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Bulletin

Alberta Eliminates CFTA Exceptions to Increase Competition

Fasken
Reading Time 3 minute read
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Procurement Bulletin

The  Canadian Free Trade Agreement (CFTA) replaced the Agreement on Internal Trade (AIT) in 2017. Its overarching objectives are to modernize the Canada-wide framework for trade that began under the AIT, expand the coverage to almost all areas of economic activity and to better align with Canada's internal trade agreement with its international trade agreement commitments. Read more on the overview of the procurement chapter of the CFTA.

One of the significant commitments made under CFTA by the federal, provincial and territorial governments was to level the playing field for potential government suppliers. Each signatory is subject to the CFTA rules for open, fair, transparent and non-discriminatory procurement opportunities for goods and services (including construction services) that meet the CFTA value thresholds. Any exceptions to these competitive procurement rules must be specifically identified by each party  in a schedule of "exceptions" appended to the CFTA. 

On July 10, 2019, Alberta Premier Jason Kenney announced that Alberta will unilaterally cede 13 of its 27 original exceptions to the CFTA. These 13 exceptions constitute all 12 of Alberta's exceptions to the CFTA procurement rules and one exception related to regional economic development. Although Alberta will need to take the necessary steps under the CFTA to formally remove these exceptions from CFTA, the premier has directed his government that, effective immediately, the exceptions are no longer to be invoked.

Alberta's Exceptions to the CFTA Procurement Rules

Alberta has 27 exceptions under the CFTA. Twelve of its exceptions are found in Alberta's Schedule of Procurement Exceptions. Another six exceptions are found in Alberta's Schedule of Exceptions to Existing Measures. Finally, the last nine exceptions are found in Alberta's Schedule of Exceptions for Future Measures.

Exceptions removed

The 13 exceptions that will be unilaterally eliminated by Alberta, and thus will no longer be excluded from the application of the CFTA, are the following:

  1. procurement by the Legislative Assembly, the Legislative Assembly Office and the Legislative Offices;
  2. procurement by Alberta Innovates;
  3. procurement by the Alberta Energy Regulator;
  4. procurement by the Alberta Electric System Operator;
  5. procurement by the Alberta Utilities Commission;
  6. procurement of goods purchased for representational or promotional purposes, and services and construction purchased for representational or promotional purposes outside of Alberta;
  7. procurement of local food under the Supporting Alberta's Local Food Sector Act;
  8. procurement of waste water treatment facilities;
  9. procurement for the production, transmission and distribution of renewable energy, other than hydro-electricity;
  10. the right to accord a preference in infrastructure procurements to bids that provide benefits to Alberta;
  11. procurement under exceptional circumstances for regional economic development purposes;
  12. notice of intention to create a Crown corporation which would be responsible for all infrastructure procurement by the provincial government and which would be subject to the Crown corporation procurement thresholds;  and,
  13. the right to adopt or maintain any measure that is part of a framework of regional economic development.

NWPTA Impact

Alberta's removal of its CFTA exceptions will also impact the New West Partnership Trade Agreement (NWPTA). The NWPTA provides for additional trade enhancements between British Columbia, Alberta, Saskatchewan, and Manitoba. These trade enhancements are intended to further liberalize trade, investment and labour mobility between the 4 provinces. Alberta's elimination of its exceptions under the CFTA will also apply to any similar exceptions it has under the NWPTA.

Further Changes Pending...

In its announcement of the elimination of various CFTA exceptions, the Premier's office noted that:

eliminating procurement exceptions from internal trade agreements means more competition for contracts, which in turn will save Alberta taxpayers money. It will also ensure that Alberta companies are not shut out of larger markets across Canada.[1]

In addition to removing these 13 exceptions, the provincial government has also announced that it is launching a fast-track review of its remaining exceptions in order to determine whether they should also be removed.

 

A special thanks to Véronique Champoux for her contributions to this bulletin.



 

[1] Alberta, Office of the Premier, "CORRECTION*: Alberta takes bold step to increase free trade in Canada", (Alberta 10 July, 2019).

 

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