Budget 2021

The federal budget for 2020-21 and 2021-22 (Budget 2021) was presented to the House of Commons on April 19, 2021. Budget 2021 included funding for programs to reduce barriers to trade and increase participation in federal procurements amongst groups who traditionally face difficulties accessing opportunities at the federal level. Some of these measures are highlighted below.

Removing Barriers to Internal Trade

Budget 2021 allocates $21 million over three years to:

  • Enhance the capacity of the Internal Trade Secretariat (responsible for the Canadian Free Trade Agreement), to accelerate the reduction of trade barriers within Canada.
  • Create a repository of trade data to identify barriers to trade within Canada, including licensing and professional certification requirements.
  • Pursue internal trade objectives through new or renewed discretionary federal transfers to provinces and territories.

Increased Diversity in Procurement

To diversify the federal supplier base by improving procurement opportunities for specific communities, Public Services and Procurement Canada (PSPC) has been provided with $87.4 million over five years. Initiatives include:

  • Implementing a program to increase purchasing from Black-owned businesses.
  • Continuing work towards the target of award of 5% of all contracts to Indigenous-owned businesses.
  • Improving data capture, analytics, and reporting with respect to diversity in procurement.
  • Developing new tools, guidance, awareness, and training to ensure that goods and services procured are accessible, by design, to those with disabilities.

Infrastructure Investments

$1.9 billion will be invested over four years, starting in 2021-22, to recapitalize the National Trade Corridors Fund. The government estimates this funding will attract approximately $2.7 billion from private and other public sector partners, resulting in total investments of $4.6 billion. These investments will go towards roads, rail, and shipping routes, improving the long-term resilience of the Canadian economy and supporting internal trade.

Strengthening Canada's Trade Remedy System

Budget 2021 confirmed the government's intention to launch public consultations on measures to strengthen Canada's trade remedy system and to improve access to trade remedies for workers and small and medium-sized enterprises. This may result in proposed amendments to the Special Import Measures Act and the Canadian International Trade Tribunal Act.

Administration of Trade Controls

$38.2 million will be provided over five years, starting in 2021–22. Starting in 2027, an additional $7.9 million per year will be provided to Global Affairs Canada to support Canada's trade controls regime.

Modernizing Travel and Trade at Canada's Borders

$656.1 million will be provided over five years beginning in 2021-22, and $123.8 million per year starting in 2026-27, to the Canada Border Services Agency (CBSA) to modernize Canada's borders. Funding aims to transform the border experience for travellers through touchless and automated interactions, enhance CBSA's ability to detect contraband, and help protect the integrity of Canada's border infrastructure. Funding will also support three Canadian pre-clearance pilot programs in the United States that will enable customs and immigration inspections to be completed before goods and travellers enter Canada.

Increased Reciprocity in Procurement

The Government also expressed its intention to further pursue reciprocity in procurement with Canada's trading partners, in order to ensure that goods and services are only procured from countries that grant Canadian businesses a similar level of procurement market access.

Single Point of Access for Government Contracting in Canada

As previously reported in our bulletin The Times They Are a Changin' - What We Know (and Still Don't Know) About the New Federal Procurement Processes, Canada committed under CETA to establish an individual electronic single point of access for procurement notices by September 21, 2022. This system is being developed by Public Services and Procurement Canada and, once finalized, will be hosted on the Government of Canada website.

Canada-UK Trade

Negotiations on a New Canada-UK Bilateral Trade Agreement

Following the UK's exit from the European Union, Canada and the UK signed the Canada-UK TCA, which came into force on April 1, 2021, to preserve the preferential market access of Canadian and UK businesses that has been available under the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). As part of the Canada-UK TCA, Canada and the UK agreed to commence negotiations on a new bilateral free trade agreement by April 1, 2022 and to conclude such negotiations by April 1, 2024.

As previously reported in our bulletin Trade Update: Canada-UK Trade Talks Enter New Phase, and in anticipation of formal negotiations commencing with the UK, Global Affairs Canada conducted a consultation from March 12 to April 27, 2021, to solicit input from Canadian stakeholders regarding trade with the UK. Despite the conclusion of these formal consultations, Global Affairs Canada continues to solicit input from Canadians regarding barriers to trade with the UK and potential points of negotiation in respect of a new trade agreement. A summary of the outcome of the formal consultations can be found on the Government of Canada website. Global Affairs Canada has indicated it remains interested in receiving submissions from Canadians and that these submissions can be sent by email to consultations@international.gc.ca. Prior to sending a submission, however, please consult the privacy statement.

Canada-UK Tender Publication and Single Point of Access

As previously reported in our bulletin 2021: New Year, New Trade Agreements and New Procurement Thresholds, the UK agreed to establish its own single point of access for procurement opportunities and has implemented this service, called Find a Tender. This service replaces the Official Journal of the European Union's Tenders Electronic Daily as the UK's single point of access for public procurements. The Find a Tender portal went live on December 31, 2020 and can be accessed on the UK Government website.

Additional Information on the Canada-UK TCA

For additional information on the Canada-UK TCA, please see Fasken's bulletins:

UK Begins Accession Process to CPTPP

On February 1, 2021, the UK submitted notification of its intent to begin the accession process for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a regional free trade agreement between Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. In June 2021, Canada agreed to establish an Accession Working Group to begin negotiations with the UK on its proposed membership. It is expected the UK may join CPTPP as early as 2022.

Ontario-Maryland Strategic Investment and Procurement Agreement

As previously reported in our bulletin 2021: New Year, New Trade Agreements and New Procurement Thresholds, Ontario and the state of Maryland finalized a Strategic Investment and Procurement Agreement on December 17, 2020. The legal text of the agreement has not yet been published.

Trade Agreement Procurement Thresholds for 2022-2023

Updated thresholds for government procurement coverage under Canada's national and international trade agreements are provided in the downloadable PDF document.

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