Canada: The Superior Court Confirms The AMF’s Refusal To Grant Authorization To Enter Into A Public Contract

The Integrity in Public Contracts Act1 (the "Integrity Act") sanctioned on December 7, 2012, amended the Act respecting contracting by public bodies2 (the "ACPB") such that firms seeking to enter into a public contract or subcontract for an amount equal to or greater than an amount determined by the Government must first obtain authorization to do so from the Autorité des marchés financiers (the "AMF")3. For the moment, all public contracts and subcontracts for services or construction involving an amount of $10 million or more are subject to the AMF's authorization, as well as certain contracts involving the City of Montreal4

Upon receipt of a request for authorization, the AMF sends the information submitted to an Associate Commissioner for Audits appointed under the Anti-Corruption Act so that he or she may conduct the necessary audit and provide the AMF with an opinion on the request as soon as possible5

On May 15, 2014, Quebec Superior Court Justice Marie-Anne Paquette rendered the very first decision on a motion for judicial review of the legality of an AMF decision refusing to grant a firm authorization to conclude a public contract6

The facts

On January 24, 2013, the applicant 9129-2201 Québec Inc., doing business under the name Les Entreprises Bentech Inc.  ("Bentech") submitted a request for authorization to the AMF. On May 31, 2013 the AMF sent Bentech a Prior Notice of Refusal containing reasons for not issuing an authorization and inviting Bentech to make submissions before a final decision was made7. The Prior Notice also informed Bentech of the negative opinion of the Associate Commissioner for Audits under the Anti-Corruption Act.   

On June 13, 2013 Bentech submitted its initial submissions, which it finalized on July 5, 2013. 

On July 12, 2013, the AMF formally refused to issue the authorization requested by Bentech, on the grounds that it did not meet the high standards of integrity that the public was entitled to expect of it. In particular, Bentech was found to have been acting as a front for company 9075-3856 Québec Inc., doing business as Bentech Construction, which had issued false invoices and, according to three witnesses heard by the Charbonneau Commission, had taken part in a system of collusion for the obtaining of public contracts. 

Bentech challenged the legality of the AMF's decision in a motion for judicial review before the Superior Court of Québec.

The judgment of the Superior Court

The Court first determined that only the evidence submitted by Bentech to the AMF for the purposes of deciding on the request for authorization could be taken into consideration on judicial review (par. 43). Otherwise, the Court noted, it would not be engaging in a judicial review of the AMF's decision, but rather of a new situation that had not been subjected to the AMF's decision-making power (pars. 50-51). The burden had been on Bentech to convince the AMF that it merited authorization, and the Court cannot take into consideration any evidence that Bentech had neglected or not chosen to submit to the AMF (par. 56). Moreover, Bentech could not assume that the Associate Commissioner for Audits would do Bentech's work for it and submit all documents that were relevant to the AMF (pars. 57-58):


[59] Thus, a firm requesting authorization pursuant to the ACPB must not be able to play cat and mouse with the AMF by relying on the panoply of powers of the anti-corruption squad and betting on its extraordinary knowledge-gathering for the AMF. 

The Court next pointed out that the standard of reasonableness applies to the AMF's decision, given the nature of the questions involved (pars. 83 and 88). Basing itself on the parliamentary debates and on the decision of the Court of Appeal in Bruni v. Autorité des marchés financiers8, the Court stated that the AMF has special expertise for defining the meaning of probity and thus for assessing the integrity of firms requesting authorization to conclude public contracts (pars. 74-77 and 81). This special expertise warrants considerable deference on the part of the Court (par. 78). Bentech argued however that the AMF's expertise in this regard warranted a lesser degree of deference, as it was exercising new powers. The Court rejected this argument on the grounds that such an ad hoc variation in the degree of supervision and control would be purely arbitrary and incompatible with the legislative intent (par. 82). 

