Canadian Free Trade Agreement (CFTA)

The Canadian Free Trade Agreement (CFTA) is Canada's domestic trade agreement with the provinces and territories. It is an intergovernmental agreement among the federal, provincial and territorial governments. It governs, among other matters, government procurement and the reduction of trade barriers within Canada.

The CFTA took effect on July 1, 2017, replacing the Agreement on Internal Trade (AIT). In federal procurement policy it is one of the trade agreements used to decide whether a given procurement carries trade-agreement obligations. The CanadaBuys list of trade agreements records the agreement and its place in the federal framework.

How the CFTA replaced the Agreement on Internal Trade

The CFTA replaced the AIT on July 1, 2017. The AIT did not disappear overnight. It continues to apply only to procurements that began before July 1, 2017, and only until those procurements are completed. Any solicitation started on or after that date falls under the CFTA, not the AIT.

The same CanadaBuys page sets out this transition. Suppliers who still see AIT references in older contract files are looking at procurements that predate the changeover.

Federal CFTA dollar thresholds for 2026 and 2027

The Treasury Board Secretariat publishes CFTA thresholds for federal procurement. For January 1, 2026 to December 31, 2027, the thresholds for departments and agencies are $34,700 for goods, $139,000 for services and $139,000 for construction, according to Treasury Board policy notice 2025-8.

For federal Crown corporations and other government enterprises, the thresholds for the same period are $694,700 for goods, $694,700 for services and $6,943,900 for construction, as listed in the same policy notice. The higher figures for Crown corporations mean far fewer of their purchases reach the CFTA.

How buyers decide whether the CFTA applies

Applicability is a buyer decision. CanadaBuys guidance on trade-agreement applicability directs buyers to consider five things:

• the value of the procurement
• the requesting entity
• the type of requirement
• any exclusions or exceptions
• any special programs

Value is estimated in Canadian dollars and includes options and applicable taxes. The guidance also states that all services are covered by the CFTA unless otherwise specified.

In short, a procurement is subject to a trade agreement when its estimated value meets the applicable threshold, the entity and the commodity are covered, and no exclusion applies. The Public Services and Procurement Canada briefing material describes this test.

The CFTA in federal contract records

The CFTA appears in disclosed federal contract data. Contract records on Open Government contract search include an "Applicable Trade Agreements" field. One disclosed contract record lists the CFTA alongside the procurement method "Competitive – Open Bidding." Reviewing this field across past awards shows which kinds of contracts were run under CFTA rules.

What the CFTA means for a supplier bidding on public contracts

When a solicitation is subject to the CFTA, you respond under the trade-agreement rules and requirements stated in that solicitation. Read the tender notice and the solicitation documents to see which trade agreements the buyer has identified.

The buyer, not the supplier, makes the applicability determination, using value, entity, requirement type, exclusions or exceptions and special programs. Services work is covered unless the buyer specifies otherwise. For goods, the federal department threshold is much lower than the Crown corporation threshold, so the same purchase can fall under the CFTA at one buyer and outside it at another. Check the buyer type and the estimated value before you plan your bid effort.