Appendix A: Trade Agreements and Financial Thresholds

Table of Contents

• Agreement on Internal Trade (AIT)
• North American Free Trade Agreement (NAFTA)
• World Trade Organization – Agreement on Government Procurement (WTO – AGP)
• Canada-Chile Free Trade Agreement (CCFTA)
• Canada-Peru Free Trade Agreement (CPFTA)
• Canada-Colombia Free Trade Agreement (CCoFTA)
• Canada-Panama Free Trade Agreement (CPaFTA)
• Canada-Honduras Free Trade Agreement (CHFTA)
• Canada-Korea Free Trade Agreement (CKFTA)
• Canadian Free Trade Agreement (CFTA)
• Canada-Ukraine Free Trade Agreement (CUFTA)
• Comprehensive Economic and Trade Agreement (CETA)
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
• Canada-United Kingdom Trade Continuity Agreement (Canada-UKTCA)
• Table 1 – Financial Thresholds

1. Canada is a Party to each of the following trade agreements and the Canada Revenue Agency (CRA), as a federal government entity, is subject to the provisions of these agreements:

• Agreement on Internal Trade (AIT) (PDF, 1 MB)
  
  The AIT was an inter-governmental agreement signed by Canadian First Ministers that came into force in 1995. Its purpose was to foster improved inter-provincial trade by addressing obstacles to the free movement of persons, goods, services and investments within Canada. In terms of procurement, the AIT was focused on eliminating local price preferences, biased technical specifications, unfair registration requirements and other discriminatory practices in order to ensure equal access to procurement for all interested Canadian suppliers. The CFTA replaced the AIT on July 1, 2017.
• North American Free Trade Agreement (NAFTA)
  
  The NAFTA was an international trade agreement, launched in January 1994, between Canada, the United States and Mexico. The objectives of the agreement were to eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between three countries; promote conditions of fair competition in the free trade area; increase substantially investment opportunities; provide adequate and effective protection and enforcement of intellectual property rights; create effective procedures for the implementation and application of the Agreement, for its joint administration and for the resolution of disputes; and establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of the Agreement.
  
  The Canada-United States-Mexico Agreement (CUSMA) replaced the NAFTA on July 1, 2020. Unlike the NAFTA, the CUSMA does not have a government procurement chapter that applies to Canada. Instead, the government procurement relations between Canada and the U.S. are governed by the WTO-AGP, and the relations between Canada and Mexico by the CPTPP.
• World Trade Organization – Agreement on Government Procurement (WTO – AGP)
  
  The WTO – AGP is a plurilateral trade agreement aimed at increasing international competition for various goods and services. The WTO – AGP is designed to make the laws, regulations, procedures and practices regarding government procurement more transparent and to ensure they do not protect domestic products or suppliers, or discriminate against foreign products or suppliers.
• Canada-Chile Free Trade Agreement (CCFTA)
  
  The CCFTA, which came into force July 5, 1997, was amended in November 2006 to add a chapter on procurement that came into force September 5, 2008. The general principles of the CCFTA are non-discrimination in the treatment of one Party's goods, services and suppliers by the other Party; transparency; and open competition. The CCFTA introduces a new concept of "extended transparency" which makes information available with respect to specific procurement opportunities that are not covered by the trade agreement (see paragraph 4 below).
• Canada-Peru Free Trade Agreement (CPFTA)
  
  The CPFTA came into force on August 1, 2009. The CPFTA gives Canadian and Peruvian suppliers improved market access in the area of government procurement. It guarantees Canadian suppliers the right to bid on a broad range of goods, services and construction contracts carried out by Peru's central government entities. It also ensures that practices remain transparent and fair for suppliers.
• Canada-Colombia Free Trade Agreement (CCoFTA)
  
  The CCoFTA came into force on August 15, 2011. Chapter 14 of the CCoFTA deals with government procurement and gives Canadian and Colombian suppliers improved market access and the right to bid on a broad range of goods, services and construction contracts carried out by the Parties' central government entities. The general principles of the CCoFTA correspond to those of the other trade agreements: non-discrimination in the treatment of one Party's goods, services and suppliers by the other party; open competition; and, practices that are transparent and fair. The CCoFTA includes the concept of "extended transparency" which makes information available with respect to specific procurement opportunities that are not covered by the trade agreement (see paragraph 4 below).
• Canada-Panama Free Trade Agreement (CPaFTA)
  
  The CPaFTA came into force on April 1, 2013. Chapter 16 of the CPaFTA deals with government procurement and gives suppliers improved market access and the right to bid on a broad range of goods, services and construction contracts carried out by the Parties' central government entities. The general principles of the CPaFTA correspond to those of the other trade agreements: non-discrimination in the treatment of one Party's goods, services and suppliers by the other party; open competition; and, practices that are transparent and fair.
• Canada-Honduras Free Trade Agreement (CHFTA)
  
