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CETA’s impacts on Municipal Procurement

May 18, 2017

The Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (EU) is expected to be implemented in 2017. The primary purpose of CETA is to reduce barriers between Canada and the EU in order to promote increased trade. CETA is the first international agreement in which municipal procurement is covered, meaning that municipalities will be required to provide procurement opportunities valued over certain thresholds to companies located within the EU.

The province has indicated that municipalities that are already in compliance with the World Trade Organization (WTO) Agreement on Government Procurement and domestic trade agreements – including the Agreement on Internal Trade (AIT), the New West Partnership Trade Agreement (NWPTA) and the new Canadian Free Trade Agreement (CFTA) – will also be in compliance with CETA, as long as municipalities do not have deliberate exclusions regarding EU bidders or discriminatory policies or practices that disadvantage EU parties. Municipalities can continue with their existing posting and other government procurement practices as all are based on the same principles (e.g. non-discrimination and transparency). All procurement that fits within the required scope will need to be done in a manner that is directly available by electronic means and at no cost. There will be a five-year transition period to allow municipalities to move over to a fully electronic procurement process.

The existing thresholds for the municipalities are $340,600 CDN for goods and services and $8.5 million CDN for construction projects (thresholds will change at 2-year intervals to adjust for exchange rates). CETA will not apply for measures adopted relating to Aboriginal peoples, activities relating to drinking water, energy, transport, and the postal sector, ship-building and repair, and general categories such as acquisition or rental of land.

Alberta Economic Development and Trade is collaborating with the other western provinces to update the existing guidelines on domestic and international trade agreements so that there is one document with requirements for trade compliance. Service Alberta is working with the federal government to develop the online component for the electronic procurement process. AUMA will provide municipalities with information and updates as it is made available.