by giving them access to all levels of the European Union (EU) government procurement market, valued around $3.3 trillion annually, while ensuring open, fair and transparent competition. The CETA will also provide reciprocal access for EU suppliers to Canadian government procurement, ensuring that taxpayers get the best value for their money.

For all trade agreements, including CETA, Public Services and Procurement Canada (PSPC), as the Government of Canada’s central purchasing agency and common services provider for procurement services, is required to comply with specific procedures when completing certain procurements. The Department is currently updating procurement procedures, instructions and clauses to reflect Canada’s obligations under CETA. These updates will ensure departmental policies are in compliance with the Agreement.

It is important to note that the CETA is expected to have a minimal impact on Government of Canada procurement activities, as the procedural rules and coverage align with Canada’s other international trade agreements, such as the World Trade Organization – Agreement on Government Procurement (WTO-AGP).

The CETA does, however, include some key differences. For PSPC and most of its client departments, the key difference between the CETA and Canada’s other international trade agreements is that procurement of dredging services are now covered. As such, in covered procurements, dredging equipment and vessels made and manufactured in EU member states will be treated in the same manner as dredging equipment of Canadian make and manufacture. This will apply to dredging procurements and construction procurements with dredging components.

In addition, also for the first time, Canadian Space Agency procurements related to certain types of satellite systems, are covered under CETA.

Furthermore, unlike the WTO-AGP and the North American Free Trade Agreement (NAFTA), the CETA does not allow for Small Business Set-Asides, but provides an exception for aboriginal businesses. As such, procurements that are set aside (i.e. reserved) for either Comprehensive Land Claims Agreements beneficiaries, or for aboriginal businesses under the Procurement Strategy for Aboriginal Business (PSAB), are excluded from the obligations of the CETA.

The CETA also requires the establishment of a free Single-Point of Access (SPA) for all notices of new procurements within five years of the Agreement coming into force. The Government of Canada is working to develop and implement the SPA within this timeline. Finally, it is worth noting that CETA expands the list of entities covered, including many additional Crown Corporations.

The Global Affairs Canada website provides a comprehensive overview of the CETA. Additional details on government procurement can be found in the Chapter 19 summary, or on the Buy and Sell website, which details the new obligations.

Further reading about the CETA:

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