Regulations Amending the Canadian International Trade Tribunal Procurement Inquiry Regulations: SOR/2025-140

Canada Gazette, Part II, Volume 159, Number 14

Registration
SOR/2025-140 June 13, 2025

CANADIAN INTERNATIONAL TRADE TRIBUNAL ACT

P.C. 2025-509 June 13, 2025

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, makes the annexed Regulations Amending the Canadian International Trade Tribunal Procurement Inquiry Regulations under section 40footnote a of the Canadian International Trade Tribunal Act footnote b.

Regulations Amending the Canadian International Trade Tribunal Procurement Inquiry Regulations

Amendments

1 The heading before section 2 of the French version of the Canadian International Trade Tribunal Procurement Inquiry Regulations footnote 1 is replaced by the following:

Définitions et interprétation

2 (1) The definition CETA in section 2 of the Regulations is replaced by the following:

CETA
means the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States, done at Brussels on October 30, 2016; (AÉCG)

(2) Section 2 of the Regulations is amended by adding the following in alphabetical order:

CUKTCA
means the Agreement on Trade Continuity between Canada and the United Kingdom of Great Britain and Northern Ireland, done at Ottawa, on December 9, 2020; (ACCCRU)
trade agreement
means any of the following:
  • (a) the CFTA;
  • (b) the Agreement on Government Procurement;
  • (c) the CCFTA;
  • (d) the CPFTA;
  • (e) the CCOFTA;
  • (f) the CPAFTA;
  • (g) the CHFTA;
  • (h) the CKFTA;
  • (i) CETA;
  • (j) CUFTA;
  • (k) the TPP; and
  • (l) the CUKTCA; (accord commercial)

3 The Regulations are amended by adding the following after section 2:

2.1 For the purposes of the Act, procurement process means the process that begins after a government institution has decided on its requirement and ends immediately after a designated contract is awarded. For greater certainty, it does not include the administration of an awarded designated contract, such as any actions taken or not taken by a government institution if it discovers after awarding the designated contract that the winning bid contained incorrect or incomplete information.

2.2 (1) For the purposes of these Regulations, a bidder or prospective bidder is from Canada if it is a Canadian supplier within the meaning of Chapter Five of the CFTA.

(2) For the purposes of these Regulations,

(3) For the purposes of these Regulations, the following are the provisions in respect of procurement of a trade agreement:

2.3 (1) Trade agreements, other than the CFTA, are to be interpreted in accordance with Section 3 of Part III of the Vienna Convention on the Law of Treaties done at Vienna, May 23, 1969.

(2) The CFTA is to be interpreted in accordance with Article 1207 of that Agreement.

4 (1) Subsection 3(1) of the Regulations is replaced by the following:

3 (1) For the purposes of the definition designated contract in section 30.1 of the Act, any contract or class of contract concerning a procurement of goods or services or any combination of goods or services, as described in Article II of the Agreement on Government Procurement, in Article Kbis-01 of Chapter Kbis of the CCFTA, in Article 1401 of Chapter Fourteen of the CPFTA, in Article 1401 of Chapter Fourteen of the CCOFTA, in Article 16.02 of Chapter Sixteen of the CPAFTA, in Article 17.2 of Chapter Seventeen of the CHFTA, in Article 14.3 of Chapter Fourteen of the CKFTA, in Article 19.2 of Chapter Nineteen of CETA, in Article II of the Agreement on Government Procurement as incorporated by reference in CUFTA, in Article 504 of Chapter Five of the CFTA, in Article 15.2 of Chapter Fifteen of the TPP or in Article 19.2 of Chapter Nineteen of CETA as incorporated by reference in the CUKTCA and modified by the Articles and Annexes of the CUKTCA, that has been or is proposed to be awarded by a government institution, is a designated contract.

(2) Paragraphs 3(2)(a) and (b) of the Regulations are replaced by the following:

5 The Regulations are amended by adding the following after section 4:

Determination of Standing as Potential Supplier

4.1 (1) For the purposes of sections 30.1 to 30.19 of the Act, a bidder or prospective bidder on a designated contract is a potential supplier only if it is from Canada or from a country or customs territory listed in the schedule that is a party to a trade agreement that applies in respect of the designated contract.

(2) For the purposes of those sections, a supplier or subcontractor to a bidder or prospective bidder on a designated contract is not a potential supplier unless the supplier or subcontractor is also a bidder or prospective bidder on the contract.

