Canada-United States-Mexico Agreement (CUSMA) Replaces NAFTA
As of July 1, 2020, the Canada-United States-Mexico Agreement (CUSMA) is now in force, and replaces the North American Free Trade Agreement (NAFTA). For any procurement that commences on or after July 1, 2020, NAFTA no longer applies.
Under CUSMA, Canada is not a party to the government procurement chapter in CUSMA, which pertains only to Mexico and the United States. Canada will maintain government procurement commitments with the United States through the World Trade Organization Agreement on Government Procurement (WTO-GPA) and with Mexico through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
With the implementation of CUSMA, the Government of Canada’s threshold that determines whether goods and services may be directed to pre-qualified suppliers changes to follow that of the Canada-Korea Free Trade Agreement (CKFTA). The current CKFTA threshold is $100,000, inclusive of taxes.
Thresholds are updated every two years based on the exchange rate between the Canadian and Korean currencies. Updates to threshold values for all trade agreements are posted on the Treasury Board Policy Notice and TB Circulars – Contracting web page.
The CKFTA threshold affects the Government of Canada’s procurement of professional services. It delimits the separation between the ProServices Supply Arrangement and the TBIPS and TSPS Task-Based Supply Arrangements. Any contracts valued at the current CKFTA threshold for the procurement of services or below should be run under the ProServices Supply Arrangement (or a Standing Offer) while any contracts above that value should be run under the TBIPS SA or TSPS Task-Based SA. Contracts of any value could also be run under the Solutions-Based Informatics Professional Services (SBIPS) SA or the TSPS Solutions-Based SA.
In addition to which supply arrangement is used, the anticipated contract value in relation to the threshold also affects how many bidders need to be invited on an opportunity, whether or not the Crown can limit invitations to Canadian Suppliers only, and the length of time bidders have to respond to an opportunity.
More details on the NAFTA to CUSMA transition, and updated thresholds for goods, services and construction, for all trade agreements, can be found in Treasury Board’s Contracting Policy Notice 2020-2.
