Thales DIS Canada Inc. (“Thales DIS”), a world leading supplier of card security technology and one of the largest defence contractors in the world, was a bidder in a procurement for the manufacturing, printing and production of various government-issued photo identification cards conducted by the Ontario Ministry of Transportation (“MTO”). In addition to the MTO, other ministry clients under this procurement have included the Ministry of Health, Ministry of Government and Consumer Services, and Ministry of Finance – Ontario Digital Services (collectively, the “Ministries”).
Thales DIS wished to source goods from its world-class facility in the European Union to fulfill part of the goods and services required by the procurement. The procuring entities – the Ministries – just prior to the deadline for submissions, introduced fundamental and significant changes to the requirements of the procurement, which prohibited Thales DIS to source the goods from the European Union. Thales DIS commenced an application for judicial review in the Ontario Divisional Court claiming that the decision was discriminatory and in that, contrary to the Comprehensive Economic and Trade Agreement (“CETA”) and the Canadian Free Trade Agreement ("CFTA"). The Ministries are obliged to abide by the provisions of the CETA and the CFTA as a matter of Canadian law. Despite being made aware that the procurement was in violation of the trade agreements prior to the closure of the bid process on December 1, 2021, the Ministries decided to proceed with the discriminatory procurement and refused to extend the deadline for bid submissions.
In parallel, pursuant to the dispute resolution provisions of the CETA and the CFTA, Thales DIS filed a complaint with Supply Chain of Ontario with respect to the decision.
While Supply Chain Ontario found that Thales DIS’s complaint was unsubstantiated, the Ontario Divisional Court found in favour of Thales, quashed the decision of Supply Chain Ontario, and further quashed the procurement decision of the Ontario government for being unreasonable and in contravention of CETA. This is a precedent setting and significant decision as it raises the responsibility and compliance required of provincial authorities with international trade obligations in the context of procurement.
Fasken represents Thales with a team led by Peter Mantas and including Alexandra Logvin, Marcia Mills, Nabila Abdul Malik, Gabrielle Cyr and Novera Khan.