Canada: New PWGSC Integrity Regime: A Mixed Bag

On July 3, 2015, Public Works and Government Services Canada (PWGSC) introduced a new Integrity Regime which relaxes the integrity requirements applicable to entities doing business with the Government of Canada. This is good news for Corporations seeking to work for the Government of Canada.

Canada’s previous integrity framework was criticized by the business community for its strict ineligibility policy and the extension of its rules to affiliate entities. Potential suppliers to Canada were ineligible to do business with PWGSC for a period of 10 years if they were convicted of certain criminal offences, including extortion, bribery, and corruption and certain offences under the Competition Act.

This strict ineligibility policy created less incentive for companies to self-disclose or put more rigorous compliance mechanisms in place. Suppliers to Canada were well aware that a non-discretionary 10 year debarment would be imposed in the event that any integrity breach was disclosed or discovered.

After significant lobbying efforts, the government has relaxed some of the more onerous consequences. These new provisions have also tried to provide more clarity on how the integrity rules will be enforced.

For example, the new Integrity Regime permits suppliers who have been convicted of integrity-related offences to cut the 10 year ineligibility period in half by demonstrating that they have cooperated with law enforcement authorities, or that they have undertaken remedial action(s) to address the wrongdoing. A potential supplier may apply for this reduced five year ineligibility period at any time. If their request is granted, an administrative agreement will be imposed to monitor their progress and impose certain conditions. These might include various remedial and compliance measures that the supplier must meet in order to continue doing business with Canada, though it is uncertain at this time precisely what these administrative agreements will look like.

In addition to the reduced five year ineligibility period, the new Integrity Regime also permits suppliers to retain independent and qualified third parties to monitor their progress under the terms of their administrative agreements. Third parties may also be used to assess convictions under foreign offences and determine whether a supplier has participated in offences committed by their affiliate organizations. It is unclear at this point what degree of involvement and disclosure will be required in the context of these third party assessments.

The key changes implemented by the new Integrity Regime are as follows:

Applies to entire Federal Government. The Integrity Regime applies to government-wide procurement and real property transactions undertaken by federal departments and agencies. Previously, it had only applied to PWGSC managed contracts and real property transactions.

Potential for reduced debarment period. The debarment period remains 10 years from the date of conviction, however, if the Government finds that the supplier cooperated with legal authorities or assesses that it has addressed the causes of the misconduct that led to their ineligibility, the Government can reduce this to 5 years. Debarment is only retroactive for 3 years, as opposed to the previous 10 year application.

Control over affiliates. Previously, all affiliates of a Canadian company, anywhere in the world convicted in Canada or abroad of a prescribed offence could render the Canadian company ineligible, even if it had no control over the affiliate in question and did not participate in the wrongdoing. The new regime has added the necessary element of control required for a supplier to be deemed ineligible for the actions of an affiliate. Specifically, through a third party assessment, the Government will determine if the supplier participated or was involved in the conduct that led to the affiliate’s conviction. Absent a finding of control or participation, the Canadian supplier will remain eligible.

New offence. The Regime has added a new offence for the payment of a contingency fee to a person to whom the Lobbying Act applies. This is an addition to the pre-existing list of offences or any similar foreign offence that attract liability under the Regime, including: anti-competitive activity under the Competition Act (including conspiracies (section 45), bid rigging (section 47) and false or misleading representation (section 52)), tax evasion, extortion, bribery of judicial officers, bribery of a foreign public official, secret commissions, money laundering, criminal breach of contract, fraudulent manipulation of stock exchange transactions, prohibited insider trading, forgery and other offences resembling forgery, and falsification of books and documents. Leniency applicants under the Competition Act are still subject to the debarment policy but should be able to apply for a reduced period of ineligibility based on their participation in the Competition Bureau’s Leniency Program.

Administrative agreements. The new Integrity Regime allows the Minister to request that certain at-risk (i.e., suspended or previously ineligible) suppliers enter into administrative agreements with the Minister. These agreements may include provisions requiring the implementation or extension of compliance programs, employee training, outside auditing, the disclosure of contractor records and/or other remedial and compliance measures.

Suspension of suppliers. If a supplier has been charged with or admitted guilt to one of the listed or similar foreign offences, the Government is able to suspend them from participating in bids for up to 18 months.  This suspension can be extended if a judicial process is underway; for example, if there is an investigation into the charges laid. In the alternative, the Government may impose an administrative agreement in the interim; this would enable the supplier to avoid suspension.  

Sub-contractors. A supplier cannot sub-contract with an ineligible supplier on a federal government contract. Any supplier who does so knowingly could be ineligible for 5 years. Under the previous integrity framework, a violator would likely incur an automatic 10 year debarment. There is also an exception under the new regime: a supplier who requires the services of an ineligible sub-contractor can seek advance approval from PWGSC.

Permanent ineligibility. A new addition under the regime is permanent ineligibility for a supplier convicted of frauds against the Government under the Criminal Code of Canada or under the Financial Administration Act. {NTD – already said this is new}

Notice and due process. PWGSC will now put into place a mechanism through which it will proactively notify suppliers of their ineligibility/suspension if they are assessed to be ineligible for a contract award. In addition, a supplier can now come forward at any time and ask for an advanced determination of eligibility for itself and its affiliates. There was no due process procedure under the former framework.  

Public list. Under the new regime, PWGSC will now produce a public listing of ineligible and/or suspended suppliers. There are currently no names on the list but this will likely change in the coming weeks or months.

The changes implemented by the new Integrity Regime include some practical benefits for suppliers intending to bid on contracts. The process permitting suppliers to request advanced determination of eligibility provides an opportunity for suppliers to confirm their ability to do business with Canada in advance of any anticipated procurement process or contracting opportunity (and before incurring the costs associated with participating in the a tender process). Advanced determination of eligibility will also allow suppliers to obtain an assessment from Canada as to how the actions of its affiliates might potentially impact its eligibility.

There is also good news for suppliers intending to hire subcontractors, as the responsibility for obtaining advanced eligibility can be flowed down to potential subcontractors who may be used for the purposes of an upcoming contract. This will lessen the burden on suppliers who undertake comprehensive, external due diligence to ensure compliance with integrity provisions.

Notwithstanding theses changes, multinational companies with operations in Canada and around the world must continue to be vigilant about the broad application of the Integrity Regime, as many details regarding its implementation are still to come. For example, guidelines regarding the content, scope and reach of administrative agreements as well as how third party monitors will be appointed and operate are still unavailable. Canada has stated that it made these changes to better align with international best practices. While Canada has introduced discretionary elements regarding ineligibility into the Integrity Regime, a move which was responsive to industry concerns, the new regime continues to take a rules-based approach. This is in contrast to the United States, Great Britain, Germany, Australia and the European Union, each of which use discretionary and criteria-guided policies to determine debarment of suppliers. It remains to be seen whether a one-size-fits-all approach to ineligibility will affect some suppliers more harshly than others. 

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.

Events from this Firm
8 Nov 2016, Seminar, Ottawa, Canada

The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.

22 Nov 2016, Seminar, Ottawa, Canada

From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.

7 Dec 2016, Seminar, Ottawa, Canada

Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.

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
Check to state you have read and
agree to our Terms and Conditions

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.

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 by clicking here .

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.


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.