6 Paragraph 5(a) of the Regulations is replaced by the following:

7 Paragraph 6(3)(b) of the Regulations is replaced by the following:

8 (1) The portion of subsection 7(1) of the Regulations before paragraph (a) is replaced by the following:

7 (1) The Tribunal shall, within five working days after the day on which a complaint is filed, determine whether the information provided by the complainant, and any other information examined by the Tribunal in respect of the complaint, discloses a reasonable indication that the following conditions are met:

(2) Subsection 7(1) of the Regulations is amended by striking out "and" at the end of paragraph (b) and by replacing paragraph (c) with the following:

9 (1) The portion of subsection 10(1) of the Regulations before paragraph (c) is replaced by the following:

10 (1) The Tribunal shall dismiss a complaint if,

(2) Subsection 10(2) of the Regulations is replaced by the following:

(2) The Tribunal shall order the dismissal of a complaint in respect of which a national security exception set out in the applicable trade agreement has been properly invoked by the relevant government institution.

10 Section 11 of the Regulations is replaced by the following:

11 If the Tribunal conducts an inquiry into a complaint, it shall determine whether the procurement process was conducted in accordance with the provisions in respect of procurement set out in whichever trade agreement applies.

11 The Regulations are amended by adding the following before section 12:

11.1 (1) The Tribunal is not permitted to award the costs incurred by a complainant in preparing their response to a solicitation unless the response was compliant. The award shall not exceed 2% of the complainant’s bid price.

(2) If the Tribunal awards the costs incurred by the complainant in preparing their response to a solicitation, it is not permitted to also recommend that the complainant’s bid be re-evaluated, that a designated contract be awarded to the complainant or that the complainant be compensated.

(3) The Tribunal shall limit any recommendation of compensation under subsection 30.15(2) of the Act to one of the following:

(4) For the purposes of this section, the bid price for a designated contract does not include the value of any options or extensions of the designated contract.

11.2 If the Tribunal recommends that the designated contract be awarded to the complainant and that contract has already been awarded to another person, it shall also recommend, in the alternative, that the government institution pay compensation to the complainant.

11.3 (1) In the absence of exceptional circumstances, the Tribunal shall award costs of and incidental to the proceedings to

(2) If the complaint is valid in part, the Tribunal may exercise its discretion to divide the costs of and incidental to the proceedings among the parties.

(3) For the purposes of subsection (1), exceptional circumstances include those in which

12 The Regulations are amended by adding, after section 13, the schedule set out in the schedule to these Regulations.

Coming into Force

13 These Regulations come into force on the day on which they are registered.

SCHEDULE

(Section 12)

SCHEDULE

(Paragraph 2.2(2)(b) and subsection 4.1(1))

Countries and Custom Territories, Other than Canada, That Are Parties to Trade Agreements

PART 1
Agreement on Government Procurement

PART 2
CCFTA

PART 3
CPFTA

PART 4
CCOFTA

PART 5
CPAFTA

PART 6
CHFTA

PART 7
CKFTA

PART 8
CETA

PART 9
CUFTA

PART 10
TPP

PART 11
CUKTCA

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The 2024 Fall Economic Statement announced that Canada will restrict access to federal procurement opportunities to what is required under the procurement obligations in Canada’s trade agreements.

Amendments to the Canadian International Trade Tribunal Procurement Inquiry Regulations (the Regulations) are needed to clarify how the Canadian International Trade Tribunal (CITT) is to interpret and apply Canada’s procurement trade obligations as they relate to reciprocity. This includes providing additional clarity as to how the CITT will determine standing, as well as to add greater specificity to the conditions for inquiry at the CITT.

Background

Canada currently operates an “open-by-default” procurement system which means that Canada offers more access to federal procurement opportunities than what is required under its procurement obligations in free trade agreements and the World Trade Organization (WTO) Agreement on Government Procurement. To ensure a level playing field for Canadian workers and businesses, the 2024 Fall Economic Statement announced the implementation of reciprocal procurement policies for federal procurements starting in spring 2025. Work is underway by Public Services and Procurement Canada and the Treasury Board Secretariat to implement these policies through administrative changes to the federal government’s contracting practices.

Under reciprocal procurement policies, Canada will strictly enforce its procurement trade obligations to limit access to the federal non-defence procurement market to Canadians and trading partners who provide reciprocal access to Canada via trade agreements. Under this approach, and subject to certain exceptions, countries with which Canada has no procurement trade obligations will lose access to the federal procurement market, while countries with which Canada has a trade agreement will receive access to the federal procurement market only as provided for in the respective trade agreement.

Canada’s trade agreements require that Canada provide a domestic review mechanism for complaints from suppliers of a trade agreement country who allege that a procurement process violates the obligations of an applicable trade agreement. At the federal level, this role is fulfilled by the CITT, which is mandated to determine if a complaint is accepted for inquiry, and if so, to conduct inquiries into whether government procurements adhere to the procurement obligations. The Regulations set out the key elements of the CITT’s procurement inquiry process, including what types of federal government procurement contracts are subject to CITT review, who can file a complaint, and what trade agreement obligations the CITT can inquire into.

