Regulations Amending the Canadian International Trade Tribunal Procurement Inquiry Regulations: SOR/2019-162

Canada Gazette, Part II, Volume 153, Number 12

Registration

SOR/2019-162 June 3, 2019

CANADIAN INTERNATIONAL TRADE TRIBUNAL ACT

P.C. 2019-596 May 31, 2019

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to paragraphs 40(a) footnote a and (i) footnote b of the Canadian International Trade Tribunal Act footnote c, makes the annexed Regulations Amending the Canadian International Trade Tribunal Procurement Inquiry Regulations.

Regulations Amending the Canadian International Trade Tribunal Procurement Inquiry Regulations

Amendment

1 Section 10 of the Canadian International Trade Tribunal Procurement Inquiry Regulations footnote 1 is renumbered as subsection 10(1) and is amended by adding the following:

(2) The Tribunal shall order the dismissal of a complaint in respect of which a national security exception set out in NAFTA, the Agreement on Government Procurement, the CCFTA, the CPFTA, the CCOFTA, the CPAFTA, the CHFTA, the CKFTA, CETA, the CFTA, CUFTA or the TPP, as applicable, has been properly invoked by the relevant government institution.

(3) The national security exception is properly invoked when an assistant deputy minister, or a person of equivalent rank, who is responsible for awarding the designated contract has signed a letter approving that the national security exception be invoked and the letter is dated prior to the day on which the designated contract is awarded.

Transitional Provision

2 For greater certainty, the Canadian International Trade Tribunal Procurement Inquiry Regulations, as they read immediately before the coming into force of these Regulations, continue to apply to complaints for which a notice has been published before that day pursuant to subsection 7(2) of those Regulations.

Coming into Force

3 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Canada’s trade agreements ensure that companies are treated in an open, transparent and non-discriminatory manner when participating in federal procurements that are subject to the agreements. Among other provisions, the trade agreements provide for the invocation of a national security exception (NSE). The NSE provides that, when conducting a procurement process, Canada may not apply the relevant trade agreement provisions if doing so is considered necessary for the protection of Canada’s essential security interests or if the procurement is indispensable for national security or defence. The NSE typically applies to major defence or technology procurements conducted by Public Services and Procurement Canada on behalf of the Department of National Defence, as well as other procurements for the Royal Canadian Mounted Police, Shared Services Canada and other departments and agencies whose procurements give rise to security concerns.

The trade agreements also require that Canada provide a domestic review mechanism for complaints from businesses involved in federal procurements to which the agreements apply, alleging that a procurement process violates the obligations of the trade agreements. In Canada, this role is fulfilled by the Canadian International Trade Tribunal (CITT), which is mandated to conduct inquiries into whether Government of Canada procurements adhere to the requirements of Canada’s trade agreements. Businesses participating in federal procurements may file a complaint with the CITT concerning any aspect of the procurement process, from the time that the requirements for the procurement are determined until the time the contract is awarded to a bidder.

The Canadian International Trade Tribunal Procurement Inquiry Regulations (the “Regulations”) set out the key elements of the CITT’s procurement inquiry process, including what federal government procurement contracts are subject to CITT review, and what procedural and other requirements must be followed by procuring agencies. Section 10 of the Regulations specifies the conditions under which a procurement complaint may be dismissed. This includes situations where it is determined that the complaint has no valid basis, does not concern a procurement conducted by a government institution covered by Canada’s trade agreements, or fails to satisfy certain procedural criteria (e.g. is not filed in compliance with the Regulations or CITT Rules).

The Regulations do not provide guidance on how to treat complaints involving procurements where the NSE applies. This creates uncertainty for parties involved in federal procurements as to how the invocation of the NSE will be treated in the context of procurement complaints. To increase predictability for parties involved in federal procurements, and to support the successful, efficient and timely completion of procurement processes, clarification is needed concerning the conditions under which complaints involving procurements where the NSE applies will be dismissed.

Objective

The objective of these amendments is to clarify the circumstances under which a complaint concerning federal procurements where the NSE applies will be dismissed.

Description

These amendments clarify the circumstances under which a complaint involving an NSE-related procurement will be dismissed by amending section 10 of the Regulations to include additional factors that would lead to the dismissal of the complaint. The factors reflect the procedures used by the federal government to invoke the NSE during procurement processes, and include

Provided these factors are satisfied, a complaint into an NSE-related procurement will be dismissed. If the NSE invocation does not satisfy these factors, the complaint will not be dismissed and the inquiry will continue. Suppliers will continue to have the right to challenge CITT decisions with respect to NSE-related procurements in the Federal Court of Appeal.

Regulatory development

Consultation

Given that these amendments are clarifying in nature, no consultations were undertaken and they were not prepublished.

Modern treaty obligations and Indigenous engagement and consultation

These amendments do not impact Indigenous peoples’ rights and interests.

Instrument choice

Section 40 of the Canadian International Trade Tribunal Act provides the authority for the Governor in Council to make regulations respecting the matters to be addressed by the CITT during procurement inquiries.

Amending the Regulations is the only available instrument to provide clarity with respect to the conditions under which complaints into NSE-related procurements will be dismissed. The CITT is an arm’s length tribunal mandated to inquire into complaints by potential suppliers concerning procurements by the federal government that are covered under Canada’s trade agreements, subject to the requirements set out in the Regulations. As such, there is no potential to provide clarity with respect to the treatment of NSE-related procurements other than through amendments to the Regulations.

Regulatory analysis

Costs and benefits

Clarification of the conditions under which complaints into federal procurements where the NSE applies will be dismissed supports transparency, efficiency and predictability in federal procurement processes. By incorporating the procedural framework into the Regulations, all parties involved in federal procurements will benefit from greater clarity on how the NSE will be applied to federal procurements and assessed in the context of procurement complaints.

The amendments are clarifying in nature and are not expected to result in incremental costs for the CITT nor for businesses who may participate in the procurement review processes of the CITT.

Small business lens

These amendments do not impose new costs on businesses, including small businesses.

“One-for-One” Rule

The “One-for-One” Rule does not apply to these amendments, since they do not result in any change in administrative burden for Canadian businesses. The requirements for Canadian businesses interested in filing a complaint about a federal procurement with the CITT remain unchanged.

Regulatory cooperation and alignment

These amendments are not related to a work plan or commitment under a formal regulatory cooperation forum.

Strategic environmental assessment

In accordance with The Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that the amendments would not have positive or negative effects on the environment; therefore, a strategic environmental assessment is not required.

Gender-based analysis plus

No gender-based analysis plus (GBA+) impacts have been identified for these amendments.

Implementation, compliance and enforcement, and service standards

These amendments will be applied by the CITT as part of its responsibilities for conducting inquiries into complaints from businesses regarding federal procurements subject to Canada’s trade agreement obligations.

These amendments will not apply retroactively. The amendments will only apply to procurement inquiries initiated by the CITT after the amendments come into force and will not apply to procurement inquiries already initiated by the CITT at the time of the coming into force.

Contact

Brittany McNena
International Trade Policy Division
Department of Finance Canada
Ottawa, Ontario
K1A 0G5
Telephone: 613‑369‑3962