Coming into force of the Canada-United States-Mexico Agreement (CUSMA)

Procurement Bulletin Bulletin 2020-02
September 2020

On July 1, 2020, the Canada-United States-Mexico Agreement (CUSMA) came into force replacing the North American Free Trade Agreement (NAFTA). Since Canada is not part of the Government Procurement Chapter of CUSMA, there will be no impact on the federal procurement process regarding this agreement.

More specifically, since NAFTA no longer applies to procurements undertaken on or after July 1, 2020, the procurement obligations of the following international trade agreements will continue to apply:

Effects of the Withdrawal of the NAFTA On Canadian Procurements

Goods Procurements

For goods related procurements, the departmental delegation of authority is below the thresholds of all commercial trade agreements, the process remains unchanged. Please note that the Canadian Free Trade Agreement (CFTA) is the agreement with the lowest threshold for goods ($26,400) and the Canada-Korea Free Trade Agreement for international trade agreements ($100,000).

Services Procurements

Since the Canada-Korea Free Trade Agreement provides the lowest threshold for services of any trade agreement ($100,000) and it incorporates by reference the rights and obligations of the Revised WTO-AGP, procurement officers must apply the WTO-AGP procedural obligations to all covered services procurements valued at or above $100,000.

In accordance with international trade agreements, the minimum solicitation period is 40 calendar days. This period could be reduced by 5 days for each of the following conditions, down to a minimum of 30 calendar days, in order to comply with the Canada-Chili Free Trade Agreement:

  1. The notice of the proposed procurement (NPP) is published by electronic means;
  2. All the tender documentation is made available by electronic means from the date of publication of the NPP;
  3. The procuring entity accepts tenders by electronic means.

Solicitation Posting Periods

Regardless of the minimum solicitation posting periods, bidders must be provided with sufficient time to prepare and submit bids based on the nature and complexity of the procurement and the extent of subcontracting anticipated.

Although there is a distinction between commercial and non-commercial goods and services, the minimum solicitation period for non-commercial goods and services is used for procurements done by ESDC.

The solicitation posting periods may be less for procurements performed by PSPC or SSC, depending on the commodity type and complexity.

Additional Information

Please note that there is no impact for existing Standing Offers which should simply be administered in accordance with their terms. For Supply Arrangements, individual solicitations are no longer subject to NAFTA since July 1, 2020.

Canada will no longer collect procurement statistics concerning country of origin. For Government of Canada statistical reporting purposes, departments must now report the country of the vendor's address under the Country of Vendor data field. Please consult the most recent update of Annexes A and C of the Guidelines on the Proactive Disclosure of Contracts.

The trade agreements thresholds have been revised as per July 1, 2020. For information on the revised thresholds or for more details on the replacement of the NAFTA, please consult the Treasury Board (TB) Contracting Policy Notice 2020-2.

For more information

Questions and comments of a general nature related to the contents of this bulletin can be sent to the Asset Management Policy and Procurement (AMPP) team by email at NC-PURCHASING_PORTAL-PORTAIL_D'ACHATS-GD.

Distribution

  1. Administrative Professionals Network
  2. Requisitioners
  3. Regional Managed Services, CFOB managers
  4. ESDC Procurement Team
  5. Procurement Business Reference Network