Objective

The objective of the Regulations Amending the Canadian International Trade Tribunal Procurement Inquiry Regulations (the amendments) is to provide clear guidance to the CITT in the application and interpretation of trade agreement obligations that relate to reciprocal procurement policies, in line with the intent of Canada’s trade agreements.

Description

Amendments to the Regulations will support the CITT’s implementation of Canada’s procurement trade obligations by introducing provisions related to the determination of standing. The amendments will make clear which businesses have standing to bring a complaint before the CITT. The amendments will also clarify that a “potential supplier,” who can bring a complaint to the CITT, is limited to Canadian businesses or businesses of a trade agreement country with procurement trade obligations. The amendments will include other clarifications to provide interpretive principles for and support implementation of these changes, such as updating the conditions for inquiry, and limiting the potential remedies that may be granted by the CITT to businesses with valid complaints.

Regulatory development

Consultation

Reciprocal procurement policies were subject to public and targeted consultations conducted by the Department of Finance Canada and Global Affairs Canada in 2021 and 2023 with the public, industry, provinces and territories.

Consultation submissions were broadly supportive of restricting Canada’s federal procurement market according to its trade obligations. These consultations solicited views on certain cases where exemptions may be provided, such as when there are no Canadian or trade agreement country suppliers. The consultation also included questions on how a determination of origin is made, with consideration given to both a system based on the location of the supplier and on the origin of the good.

The amendments reflect the feedback received from consultations with respect to the above-mentioned elements of trade agreements. Overall, the amendments reflect the negotiated intent of the agreements, which were consulted during the course of each individual trade agreement negotiation. As the amendments will provide guidance to the CITT in the application and interpretation of existing trade agreement obligations, and will not result in changes to Canadian businesses’ access to the CITT, additional consultations were not necessary.

Modern treaty obligations and Indigenous engagement and consultation

Following the completion of the assessment of modern treaty implications, no adverse impacts on potential or established Indigenous or treaty rights, which are recognized and affirmed in section 35 of the Constitution Act, 1982, were identified in the Regulations.

Instrument choice

Section 40 of the Canadian International Trade Tribunal Act provides the authority for the Governor in Council to make regulations respecting the matters to be addressed by the CITT during procurement inquiries and to determine whether a bidder or prospective bidder has standing to bring a complaint.

The CITT is an arm’s length tribunal mandated to inquire into complaints concerning procurements by the federal government that are covered under Canada’s trade agreements, subject to the requirements set out in the Regulations. To clarify the CITT procurement process with respect to strictly enforcing Canada’s procurement trade obligations, there is no alternative than regulatory amendments.

Regulatory analysis

Benefits and costs

The main benefits of the amendments will be in ensuring that only suppliers from trade agreement countries with procurement trade obligations have access to the CITT. Additionally, as the amendments clarify the businesses that have standing under the CITT, they are not expected to have any anticipated costs. They do not require any additional funding to administer.

Small business lens

Analysis under the small business lens determined that the measure would not impose administrative or compliance requirements on Canadian small businesses.

One-for-one rule

The one-for-one rule does not apply, as there is no incremental change in administrative burden on businesses.

Regulatory cooperation and alignment

The amendments will only impact the CITT, which is a federal arms-length quasi-judicial body, by clarifying how it interprets and applies Canada’s procurement trade obligations. Therefore, the amendments will not have any direct impact on other governments and do not need to be aligned with the regulatory practices of other jurisdictions.

International obligations

The amendments are aligned with Canada’s international obligations, including Canada’s procurement trade obligations through trade agreements and the WTO Agreement on Government Procurement.

Effects on the environment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment (SEEA Directive), a preliminary scan concluded that a strategic environmental and economic assessment is not required.

Gender-based analysis plus

No gender-based analysis plus (GBA+) impacts have been identified for the amendments.

Implementation, compliance and enforcement, and service standards

The amendments come into force on the day on which they are registered.

The amendments will be applied by the CITT as part of its responsibilities for conducting inquiries into complaints from businesses regarding federal procurements.

The amendments will not apply retroactively. They will only apply to procurement inquiries initiated by the CITT after the amendments come into force and will not apply to procurement inquiries already initiated by the CITT at the time of coming into force.

Contact

Mackenzie Bonnett
International Trade Policy Division
Department of Finance Canada
Ottawa, Ontario
Email: mackenzie.bonnett@fin.gc.ca