Continuing with our review of trade agreements, this blog looks at Canada's existing international trade agreements.

Canada has entered into a range of free trade agreements with various countries. The most significant of these is the North American Free Trade Agreement (NAFTA), which covers Canada's largest trading partner the USA, as well as Mexico.

North American Free Trade Agreement

Chapter ten of NAFTA deals with procurement. NAFTA does not apply directly to the provinces, although the federal government may be in breach if a province acts contrary to the agreement.

NAFTA contains a number of exceptions, including measures:

  • to protect essential security interests
  • to protect public morals, order or safety
  • to protect human, animal or plant life or health
  • to protect intellectual property
  • relating to goods and services of handicapped persons, philanthropic institutions and prison labour

There is also a list of specific items that are not covered by the rules on procurement. Challenges to the federal government under NAFTA must be brought to the CITT (see previous blogs).

Canada-US Agreement on Government Procurement

In addition to NAFTA, Canada and the USA entered into a separate agreement on procurement following the introduction of "Buy American" measures in the US. The impact of CUSAP is to open provincial procurements to US suppliers. There were temporary provisions that expired in 2011, but there are also long term provisions allowing access for goods and services for procurements over roughly $548,000 and for construction over roughly $7,700,000 (the amounts are based on a moving exchange rate).

Each province has agreed to CUSAP, but the range of government bodies covered varies from province to province. There is also a range of items that are excluded altogether and the usual exemptions for security requirements.

Other International Trade Agreements

Canada has entered into a number of other trade agreements, some of which have provisions specifically governing procurement. In each case, the agreements only bind the federal government and not the provinces. Each agreement is slightly different in terms of the goods and services covered, thresholds and so on. Relevant agreements include the Canada-Panama Free Trade Agreement, the Canada-Peru Free Trade Agreement and the Canada-Chile Free Trade Agreement.

The final blog in this series will consider the implications of the upcoming Comprehensive Economic and Trade Agreement between Canada and the European Union.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.