Canada: Quebec Public Contracts: AMF Authorization Required For Contracts And Subcontracts Worth $5 Million Or More As Of October 24

As of October 24, 2014, enterprises wishing to be awarded public contracts and subcontracts worth $5 million or more will have to hold an authorization from the Autorité des marchés financiers (AMF). This requirement applies to construction, service and public-private partnership contracts and subcontracts. Ministers Martin Coiteux, Pierre Moreau and Robert Poëti made the announcement in a press release on September 16, 2014.

This measure stems from the Integrity in Public Contracts Act passed by the Quebec National Assembly in December 2012. The Act, commonly known as "Bill 1," created a system designed to ascertain the integrity of enterprises prior to their being able to tender for or enter into public contracts. Initially, authorization was only required for construction and service contracts involving an expenditure of $40 million or more. The threshold was lowered to $10 million in December 2013 and will be reduced to $5 million as of October 24, 2014.

Certain contracts of the City of Montreal

Since Bill 1 was passed, the Quebec Government has issued several orders-in-council extending the legislation to certain contracts of the City of Montreal. In particular, an order-in-council that came into force on October 23, 2013, covers all contracts for the construction, reconstruction, demolition, repair or renovation of the City of Montreal's roads, waterworks and sewer services that involve expenditures of $100,000 or more and for which the award process was underway on or began after October 23, as well as subcontracts of the same nature that are directly or indirectly related to such contracts and that involve an expenditure of $25,000 or more. Eight other orders-in-council have been made that extend the AMF authorization process to the City of Montreal, regardless of the value of the contracts.

As of September 24, 2014, new categories of City of Montreal contracts with a value of more than $100,000 will also be subject to the requirement to hold an AMF authorization. This order-in-council will apply to contracts for the supply of asphalt. Up to now, only construction and service contracts and subcontracts have been subject to the requirement.  Bringing certain supply contracts within its scope is in keeping with the government's wish to extend the requirement to all public contracts subject to Bill 1, including contracts for the purchase or leasing of movable property.

Registration in the register of enterprises ineligible for public contracts (RENA)

We remind our readers that if the AMF rejects an enterprise's application for an authorization, the enterprise will automatically be listed in the register of enterprises ineligible for public contracts (RENA). The enterprise will then have to stop working on public contracts already underway and will not be eligible for any new public contracts for a fixed period.

Online application

Since November 18, 2013, Quebec enterprises wishing to apply for an authorization from the AMF have been required to do so online.

For more information about the Integrity in Public Contracts Act, please consult our previous Legal Update.

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