Material Change in Circumstances

A material change in circumstances is a change that is substantial and continuing, and that would likely have led to a different result if it had been known when the original decision or order was made. It is a threshold test. It decides whether a prior decision, order, ruling or status can be reopened.

The Government of Canada's Department of Justice describes this test in the context of variation applications, citing the Supreme Court of Canada decision in L.M.P. v. L.S. The same wording appears across several Canadian federal regulations and in Canadian International Trade Tribunal material, each time as a gate that must be cleared before a matter is looked at again.

The legal test: substantial, continuing and outcome-changing

The Department of Justice sets out three features of a material change. The change must be substantial. It must be continuing, not a passing event. And it must be the kind of change that would likely have produced a different order had it been known earlier. See the Department of Justice guidance on variation.

The same page separates two routes. A variation application requires a material change. A review is treated more like an initial application, so the threshold does not apply in the same way.

Where the phrase appears in Canadian regulations

Canada's sanctions regulations use the exact phrase to allow a further application only in specified circumstances. Examples include SOR/2010-165, SOR/2014-58 and SOR/2014-60.

The Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism provide that a listed person may not submit another removal application unless there has been a material change in circumstances since the previous application.

Trade remedies and the Canadian International Trade Tribunal

Canadian trade-remedy regulations use the phrase when a scope ruling is reconsidered. A ruling can be revisited when there has been a material change in circumstances since it was made. See SOR/84-927.

The Canadian International Trade Tribunal explains that a period of anti-dumping or countervailing duties may be extended through an expiry review. That can happen where it is in the public interest or where there has been a material change in circumstances. The details are on the Tribunal's anti-dumping injury inquiries page.

How it differs from a contract change

Public Services and Procurement Canada handles changes to contract scope through its own forms. PWGSC-TPSGC 610: Change order is issued when an approved change in work increases or decreases the work. PWGSC-TPSGC 611: Contemplated change notice is issued when a contractor is asked to price a potential change in the scope of work. Both are listed on the PSPC forms page.

These forms manage the scope of work under a contract. They are separate from the legal threshold described above and do not define it.

What it means for a supplier bidding on Canadian public contracts

For suppliers, the phrase is mainly a legal and regulatory threshold. It matters if your business is affected by a trade-remedy ruling, a scope ruling or a sanctions listing, because a later application or reconsideration depends on showing a substantial, continuing change.

• If a scope change arises on a federal contract, expect it to move through a contemplated change notice and a change order.
• If a solicitation or contract uses the phrase itself, rely on that document's own wording for what it requires.
• If you are seeking reconsideration of a ruling, document what has changed and show that it is lasting.