Corporate wrongdoing imposes significant economic and social costs on Canadians. The Government of Canada has in place a number of tools to detect, prevent and address this type of misconduct, protecting Canadians and the Canadian economy.

• The Government of Canada spends approximately $20 billion per year on procurement contracts, real property agreements, the management of Crown-owned properties and rental payments on 1,690 lease contracts across Canada.

• The government-wide Integrity Regime is designed to ensure that the government conducts business with ethical suppliers, promotes further efforts to put in place strong compliance frameworks, and holds suppliers accountable for misconduct.

• The United States and the United Kingdom have DPA regimes in place. In 2017, the Minister of Justice of Australia introduced legislation to establish a federal DPA regime.

Related products

• Backgrounder: Remediation agreement regime
• Backgrounder: Enhancing Canada’s Integrity Regime
• What We Heard Report
• Deferred Prosecution Agreement Discussion Paper
• Integrity Regime Discussion Paper

Associated links

• Canada’s Integrity Regime
• Federal Contracting Fraud Tip Line

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BACKGROUNDER

Enhancing Canada’s Integrity Regime

Corporate wrongdoing imposes significant economic and social costs. The Government of Canada has a framework of laws, regulations, policies and programs in place to detect, prevent and address improper, unethical and illegal business practices. One such tool is the government-wide Integrity Regime which seeks to ensure that the government conducts business with ethical suppliers, incents further efforts to put in place strong corporate compliance frameworks, and holds suppliers accountable for their misconduct. 

In the fall of 2017, a public consultation was launched to determine if the Integrity Regime continues to achieve its objectives and is efficient in doing so in an evolving marketplace. During the consultation, over 70 submissions were received and more than 370 Canadians, industry associations, businesses, non-governmental organizations and others participated. On February 22, 2018, the Government released the results of the consultation. 

Within the context of ongoing efforts to modernize procurement processes as outlined in the mandate letter for the Minister of Public Services and Procurement and as set out in Budget 2018, the Government announced upcoming enhancements to the Integrity Regime on March 27, 2018. The changes are expected to strengthen the Integrity Regime by making it more robust, while at the same time introducing greater flexibility and consideration of proportionality in debarment decisions. These changes will also help to ensure that suppliers that do business with the Government of Canada better understand their obligations in protecting the integrity of federal procurement, while at the same time promote behavioural changes within the marketplace with an increased emphasis on corporate compliance and corporate responsibility. 

The key features of the enhanced Regime are: 

More flexibility

Under the enhanced Regime, a supplier may be ineligible for contracts or real property agreements for up to 10 years, depending on a variety of mitigating and aggravating factors (such as the role of the supplier in committing the offence, early self-disclosure and prior behaviour). Greater flexibility will enable the government to better mitigate the risks associated with doing business with unethical suppliers, while encouraging suppliers to self-disclose wrongdoing and cooperate with law enforcement. This ensures that debarment decisions are proportionate, reasonable and consistent with practices in other jurisdictions.

Additional triggers for debarment

To create a more robust Integrity Regime, additional triggers for potential debarment will incorporate both further criminal offences and consideration of conduct as well as criminal convictions that undermine the public procurement system, including:

• the following federal criminal offences:

  • fraud under the Criminal Code; conspiracy or collusion to defraud Her Majesty under the Financial Administration Act; offering or accepting bribes under the Financial Administration Act; corruption-related offences regarding municipal corruption under the Criminal Code; and political financing under the Canada Elections Act;

  • in addition, offences under the Criminal Code related to attempts to commit or being an accessory to an offence listed in the Ineligibility and Suspension Policy, counselling an offence in the Policy that is not committed, and conspiracy to commit a listed offence would also be added (see Annex for list of offences)

• provincial offences that are similar to those listed in the Ineligibility and Suspension Policy under the Lobbying Act, the Income Tax Act, the Excise Tax Act and the Financial Administration Act, as well as provincial securities offences

• foreign civil judgments for misconduct that would have been prosecuted criminally in Canada and is captured under the Integrity Regime

• debarment decisions of provinces, foreign jurisdictions and international organizations

• poor contract performance and violations of the Code of Conduct for Procurement

Broader approach to business ethics

The Government of Canada has committed to modernizing procurement to include practices that support economic policy goals, including social procurement. In addition, Canadians increasingly expect that human and labour rights, environmental sustainability, and the promotion of corporate social responsibility should be recognized as key components of business ethics. As such, a modest expansion of the scope of business ethics within the Integrity Regime will introduce new triggers for possible debarment, including: 

• committing criminal offences related to human trafficking under the Criminal Code and the Immigration and Refugee Protection Act or a similar foreign offence; suppliers would also be required to certify that they have taken reasonable steps to guard against the use of forced labour within their supply chain

• committing offences under Part II (occupational health and safety) or III (standard hours, wages, vacations and holidays) of the Canada Labour Code

• being named to the Environmental Offenders Registry as a result of a conviction in the last three years under specified federal environmental laws for intentionally or recklessly causing an environmental accident, unlawfully disposing of or abandoning a substance and/or where the supplier is a repeat offender within a specified time period 

Addressing organized crime

To build on existing safeguards within the Integrity Regime, the government will, in collaboration with law enforcement, examine alternative measures to further mitigate the risk of conducting business with organized crime. 

Additional work

In cooperation with the Canada Revenue Agency, Public Services and Procurement Canada will examine additional measures to further promote tax compliance of suppliers within the federal procurement system.  

Implementation

The enhanced Integrity Regime will be implemented through a revised Ineligibility and Suspension Policy, to be released first on November 15, 2018, and effective January 1, 2019. This allows time for the Government of Canada to communicate changes to suppliers, implement necessary administrative processes, and ensure that procurement staff are well trained.

Annex: Additional federal offences

• the Criminal Code: sections 83.02, 83.03, 83.04 (financing of terrorism); section 123 (municipal corruption); section 380 (fraud); section 463 (attempts, accessories) related to any of the listed offences; section 464 (counselling offence that is not committed) related to any of the listed offences; section 465 (conspiracy) related to any of the listed offences
• the Financial Administration Act: subsection 80(1)(b) (offences and punishment); section 81 (idem, where bribes offered or accepted)
• under the Canada Elections Act: (specific sections to be determined)
• under the Canada Labour Code Part II (occupational health and safety) and Part III (labour standards)

Federal offences linked to human trafficking:

• Criminal Code: section 279.01 (trafficking in persons); section 279.011 (trafficking of person under 18 years); subsection 279.02(1) (material benefit ‒ trafficking); subsection 279.02(2) (material benefit ‒ trafficking of person under 18 years); subsection 279.03(1) (withholding or destroying documents ‒ trafficking); subsection 279.03(2) (withholding or destroying documents ‒ trafficking of person under 18 years)
• Immigration and Refugee Protection Act: section 118 (trafficking in persons); section 117 (organizing entry into Canada)