The Court then concluded that the AMF's decision was reasonable in the circumstances. First of all, it was perfectly reasonable to conclude that Bentech was acting as a front for Construction Bentech (par. 97). It was also reasonable to conclude that Construction Bentech, for which Bentech was acting as a front, did not meet the high standards of integrity that public is entitled to expect (par. 100). Bentech had argued, moreover, that the notion of "a high degree of integrity" is vague and lends itself to abuse of power and the arbitrary exercise of the AMF's discretionary power (par. 102). The Court favoured a broad interpretation of the concept of "a high degree of integrity", which it said cannot be strictly confined to the specific situations described in s. 21.28 of the ACPB (par. 107). The Court added that a restrictive, formalistic and hermetic interpretation of the concept of integrity risked compromising the public-interest goals sought to be attained by the legislation (par. 109): 


[110] The debates that led to the adoption of the provisions at issue indicate moreover that the legislature was concerned to avoid such a pitfall. In order to ensure that its goal would be achieved, the legislature deliberately chose to impose a high standard of integrity and to give the AMF broad discretion for assessing the integrity of the firms involved, in light of certain aspects of the legislation that it did not want to be limitative. 

[111] The application of these provisions and the broad discretionary power given to the AMF may be the source of frustration and disappointment for firms seeking to contract with the State. These contretemps do not however trump the public interest at stake and are not sufficient justification for setting aside the AMF's decisions in this regard where, as in this case, the decision is reasonably justified by the facts and the law. 

Thus, with respect to the participation of Construction Bentech in a false billing scheme, the "abstruse" observations of Bentech were not sufficient to convince the AMF (par. 123). As for the participation of Construction Bentech in systemic collusion, the Court noted that Bentech had not submitted any information or alternate version that would tend to contradict the three witnesses who testified before the Charbonneau Commission (par. 111), whose testimony allowed of the reasonable conclusion that there was a certain degree of collusion (par. 112). The Court pointed out that the presumption of innocence applies only in criminal and penal law, whereas the instant matter was governed by civil law (pars. 135 to 137). Fully aware of this distinction, the legislature considered that the presumption of innocence should not apply in the context of a request for authorization (par. 138). The Court did however acknowledge that testimony before the Charbonneau Commission could be a source of frustration for Bentech (par. 139). That being said, however, Bentech limited itself to maintaining to the AMF that the testimony in question was uncorroborated and inconclusive, despite having had full latitude to make its case during the authorization application process (par. 140.) 


This initial decision on the new provisions of the ACPB pursuant to the coming into force of the Integrity Act deals with fundamental questions surrounding the AMF authorization process, particularly the interpretation to be given to the notion of "a high degree of integrity". It will thus be interesting to see whether this decision will be appealed by Bentech. 

The decision does however establish that a firm must provide the AMF with all relevant information before the AMF makes its decision, as judicial review is in no way an opportunity to buttress the applicant's file. Moreover, if a firm does not succeed in convincing the AMF of its integrity during the processing of its request for authorization, it will have a heavy burden to discharge in order for the Superior Court to intervene, given the reasonableness standard that applies to the AMF's decisions, particularly on credibility issues. 

Finally, it is worth noting that this initial decision has been rendered in a context where the Government is being pressured to broaden the range of contracts subject to AMF authorization9 so as to include all public contracts for more than $100,000, which would result in some 20,000 firms having to seek such authorization10.


1 Bill no. 1 (2012, c. 25)

2 CQLR, c. C-65.1

3 ACPB, s. 21.17

4 The City of Montreal contracts that are subject to AMF authorization are all contracts for construction, reconstruction, demolition, repair or renovation involving roads, watermains or sewers for an amount of $100,000 or more, as well as all directly or indirectly related subcontracts for an amount of $25,000 or more.

5 ACPB, s. 21.30

6 9129-2201 Québec Inc. v. Autorité des marchés financiers, 2014 QCCS 2070

7 Pursuant to s. 21.37 of the ACPB and s. 5 of the Act respecting administrative justice, CQLR, c. J-3

8 2011 QCCA 994, pars. 85, 88-89

9 Pierre-André Normandin, Contrats publics: la Loi sur l'intégrité doit être resserrée, La Presse, May 23, 2014

10 Pierre-André Normandin, Des entreprises retirent leur demande à l'AMF pour éviter un refus, La Presse, May 15, 2014

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions