Contracting Policy Notice 2020-2: Replacement of the North American Free Trade Agreement (NAFTA)
From Treasury Board Secretariat
Date: June 30, 2020
To: Functional Heads, Finance and Administration of all Departments and Agencies
Subject: Replacement of the North American Free Trade Agreement
Summary
This Contracting Policy Notice covers three elements: the replacement of NAFTA, the updated procurement thresholds for free trade agreements, and the collection of country of origin statistics.
- Replacement of the North American Free Trade Agreement
On July 1, 2020, the Canada-United States-Mexico Agreement (CUSMA) came into force, replacing the North American Free Trade Agreement (NAFTA). However, unlike NAFTA, Canada is not a party to the government procurement chapter in CUSMA, which pertains only to Mexico and the United States. Canada will maintain government procurement commitments with the United States through the World Trade Organization Agreement on Government Procurement and with Mexico through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
NAFTA will not apply to any procurements that commence on or after July 1, 2020.
It is advised that departments apply the following instructions with respect to the NAFTA-CUSMA transition:
- If no solicitation documentation relating to the procurement is published before July 1, 2020, NAFTA will not apply to the procurement.
- If solicitation documentation relating to the procurement that will lead to award of an instrument is published before July 1, 2020, NAFTA will continue to apply to the procurement until it is complete.
- If only a Request for Information or information-gathering document is published before July 1, 2020, NAFTA will not apply to the solicitation itself.
- For existing standing offers put in place before July 1, 2020, the standing offer should simply be administered in accordance with its terms.
- For a procurement subject to NAFTA with a process involving a one-time prequalification list (e.g. Invitations to Qualify) where the prequalification documentation was published before July 1, 2020, NAFTA will continue to apply to that procurement until it is complete.
- For existing supply arrangements put in place before July 1, 2020:
- Any qualification process that takes place on or after July 1, 2020 will not be covered by NAFTA; and
- Individual solicitations issued on or after July 1, 2020 will not be subject to NAFTA and there is no requirement to amend the supply arrangement.
The government procurement obligations of the other trade agreements to which the Government of Canada is a party will continue to apply. Entities are strongly advised to review the obligations of these agreements to ensure they account for any changes resulting from the rescission of NAFTA.
- Thresholds for Trade Agreements
As of July 1, 2020, the thresholds for procurements subject to free trade agreements to which the federal government is a party is as follows:
| Free Trade Agreement | Entities (departments and agencies) |
Crown corporations and other government enterprises | ||||
|---|---|---|---|---|---|---|
| Goods | Services | Construction | Goods | Services | Construction | |
Table 1 Notes
|
||||||
| Internal | ||||||
| Canadian Free Trade Agreement(CFTA) | 26,400 |
105,700 |
105,700 |
528,300 |
528,300 |
5,283,200 |
| International | ||||||
| Canada–Chile Free Trade Agreementtable 1 note * | 108,400 |
108,400 |
9,100,000 |
542,400 |
542,400 |
17,300,000 |
| Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) | 238,000 |
238,000 |
9,100,000 |
650,000 |
650,000 |
9,100,000 |
| Canada–Colombia Free Trade Agreementtable 1 note * | 108,400 |
108,400 |
9,100,000 |
542,400 |
542,400 |
17,300,000 |
| Canada-European Union Comprehensive Economic and Trade Agreement (CETA) | 238,000 | 238,000 | 9,100,000 |
Annex 19-3, Section A: 650,000 |
Annex 19-3, Section A: 650,000 |
9,100,000 |
Annex 19-3, Section B: 732,400 |
Annex 19-3, Section B: 732,400 |
|||||
| Canada–Honduras Free Trade Agreement | 108,400 |
108,400 |
9,100,000 |
542,400 |
542,400 |
17,300,000 |
| Canada–Korea Free Trade Agreement | 100,000 |
100,000 |
9,100,000 |
N/A |
N/A |
N/A |
| Canada–Panama Free Trade Agreement | 108,400 |
108,400 |
9,100,000 |
542,400 |
542,400 |
17,300,000 |
| Canada–Peru Free Trade Agreement | 173,900 |
173,900 |
9,100,000 |
542,400 |
542,400 |
17,300,000 |
| Canada–Ukraine Free Trade Agreement table 1 note * | 238,000 |
238,000 |
9,100,000 |
650,000 |
650,000 |
9,100,000 |
| World Trade Organization–Agreement on Government Procurement (WTO-GPA) | 238,000 |
238,000 |
9,100,000 |
650,000 |
650,000 |
9,100,000 |
- Collection of Country of Origin Statistics
Following the replacement of NAFTA, Canada will no longer collect procurement statistics concerning country of origin. For Government of Canada statistical reporting purposes, departments are now to report the country of the vendor’s address under the Country of Vendor data field that will replace the Country of Origin data field in proactive disclosure of contract reports.
References
- The trade agreements to which this Contracting Policy Notice pertains have been hyperlinked in the table above.
- Canada-United States-Mexico Agreement
- Canadian International Trade Tribunal Procurement Inquiry Regulations
- Treasury Board Contracting Policy
Enquiries
- For matters of content regarding the Canada-United States-Mexico Agreement (CUSMA), please contact Global Affairs Canada:
Telephone:
1-800-267-8376 (toll-free in Canada)
613-944-4000 (in the National Capital Region and outside Canada)
If you are deaf or hard of hearing, or you have a speech impediment and use a text telephone, you can access the TTY service from 9 a.m. to 5 p.m. Eastern Time by calling 613-944-9136 (in Canada only).Facsimile: 613-996-9709
Email: enqserv@international.gc.ca
Write to:
Enquiries Service (BCI)
Global Affairs Canada
125 Sussex Drive
Ottawa, ON, Canada K1A 0G2 - For information with respect to the TB Contracting Policy, please contact TBS Public Enquiries.
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