Trade Agreements

In Canadian public procurement, trade agreements are international agreements that establish rules for government purchasing. They determine which public procurements are open to suppliers from the countries that are party to the agreement. Governments, contracting authorities and suppliers all use the term when deciding who may compete for a given requirement.

These agreements generally contain procedural rules, such as non-discrimination, impartiality and transparency, along with market-access schedules. The schedules identify the covered entities, goods, services, construction services and monetary thresholds. Coverage depends on the procuring entity, the procurement value, the goods or services involved, and any exclusions or exceptions in the relevant agreement, as Global Affairs Canada explains.

Procedural rules and market-access schedules

Canada's trade agreements generally contain two principal procurement components. The first is a set of procedural rules intended to support non-discrimination, impartiality and transparency in covered procurements. The second is a set of market-access schedules that define what the agreement actually covers.

Only procurements that involve covered entities, exceed the applicable monetary thresholds, and concern covered goods, services or construction services are subject to the international trade-agreement provisions. A purchase that falls outside any of these limits is not governed by the agreement, even if the agreement itself is in force.

The agreements that apply to Canadian procurement

Canada is a party to the WTO Agreement on Government Procurement (GPA), and most of its free-trade agreements contain a government-procurement chapter. The agreements relevant to suppliers include:

• the WTO Agreement on Government Procurement (GPA);
• the Canadian Free Trade Agreement (CFTA);
• the Comprehensive Economic and Trade Agreement (CETA);
• the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP); and
• bilateral free-trade agreements with countries including Chile, Colombia, Honduras, Korea, Panama, Peru and Ukraine.

Global Affairs Canada publishes summaries of the procurement provisions in agreements such as the CPTPP and the Canada-United States-Mexico Agreement.

How trade agreements shape federal tendering

At the federal level, departments and agencies use trade agreements to decide whether a procurement must be competed internationally, which suppliers may participate, what procedural obligations apply, and whether the opportunity must be publicly advertised. The Treasury Board Secretariat states that notices of intended procurement for procurements subject to federal free-trade agreements must be published through the Government Electronic Tendering Service, which is now accessed through CanadaBuys.

A solicitation normally names the applicable agreements in the tender notice or solicitation document. For example, a Public Services and Procurement Canada request for proposal issued for the Department of National Defence states that the requirement is subject to listed agreements, including the CFTA, GPA, CETA, CPTPP and bilateral agreements.

Reciprocal procurement and the review of complaints

Canada's reciprocal-procurement policy affects who can bid. Suppliers from countries that have no applicable procurement trade obligations with Canada may be excluded from federal procurement opportunities. Suppliers from countries with a trade agreement covering government procurement keep access only to the extent that the agreement provides, as set out in the Treasury Board policy document.

A CanadaBuys notice on the interim reciprocal procurement policy explains the supplier-facing effect. Suppliers from trading-partner countries are eligible when the procurement is subject to the trade agreement between Canada and the country of the supplier's place of business.

The Canadian International Trade Tribunal offers a review mechanism for complaints about designated contracts and compliance with covered trade agreements, including the CFTA. Its page on legislation and trade agreements describes the scope of that process.

What trade agreements mean for a supplier bidding on Canadian public contracts

Read the tender notice first and note which trade agreements are listed and which thresholds apply. Then confirm that your company, its place of business, the goods or services you are offering and the procurement itself fall within the relevant coverage. Finally, meet every submission, certification and other bid requirement in the solicitation, and check whether the reciprocal-procurement policy limits your eligibility.