On February 16, 2010 the Agreement Between the Government of Canada and The Government of the United States of America on Government Procurement (the Agreement) came into force. The Agreement will allow Canadian companies greater access to procurement by individual States and the U.S. Federal government. It will also provide them a waiver from the "Buy American" provision of the American Recovery and Reinvestment Act of 2009 (ARRA) for procurements over minimum thresholds.
The Agreement amends both U.S. and Canadian commitments under the World Trade Organization's Agreement on Government Procurement (GPA). Previously, the U.S. specifically excluded Canadian companies from benefiting under the U.S. GPA commitments for procurement by U.S. States. The amendments to the U.S. GPA commitment remove this exclusion. Canadian companies will be allowed to supply goods and services procured by certain agencies and bodies in 37 states including New York, California, Illinois, Florida, Arizona, Massachusetts, Michigan, Pennsylvania and Texas, provided the procurements are in excess of 355,000 SDR (approximately US$543,647) for supplies and services and 5 million SDR (approximately US$7,655,000) for construction. The extension of U.S. GPA commitments to Canadian companies also provides them a waiver under the "Buy American" provisions of the ARRA. Of the 37 states 11, including Florida, Illinois, Michigan, New York, and Pennsylvania, do not grant access to Canadian companies on construction-grade steel (including requirements on subcontracts), motor vehicles and coal. Further, the Agreement does not provide Canadian companies with access to Federal funds for mass transit and highway projects.
The Agreement also provides Canadian companies temporary access to procurement under seven U.S. Federal programs.1 These include Water and Waste Disposal Programs under the U.S. Department of Agriculture and Rural Utility Services, State Energy Programs under the Department of Energy (Office of Energy Efficiency and Renewable Energy) and the Public Housing Capital Fund under the US Department of Housing and Urban Development. Until September 30, 2011 these programs must not impose the "Buy American" provision of the ARRA with respect to Canadian iron, steel, or manufactured goods where the procurement contract surpasses the minimum threshold of 400,000 SDR (approximately US$612,560) for goods and services and 5 million SDRs (approximately US$7,655,000) for construction.2
In exchange for the U.S. commitments, Canada's provinces and territories (excluding Nunavut) will provide American companies access to procurement by most departments and many bodies and agencies where the value exceeds the same values applicable to U.S. procurement changes. Notable listed exceptions include highway and rail construction in Ontario, construction grade steel in Quebec and preferences and restrictions on highway projects in all provinces and territories. The Agreement also gives American companies access to procurement until September 30, 2011 by some provincial crown corporations for construction contracts valued over C$8,500,000.
A copy of the Agreement including a list of subject provincial and territorial departments, agencies and organizations is available here.
A copy of the American state bodies and entities covered by the agreement is available here.
Footnotes
1The Agreement, Art. 7.
2 1994 GPA, US Appendix I, Annex 3, Note 3.
Ronald Cheng practises administrative law and related litigation with a concentration on international trade.
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