Government Procurement

Government procurement refers to all goods, services and construction services purchased by the government. It can range from office supplies to materials and services used in large infrastructure projects.

Foreign government procurement markets are worth hundreds of billions of dollars annually. Some estimates suggest that government procurement represents between 13% and 20% of a country’s gross domestic product (GDP). As such, they offer significant potential opportunities for Canadian exporters.

Government procurement obligations in international trade agreements ensure that Canadian suppliers of goods and services are treated in an open, transparent and non-discriminatory manner when they sell to governments outside of Canada, and that they have access to dispute settlement mechanisms to ensure that these obligations are respected.

In addition to suppliers, open procurement markets benefit governments and taxpayers by increasing competition, widening the choice of goods and services available and, importantly, ensuring best value for money.

Government procurement in free trade agreements

Canada is working on a number of fronts to improve and secure foreign government procurement market access for Canadian suppliers. Most of Canada’s free trade agreements contain a chapter on government procurement. Canada is also a party to the revised World Trade Organization (WTO) Agreement on Government Procurement (GPA).

Government procurement chapters in free trade agreements contain two main parts:

Several international trade agreements already in force benefit Canadian suppliers:Footnote 1

Three types of Canadian entities can be covered in free trade agreements: federal entities, sub-federal entities (provinces, territories, and, in the case of the Canada-EU CETA, municipalities), and Crown corporations. The monetary thresholds above which contracts by these entities are subject to free trade agreements vary by entity as well as by agreement. In most agreements, Canada and its trading partners express their thresholds in U.S. Dollars or in Special Drawing Rights (SDRs), a form of reserve currency created and maintained by the International Monetary Fund (IMF). The value of these thresholds in Canadian currency is published by the Government of Canada and generally updated every two years to account for inflation and currency fluctuations.

The following table presents the threshold values in Canadian dollars for the period of January 1, 2020 to December 31, 2021:

Government Procurement Thresholds in Free Trade Agreements for 2020-2021

Agreement

(date of entry into force)

Federal government entitiesSub-federal government entitiesGovernment enterprises (Crowns)
GoodsServicesConstructionGoodsServicesConstructionGoodsServicesConstruction

Chile

(Modernized) (February 2019)

$108,400$108,400$9,100,000

-

-

-

$542,400$542,400$17,300,000

Colombia

(August 2011)

$108,400$108,400$9,100,000

-

-

-

$542,400$542,400$17,300,000

CPTPP

(December 2018)

$238,000$238,000$9,100,000$650,000$650,000$9,100,000$650,000$650,000$9,100,000

European Union (CETA)

(Provisional application since September 2017)

$238,000$238,000$9,100,000$366,200$366,200$9,100,000Section A (Crown Corporations)
$650,000$650,000$9,100,000
Section B (Utilities)
$732,400$732,400$9,100,000

Honduras

(October 2014)

$108,400$108,400$9,100,000

-

-

-

$542,400$542,400$17,300,000

Korea

(January 2015)

$100,00$100,000$9,100,000

-

-

-

-

-

-

Panama

(April 2013)

$108,400$108,400$9,100,000

-

-

-

$542,400$542,400$17,300,000

Peru

(August 2009)

$173,900$173,900$9,100,000

-

-

-

$542,400$542,400$17,300,000

Ukraine

(August 2017)

$238,000$238,000$9,100,000

-

-

-

$650,000$650,000$9,100,000

United Kingdom

$238,000$238,000$9,100,000$366,200$366,200$9,100,000Section A (Crown Corporations)
$650,000$650,000$9,100,000
Section B (Utilities)
$732,400$732,400$9,100,000

WTO-GPA(revised)

(April 2014)

$238,000$238,000$9,100,000$650,000$650,000$9,100,000$650,000$650,000$9,100,000

Additional government procurement obligations are currently being negotiated with Mercosur (Argentina, Brazil, Paraguay and Uruguay) and the Pacific Alliance (Chile, Colombia, Mexico and Peru), among others. Click here for a full list of Canada’s ongoing negotiations and exploratory discussions. 

Additional references and external resources

The following links provide further information on government procurement and related topics:

Additional information on existing free trade agreements:

Useful guides:

Government of Canada Websites:

Other:

Contact Us

If you have questions or comments, we would like to hear from you. Please contact Global Affairs Canada at the following address:

Government Procurement, Trade and Environment Division (TPZ) 
Global Affairs Canada
John G. Diefenbaker Building 
111 promenade Sussex Drive 
Ottawa, Ontario, K1A 0G2 
Fax: 613-944-3489
E-mail: tpz@international.gc.ca