June 30, 2017 - Gatineau - The Canadian Free Trade Agreement (CFTA) enters into force on July 1, 2017. The CFTA replaces the Agreement on Internal Trade (AIT), which has been in place since 1995, and will apply to the federal government as well as all provinces and territories.
The CFTA will apply to all procurements commenced on or after July 1, 2017, while the AIT will continue to apply to all procurements commenced before July 1, 2017.
The CFTA improves on the AIT and will have significant benefits for Canadians and businesses across Canada. Under the CFTA, governments have committed to a more comprehensive set of rules to create a modern and competitive economic union for all Canadians. The CFTA will enhance the flow of goods and services, facilitate investment and labour mobility, eliminate technical and interprovincial barriers to trade, expand coverage, promote regulatory cooperation within Canada, improve productivity and encourage investment in Canadian communities. This includes the government procurement chapter of the CFTA, which has also been revised to better promote more open and modern procurement practices that create a level playing field for companies across Canada. The procurement chapter has been aligned with Canada’s international trade agreements. It is therefore expected that, overall, the CFTA is to have a minimal impact on Government of Canada procurement activities.
The CFTA is similar to the AIT, with the exception of a few key differences. For example, the CFTA:
- has broader coverage than the AIT, using a negative list approach that covers all government procurement with the exception of entities, goods, and services that are specifically listed in the market access schedules for Canada and each province and territory
- allows for small business set-asides that are part of a small business set-aside program
- contains some exceptions for Public-Private Partnerships and
- includes obligations for technical specifications in tendering requirements
Several of the key provisions of the AIT that have been retained in the CFTA, include:
- maintaining the AIT’s flexibility on bid periods, referring only to "a reasonable time," rather than the numeric minimums set out in international trade agreements and
- maintaining the AIT’s thresholds; although note that these thresholds will now be revised every two years to adjust for inflation
The Innovation, Science, and Economic Development website provides an overview of the CFTA. Additional details on government procurement can be found in the Chapter 5 of CFTA.
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Please note: This news item was updated on July 7, 2017 to correct a change in the publication date of the news item.