Canada: As Of January 15, 2013, Certain City Of Montreal Contracts Are Subject To The Rules Of The Integrity In Public Contracts Act

Any enterprise that wishes to participate in certain City of Montreal contracts will have to hold an authorization granted by the Autorité des marchés financiers (AMF) in accordance with the Integrity in Public Contracts Act assented to on December 7, 2012, and Order in Council 1226-2012 concerning certain contracts of Ville de Montréal, made on December 19, 2012. This obligation applies to the 25 contracts listed in a schedule to the Order in Council, regardless of their value.

When the Act was adopted, it was anticipated that the requirement to hold an authorization would come into effect on January 15, 2013, and that it would initially apply only to construction and service contracts involving expenditures of $40 million or more for which the award process was under way on or began after that date. This requirement was to be progressively extended to the other contracts subject to the Act. That is still true, but the Quebec government has decided to grant a request by the City of Montreal that certain contracts be made explicitly subject to the Act as of January 15, 2013, regardless of the $40 million threshold.

The government's Order in Council provides that each tenderer must submit to the AMF a preliminary application for authorization with respect to a contract listed in the schedule not later than the deadline for submitting bids. Based on the City of Montreal's ranking of tenderers submitted to the AMF, the AMF will consider the preliminary applications to be completed for each of the two highest-ranked tenderers. If the contract cannot be awarded to either of those tenderers, the other preliminary applications will be considered completed for the subsequent tenderers on the basis of their ranking until the contract can be awarded. Preliminary applications for authorization that are not processed will be returned to the tenderers free of charge.

Applications for authorization and required fees

The Regulation of the Autorité des marchés financiers under an Act respecting contracting by public bodies came into effect on December 19, 2012. The Regulation sets forth the information that must be included in applications for authorization submitted to the AMF.

The application form for an enterprise that wishes to enter into a public contract or subcontract and the forms to be attached as schedules to an application are available on the AMF's website, in the "Public Contracts" section. A Guide for enterprises, explaining their legal and regulatory obligations to ensure compliance with the Act, is also available on the website. For the time being, these documents are only available in French, but the AMF indicates that they will be available in English soon.

On December 19, 2012, the Conseil du Trésor also published the Fee related to an application for authorization filed by an enterprise with the Autorité des marchés financiers for public contracts and subcontracts. The fee for an enterprise applying for an authorization or the renewal of an authorization is $400. There is also a fee of $200 for each person or entity that is audited under the Act. These fees are not refundable.

Please read our recent Legal Update for more information about the Integrity in Public Contracts Act.

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