What does the CPTPP mean for government procurement? 

Summary/overview

• The CPTPP government procurement market will provide significant commercial opportunities for Canadian businesses.
• Canadian businesses will benefit from updated and expanded market access with existing trading partners, as well as from new government procurement opportunities in Australia, Brunei, Malaysia and Vietnam.
• Canadian businesses across all sectors will be able to compete equally with domestic suppliers in these markets for government procurement contracts involving covered goods, services and construction services.

Government procurement explained

Governments are often among the largest buyers of goods and services in any country and offer significant potential opportunities for Canadian suppliers. These goods and services vary greatly, including everything from tables and chairs to materials and services used in large infrastructure projects.

Government procurement commitments are part of modern free trade agreements (FTAs) and complement the commitments made in other chapters, such as those concerning tariffs, services and investments. Government procurement commitments expand the market access gains secured elsewhere in an FTA.

Fair, open and transparent rules that promote competition are essential to ensuring that governments obtain the best value for money when spending taxpayer dollars. These rules help to support the primary objective of providing Canadian businesses—including small and medium-sized enterprises (SMEs)—with increased opportunities to access government procurement activities in foreign markets.

Key CPTPP provisions

In the CPTPP, the Government Procurement Chapter is broken down into two parts:

• Procedural rules establish “how” government procurement is conducted; namely, in a manner that provides for open, fair and transparent conditions of competition
• Market-access schedules for each CPTPP country identify the government procurement opportunities for which the rules apply

The chapter is based on the following core obligations:

• national treatment: governments must treat goods, services and suppliers of the other signature Parties no less favourably than domestic goods, services and suppliers
• transparency: rules and procedures are clear
• impartiality: all participants in a procurement process are treated equally
• accountability: suppliers may challenge an alleged breach of the rules through domestic review procedures

Government procurement in the CPTPP

• The CPTPP expands Canada’s government procurement commitments with its existing free trade partners—including new sub-central procurement commitments with Chile and Peru—and WTO Agreement on Government Procurement partners.
• The CPTPP also provides Canadian suppliers with secure access to new government procurement opportunities in Australia, Brunei, Malaysia and Vietnam. Canadian businesses will now be on a level playing field with suppliers from other countries that already have government procurement commitments with these parties.
• With the CPTPP, Malaysia and Vietnam have taken on government procurement commitments for the first time. Canadian suppliers will benefit from this as both countries must carry out their procurement in a manner that is consistent with the CPTPP’s robust procedural rules.
• Any current or future domestic policy that CPTPP members adopt must be implemented in a manner that is consistent with their obligations under the CPTPP (i.e. treating goods, services and suppliers from other CPTPP countries no less favourably than domestic goods, services and suppliers).
• All Canadian provinces and territories took sub-central commitments on government procurement in the CPTPP that are comparable to their coverage in the WTO Agreement on Government Procurement. Commitments at the sub-central level are limited to the procurement activities conducted by provincial/territorial departments and agencies.
• Procurement conducted by Canadian municipalities is not covered under the CPTPP.

Procurement thresholds

Procurement of goods, services and construction services that fall below certain thresholds is excluded from the obligations of the chapter.

• The thresholds for central (federal) government entities will be $237,700 for goods and services (or 130,000 special drawing rights [SDRs]) and $9.1 million (or 5 million SDRs) for construction services.
• The thresholds for sub-central government entities, including federal crown corporations, will be $649,100 for goods and services (or 355,000 SDRs) and $9.1 million (or 5 million SDRs) for constructions services.
• These thresholds expressed in SDRs are converted in Canadian dollars every two years to account for currency fluctuation.

* For additional information on Canada’s government procurement market access commitments under the CPTPP, please see Annex 15-A – Schedule of Canada.