Information for Contractors on the American Defense Production Act

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March 30, 2020 - Ottawa - On March 19, 2020, the United States (US) government enacted the Defense Production Act (DPA).

While the American DPA purports to extend the provisions of their legislation beyond US borders, US law has no force or effect outside of the US with regards to industries operating in Canada. This means that industries that operate within Canada, including defense contractors, are subject to Canadian laws and are not subject to the provisions of the US DPA.

In cases where a Canadian contractor has a contract with the US government, it is free to continue to supply the US government, however, Canadian provincial, territorial, and federal Orders prevail.

While there are currently no Canadian emergency Orders issued by the federal government that would supersede any contractual obligations, all contractors are required to abide by provincial and territorial Orders. For more information, please see Information for Contractors on Workplace Closures.

Furthermore, if the performance of a contract for the US government interferes with a contractor’s obligation under its contract with Canada, the Government of Canada would have recourse to the remedies in the contract (for example: damages or termination).

For additional information on this subject, please contact your Contracting Officer as soon as possible.

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