Procurements subject to trade agreements

A procurement subject to trade agreements is a government purchase that must follow the procedural rules of one or more domestic or international trade agreements. The Government of Canada also describes this as a procurement that is covered by a trade agreement, or a procurement subject to free trade agreements.

Coverage does not depend on dollar value alone. The Supply Manual sets out four conditions that must all be met, and the buyer must check each one before choosing a procurement strategy.

The four conditions that make a procurement covered

According to CanadaBuys, a procurement is covered by a trade agreement when all of the following are true:

• The estimated value is at or above the applicable monetary threshold.
• The purchasing entity or client is covered by the agreement.
• The goods, services or construction requirement is covered.
• No express exclusion applies, such as the exclusion for shipbuilding.

When these conditions are met, the procurement is subject to the procedural obligations of the relevant agreements, as explained in the CanadaBuys general principles for trade agreements. Buyers are directed to determine trade agreement applicability before they select a procurement strategy.

Agreements that can apply to the same procurement

Several agreements feed into Canadian federal practice. They include the Canadian Free Trade Agreement (CFTA), the World Trade Organization Agreement on Government Procurement (WTO-GPA), the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Canada's bilateral free-trade agreements, including those with Chile, Colombia, Honduras and Ukraine, are also part of the framework, as listed in Treasury Board Contracting Policy Notice 2023-6.

One procurement can be covered by more than one agreement. In that case, the Government of Canada states that all applicable agreements must be complied with at the same time, as described in the PSPC briefing material on purchasing goods and services.

Thresholds in effect for 2026 and 2027

Treasury Board publishes thresholds separately for federal departments and agencies and for Crown corporations and other government enterprises. Contracting Policy Notice 2025-8 gives the thresholds in effect from January 1, 2026, to December 31, 2027. For the CFTA, the federal-department thresholds are $34,700 for goods and $139,000 for services and construction.

Thresholds differ by agreement and by category of purchase, so a procurement can fall below the threshold of one agreement while still reaching another. The notice is the reference for each figure.

Exclusions, national security and Indigenous set-asides

Some procurements fall outside trade-agreement obligations even when value and buyer criteria are met. Shipbuilding is the example CanadaBuys gives of an express exclusion.

Canada's trade agreements also contain national-security exceptions. The CanadaBuys general principles state that Canada may exclude a procurement from some or all obligations where it considers this necessary to protect specified national-security interests.

A procurement set aside under the Procurement Strategy for Indigenous Business (PSIB) is also treated differently. Chapter 9 of the Supply Manual states that a PSIB set-aside is no longer subject to trade-agreement obligations and no longer falls under the jurisdiction of the Canadian International Trade Tribunal.

What it means for a supplier bidding on Canadian public contracts

Check the applicable-agreements statement in each solicitation. A CanadaBuys notice of proposed procurement can state that the procurement is subject to listed trade agreements for federal contracts above the relevant thresholds.

The obligations fall on the buyer's process, while the supplier must meet the stated conditions for eligibility, submission, evaluation and contract performance. Confirm whether more than one agreement is listed, and look for any exclusion, national-security exception or set-aside that changes the usual rules.