My name is Ana Renart. I'm the director general of the market access bureau in the trade policy and negotiations branch of Global Affairs Canada. I am joined today by Pierre Marier, who is the director of the government procurement, trade, and environment division of Global Affairs Canada.
The trade policy and negotiations branch is responsible for negotiating international trade agreements both in a multilateral context, such as at the World Trade Organization, the WTO, and in a bilateral or regional context, such as NAFTA or the Canada-European Union Comprehensive Economic and Trade Agreement, the CETA. We do this with the help of experts in other government departments.
As part of Canada's international trade agreements, we seek to secure new market access opportunities for Canadian businesses in a broad range of areas, one of which is government procurement.
As mentioned, we work very closely with other departments when negotiating trade agreements. With regard to GP—government procurement—we work closely with our colleagues at Public Services and Procurement Canada, for example, as well as the Treasury Board Secretariat.
Today, I will provide an overview of Canada's government procurement commitments in its international trade agreements highlighting in particular those obligations of relevance to small and minority-owned businesses.
Canada is a founding party to the WTO agreement on government procurement, the GPA, which first entered into force in 1981 and was revised several times since. The most recent revision took effect in 2014. Today, the GPA includes 47 WTO members, including major economies such as the United States, the European Union, Japan and Korea. The rules set forth in the GPA serve as the basis of Canada's government procurement obligations in regional and bilateral free trade agreements.
Most of Canada's regional and bilateral trade agreements include commitments on government procurement. Such commitments are included in Canada's agreements with the United States and Mexico, Chile, Peru, Colombia, Panama, Honduras, Korea, Ukraine and the European Union.
The primary objective of negotiating free trade agreements, including government procurement commitments, is to provide Canadian businesses, including small and medium-sized enterprises, with increased opportunities, including access to government procurement in foreign markets.
Canada's approach to government procurement in trade agreements is based on four key principles: non-discrimination, transparency, impartiality, and accountability. These principles are reflected in the procedural rules in all of Canada's international trade agreements with government procurement obligations.
Provisions on non-discrimination ensure that the treatment granted by a procuring entity towards foreign suppliers is no less favourable than the treatment granted towards domestic suppliers. Transparency provisions require the publication of certain laws, regulations, and policies, as well as information on contracting notices, tender documentation, and award notices. Impartiality-related requirements stipulate that all participants in the procurement process must be treated fairly, and accountability provisions ensure that participants have access to bid challenge mechanisms in the event of a dispute.
The opportunities created by government procurement commitments in FTAs are significant. Under the WTO's Agreement on Government Procurement, for example, Canadian suppliers have preferential access to procurement activities worth an estimated $2.2 trillion annually. Under CETA, Canada has secured access to over $450 billion worth of procurement activities. Under Canada's agreements with the U.S., Canada has preferential access to an estimated $1.1 trillion worth of procurement activity. In other words, FTAs with GP commitments, general procurement commitments, allow Canadian companies the ability to compete for many more opportunities than just those available in Canada, and they allow this in a fair and predictable way.
While seeking increased market access for Canadian suppliers into foreign government procurement markets, these trade agreements are also subject to a number of exceptions that provide flexibility for Canada to carry out certain domestic policies or achieve socio-economic objectives. For example, Canada is not prevented from undertaking procurement policies that it considers necessary for the protection of its essential security interests, even if these would otherwise contravene the trade agreements. Also, Canada's international procurement obligations do not prevent Canada from applying specifications related to the good or service being procured that promote the conservation of natural resources or the protection of the environment, or socio-economic development opportunities for socially or economically disadvantaged people, so long as this is not done in a discriminatory fashion or as a disguised restriction on international trade.
In addition, certain sectors are excluded from Canada's international government procurement obligations, including health and other public services, research and development, shipbuilding, and culture. Furthermore, essentially all of Canada's international trade agreements include provisions that allow procurements to be set aside, as described by my friend Matthew, for small and minority-owned businesses.
Without exception, all of Canada's international trade agreements with procurement obligations include provisions that would allow domestic procurements to be set aside for aboriginal businesses. These provisions allow Canada the flexibility to carry out the procurement strategy for aboriginal business, which was launched in 1996 and aims to foster aboriginal business development through the use of federal procurement contracts, while remaining consistent with international trade obligations.
With respect to exceptions that are specific to SMEs, only the Canada-EU CETA does not include an exception for set-asides for Canadian SMEs. However, at over $200,000, the CETA thresholds for goods and services are the highest that Canada has in any of its international trade agreements.
Contracts that fall below this threshold are not subject to CETA procurement obligations, so procuring entities have full flexibility to carry out procurements in a manner that helps to achieve domestic policy objectives, including facilitating SME participation in procurement, should they desire.
In the context of current trade negotiations, Canada is pursuing progressive provisions that recognize the importance of international trade's contribution to broader economic, social and environmental policy priorities. This includes progressive provisions in the area of government procurement.
Thank you for your time, and we would be happy to answer any questions you may have regarding Canada's government procurement obligations in its international free trade agreements.