Purpose
The purpose of policy notification (PN) -122 is to inform PWGSC Acquisitions Program contracting officers of the effect of international trade commitments regarding procedural rules and coverage with the implementation of procurement obligations under the Canada-European Union Comprehensive Economic and Trade Agreement.
Effective date
This policy notification is effective September 21, 2017. The Canada-European Union Comprehensive Economic and Trade Agreement government procurement obligations will enter into force on September 21, 2017. The Standard Acquisitions Clauses and Conditions (SACC) Manual and Supply Manual have been updated to reflect the changes.
Introduction
International trade agreements help to foster global competition and innovation by enabling Canadian suppliers to compete on a more even playing field with firms in other countries based on principles that promote open, fair and transparent competition. These principles include:
- non-discrimination according to country of origin
- an open, transparent tendering process
- competitive procurement; and
- fair procurement processes
Overview
On October 30, 2016, Canada signed the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). The EU is one of the largest procurement markets globally (valued at around $3.3 trillion annually), which will have significant commercial benefits for Canadian businesses. The CETA will also provide reciprocal access for EU suppliers to Canadian procurement. Procurement provisions are set out in Chapter 19 of CETA and in eight Annexes that form the Market access schedule of Canada. The obligations and format of the CETA are similar to those in the World Trade Organization – Agreement on Government Procurement (WTO-AGP), to which both Canada and the EU have already committed to rules regarding procurement procedures. The thresholds for CETA also remain the same as the WTO-AGP. While CETA builds on the commitments of the WTO-AGP (vis-à-vis predominantly sub-federal procurement activities), the obligations of CETA are expected to have a minimal impact on federal procurement activities. However, as with all free trade agreements, the entire Government Procurement Chapter should be consulted to identify Canada’s obligations and exceptions.
Covered entities
- Covered federal departments and agencies are listed in Annex 19-1: Central Government Entities.
- Crown corporations are covered by Annex 19-3: Other Entities.
Goods, services and construction services
- All goods are covered unless specified in Annex 19-4: Goods.
- Covered services are specified in Annex 19-5: Services.
- Construction services are set out in Annex 19-6: Construction Services.
- Exceptions are listed in Annex 19-7: General Notes.
Thresholds
| Departments and Agencies | Crown Corporations | |
|---|---|---|
| Goods | 221,400 | 604,700 |
| Services, excluding construction | 221,400 | 604,700 |
| Construction | 8,500,000 | 8,500,000 |
Thresholds will be revised every two years commencing on January 1, 2018, and will be published on the Treasury Board’s Trade Agreements: Thresholds Update page.
Procedural obligations
Procedural obligations are found in the text of the Government Procurement Chapter. Procedural rules cover, for example, contract valuation, general exceptions, notices, the content of tender documentation, the circumstances for the use of limited tendering and the publication of award information.
Exceptions
The following sections should be consulted for exceptions which may apply:
- Article 19.2: Scope and Coverage
- Article 19.3: Security and General Exceptions and
- Annexes to the Chapter, including Annex 19-7: General Notes
Summary of changes
While the CETA is similar to the WTO-AGP in terms of coverage and procedural rules, there are a few key differences regarding government procurement, such as:
- expanding procurement obligations to additional Crown Corporations
- the establishment of a free of charge Single-Point of Access (SPA) on which to publish all notices of intended procurement within 5 years of CETA coming into force
- including dredging on the list of covered services
- not allowing Small Business Set-Asides
- including the Canadian Space Agency in the list of covered entities
Dredging
Dredging services are now covered under CETA (Annex 19-6: Construction Services). With the new provisions, dredging equipment and vessels of EU member state make and manufacture will be treated in the same manner as dredging equipment of Canadian make and manufacture, whether in dredging procurements or construction procurements with dredging as a component. Where the estimated value of the procurement is $8,500,000 or more, contracting officers procuring dredging services or construction services which include dredging, must include the following in their solicitation or ITT:
R2710T General Instructions – Construction Services – Bid Security Requirements
In addition, contracting officers must include in the solicitation or ITT, the attached Bid and Acceptance Form Floating Plant (CETA) instead of the Bid and Acceptance Form Floating Plant.
Set asides
CETA does not allow set asides for small and minority owned businesses. However, Annex 19-7: General Notes provides for any set aside or measure as it relates to Aboriginal peoples or businesses. Therefore, procurements that are set aside (i.e. reserved) for either CLCA beneficiaries, or for Aboriginal businesses under the Procurement Strategy for Aboriginal Business (PSAB), are excluded from the Agreement, making the obligations of CETA no longer applicable.
The Canadian Space Agency
Canadian Space Agency (CSA) procurements related to certain types of satellite systems are covered under CETA. For a CSA procurement to be covered, it must not only meet the conditions for coverage that procurements for other federal entities must meet, but it must also relate to satellite communications, earth observation and global navigation satellite systems.
Contact information
For assistance with the application of the trade agreements, contracting officers may contact Natalie Dupont in the Trade Agreement Unit of PWGSC’s Strategic Policy Sector, either by telephone at 819-420-1710, or by email: Natalie.dupont@tpsgc-pwgsc.gc.ca