  The CHFTA came into force on October 1, 2014. Chapter 17 of the CHFTA deals with government procurement and gives suppliers improved market access and the right to bid on a broad range of goods, services and construction contracts carried out by the Parties' central government entities. The general principles of the CHFTA correspond to those of the other trade agreements: non-discrimination in the treatment of one Party's goods, services and suppliers by the other party; open competition; and, practices that are transparent and fair.
• Canada-Korea Free Trade Agreement (CKFTA)
  
  The CKFTA came into force on January 1, 2015. Chapter 14 of the CKFTA came into force on January 14, 2018 and it deals with government procurement and gives suppliers improved market access and the right to bid on a broad range of goods, services and construction contracts carried out by the Parties' central government entities. The general principles of the CKFTA correspond to those of the other trade agreements: non-discrimination in the treatment of one Party's goods, services and suppliers by the other party; open competition; and, practices that are transparent and fair. The CKFTA is unique in that it incorporates by reference the text of the WTO-AGP and therefore reflects most of its obligations.
• Canadian Free Trade Agreement (CFTA) (PDF, 3 MB)
  
  The CFTA replaces the 1995 Agreement on Internal Trade (AIT) and is more comprehensive, covering nearly all sectors of the economy. Unlike the previous agreement, the CFTA will be able to keep up with technology and innovation, as the agreement's rules will automatically apply to new, emerging areas of the economy. This agreement introduces a binding process to harmonize or mutually recognize the existing regulations affecting trade, and it also has a framework that enables a common approach to any new regulations impacted by trade. The CFTA will also align domestic trade rules with international trade agreements such as the Canada-E.U. Comprehensive Economic and Trade Agreement.
• Canada-Ukraine Free Trade Agreement (CUFTA)
  
  The CUFTA came into force on August 1, 2017. Chapter 10 of the agreement deals with government procurement. The agreement will support Canadian businesses, deepen trade linkages, and further strengthen Canada's bilateral relationship with Ukraine. It will also enhance cooperation, provide for increased transparency in regulatory matters, and stands to reduce transaction costs for businesses.
  
  CUFTA will provide companies with preferential access to procurement opportunities at the central government level in both countries. Canadian suppliers will have the right to fair, non-discriminatory and predictable treatment when bidding on procurement opportunities tendered by the Ukrainian central government entities, including government departments and agencies as well as several public enterprises such as airports, the postal system and public transportation (rail and subway systems).
• Comprehensive Economic and Trade Agreement (CETA)
  
  CETA is a progressive free trade agreement which covers virtually all sectors and aspects of Canada-European Union trade in order to eliminate or reduce barriers. As Parties to the World Trade Organization Agreement on Government Procurement (GPA), Canada and the European Union (EU) have already committed to rules regarding non-discrimination, impartiality and transparency in their procurement activities. CETA builds upon those commitments by opening up competition to a much wider range of government procurement activities and providing suppliers with guaranteed and secure access to sub-national procurement opportunities. Canada and the EU have maintained the ability to protect human health, the environment, national security and public safety, and excluded certain sectors from CETA government procurement obligations (such as research and development; financial services; public administration; recreational; cultural; sporting; educational; social; and healthcare services). The agreement also sets out a number of country-specific exclusions.
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
  
  

  The CPTPP came into force on December 30, 2018 as a free trade agreement between Canada and 10 other countries in the Asia-Pacific region: Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Additional countries may request to accede to this agreement and go through the process of being accepted as a member. The United Kingdom completed its accession in 2023. Canadian businesses will benefit from updated and expanded market access with existing trading partners, as well as from new government procurement opportunities. Businesses across all sectors will be able to compete equally with domestic suppliers in these markets for government procurement contracts involving covered goods, services and construction services.

• Canada-United Kingdom Trade Continuity Agreement (Canada-UKTCA)
  
  

  The Canada-UKTCA came into force on April 1, 2021. This international trade agreement between Canada and the United Kingdom of Great Britain and Northern Ireland incorporates the government procurement obligations of the CETA by reference, meaning that the government procurement obligations in Canada-UKTCA (including procedural rules and market access, covered entities, commodities and thresholds) are identical to those already established in the CETA.

2. The current financial thresholds for each of the above trade agreements are reflected in the following table:

*Valuation of requirements to be exclusive of all applicable taxes.

**The specified financial thresholds are subject to adjustment every two years.

3. . Refer to the Procurement Planning and Administration Procedures for instructions on how to determine if one or more of the above trade agreements applies to a CRA procurement requirement.

4. Under the CCFTA and CCoFTA, the extended transparency commitments obligate the Parties to provide suppliers with information on those procurements for which they are not eligible to bid but where: (1) an open-tendering process is used and (2) the procurement value exceeds $124,000 CDN (CCFTA and CUFTA) and $150,000 CDN (CCoFTA). See Annex Kbis-01.1-8 (Extended Transparency Commitments) of the CCoFTA and Annex 1401-9 (Extended Transparency Commitments) of the CCoFTA. For the CRA, these extended transparency commitments are met through existing procurement practices.