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Info-PlusTrade AgreementsCanada has signed a number of national and international agreements to eliminate trade barriers, facilitate the cross-border movement of goods and services, and increase investment opportunities for Canadian business. The AIT and NAFTA agreements deal with all aspects of trade including government procurement. The WTO-AGP only deals with government procurement. This means that for procurements covered by these agreements, PWGSC and other government departments have to follow certain rules. The procurement process must be open, fair and transparent. The agreements emphasize a consistent approach to the procurement process and each contains a principle of non-discrimination to ensure that a supplier can expect to be treated no less fairly than any other supplier. Coverage varies widely from agreement to agreement. The following are the main points for each of the agreements:
The Agreement on Internal Trade (AIT) came into effect on July 1, 1995 and applies to most federal government departments and seven Crown corporations. The AIT applies to all procurement of goods valued at $25,000 and up and the procurement of services and construction valued at $100,000 and up. The following services are not covered:
There are a number of other exceptions to the application of AIT procurement rules. See Chapter 5 of the agreement. In addition, AIT contains general exemptions for culture or cultural industries, Aboriginal culture, national security or financial services. For more information.
NAFTA came into effect January 1, 1994 and applies to most federal government departments and ten Crown corporations. NAFTA applies to the procurement of goods valued at more than $32,400 (Canada/U.S.) and $84,000 (Canada/Mexico), the procurement of services valued at $84,000 or more and to construction contracts worth $10.9 million or more. For Crown corporations, NAFTA applies to the purchases of goods and services valued at $420,000 or more and construction contracts valued at $13.4 million dollars or more.
The Canada-Korea Telecommunications Equipment Agreement (CKTEA) has been terminated at the request of the Korean government. (see TB Policy Notice)
The World Trade Organization Agreement on Government Procurement (WTO-AGP) came into effect January 1, 1996 and applies to most federal government departments. The WTO-AGP is a multilateral agreement which aims to secure greater international competition for government procurement. The agreement applies to procurements of goods and services valued at $245,000 or more, and construction requirements valued at $9.4 million or more.
In addition to some general exceptions like procurements related to national security, products for handicapped persons, philanthropic institutions or prison labour, and measures necessary to protect public morals, order or safety, the following specific commodities are excluded:
Five groups of services contracts are completely excluded from NAFTA and/or WTO-AGP:
For all the agreements, suppliers are eligible to bid on any contract provided that they meet qualification requirements. In general, these qualification requirements include an assessment of the financial, technical and managerial skills of the supplier to ensure that the supplier can fulfil the contract.
All publicly advertised opportunities including those subject to the trade agreements are listed on MERXTM - the electronic tendering service. Each procurement published on MERX contains enough information to allow suppliers to decide if they are interested in the particular procurement. Included in this information is whether or not a particular procurement is covered by one or a combination of the agreements. U.S. opportunities are published in the Commerce Business Daily (CBD) and Mexican opportunities in he Diario Oficial de la Federación. Extracts from the publications appear on the MERX.
NAFTA, AIT, and WTO-AGP have a bid challenge mechanism for suppliers who believe that they have been treated unfairly in accordance with the agreements. For the Federal Government, the Canadian International Trade Tribunal (CITT) is the independent third party for the bid challenge mechanism for contracts covered under the AIT, NAFTA, or WTO-AGP. It is important to note that the bid challenge mechanism is supplier initiated and complaint driven. A supplier must, within 10 days of knowing of a reason to complain, submit a complaint in writing to the CITT. The CITT has the powers of a federal court and normally delivers a decision within 90 days.
For more information about the trade agreements, see their Internet sites: North American Free Trade Agreement WTO Agreement on Government Procurement For general information contact the: |
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