Trade Agreement Threshold

A trade agreement threshold is the monetary value at or above which a government procurement may be subject to one or more applicable trade agreements. In federal Canadian procurement, reaching the threshold is only one part of the test. The buying organization and the commodity must also be covered, and no exclusion can apply. Public Services and Procurement Canada briefing material describes coverage in exactly these terms.

The term is not an acronym, and there is no single threshold figure. The applicable threshold varies by trade agreement, procuring entity and procurement type, meaning goods, services or construction. Canada's international procurement guidance states that monetary thresholds vary according to the entity and the trade agreement. CanadaBuys says that when a procurement's value is equal to or greater than the thresholds in the applicable Treasury Board policy notice, the procurement may be subject to trade agreements.

How the coverage test works

A threshold is a coverage test. It is not a spending authority and it does not approve a contract. Federal guidance says a procurement is generally covered when four conditions are met:

• the estimated value is equal to or greater than the relevant monetary threshold;
• the client department is covered;
• the commodity is covered; and
• no exclusion applies.

The estimated value used in this comparison can include options and applicable taxes, according to the same federal briefing material. A contract that looks modest in its base term can therefore reach a threshold once its option periods are counted.

Agreements that carry thresholds

Thresholds come from the government procurement chapters of international and interprovincial trade agreements. Those used in Canadian federal procurement include:

• the Canadian Free Trade Agreement (CFTA);
• the World Trade Organization Agreement on Government Procurement (WTO-AGP);
• the Canada-European Union Comprehensive Economic and Trade Agreement (CETA);
• the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP); and
• Canada's bilateral free-trade agreements, including those with Chile, Colombia, Honduras, Peru and Ukraine.

Each agreement sets its own thresholds, so one procurement can sit above the threshold for one agreement and below it for another. A CanadaBuys tender notice shows how this appears in practice: it names both the CFTA and the revised WTO-AGP as the trade agreements that apply to the opportunity.

Where the federal thresholds are published

The Treasury Board of Canada Secretariat publishes the federal Contracting Policy Notice on trade agreement thresholds. The tables in these notices separate goods, services and construction. They also separate departments and agencies from Crown corporations and other government enterprises. Contracting Policy Notice 2023-6 is one example of this structure.

The notice is reissued for set periods. The current threshold notice, published in the Government of Canada publications collection, sets thresholds for January 1, 2026, to December 31, 2027. Suppliers should always confirm the notice in force for the period in which a solicitation is issued.

A worked example from CATSA

Federal organizations outside the departmental structure publish their own threshold tables. The Canadian Air Transport Security Authority lists thresholds by procurement category in its trade agreement covered procurements procedure. Its services threshold is SDR 355,000, shown in that procedure as C$653,200. The figure is expressed in Special Drawing Rights, the unit used in the trade agreements, and then converted to Canadian dollars.

What it means for a supplier bidding on Canadian public contracts

Start by identifying which trade agreements and thresholds apply to the solicitation. The tender notice often names the agreements, as the CanadaBuys example above does. The threshold itself does not create a separate supplier registration or certification.

If a procurement is covered, the solicitation documents set out what you must do. Covered solicitations are subject to the procurement rules of the applicable agreements, and they can open access to a broader supplier market. Take your obligations from the solicitation and its incorporated requirements, and respond in accordance with them. For background on how buyers weigh these questions at the planning stage, see the CanadaBuys guidance on trade agreement applicability.