Canada: Canadian Integrity Regime Amendments: Serious Implications For Certification And Reporting Obligations For Federal Government Contracts

On April 4, 2016, the Canadian federal government amended its Integrity Regime, which governs the qualification of suppliers to enter into contracts with Public Works and Government Services Canada (PWGSC) and a number of other federal departments and agencies. The amendments are intended to address feedback from stakeholders following extensive revisions to the Integrity Regime last year. (See our discussion of the July 2015 revisions to the Integrity Regime.)


The April 2016 amendments contain greater detail and clarify certain aspects of the Integrity Regime, including the following:

  • Scope of Application. The amendments expand the types of contracts that are exempt from the Integrity Regime, including goods, services and construction contracts, subcontracts and real property agreements with a transaction value below $10,000.
  • Subcontractors. The amendments narrow certain suppliers' obligations to "first-tier subcontractors" – that is, subcontractors with whom a supplier has a direct contractual relationship – and set out processes whereby suppliers may contract with ineligible or suspended first-tier subcontractors in limited circumstances.
  • Anti-avoidance Provisions. The amendments also introduce anti-avoidance provisions to prevent entities from circumventing ineligibility through certain types of corporate reorganizations, divestitures or other types of transactions.


Perhaps most significantly, however, suppliers to the Canadian government should be aware of certain new aspects of the certification and reporting obligations, and the corresponding penalties for failing to satisfy such obligations.


Generally, the Integrity Regime requires each bidder and supplier to certify that none of the domestic criminal offences and other circumstances described in the PWGSC's Ineligibility and Suspension Policy (the Policy) that will or may result in a determination of ineligibility or suspension, apply to it, its affiliates and its proposed first-tier subcontractors. Given that being charged with a relevant offence, not just conviction, may result in ineligibility, the certification appears to extend to charges that are being contested by a bidder or supplier.

The importance of providing accurate certifications has been enhanced by the April 2016 amendments, which state that if, in the opinion of PWGSC, a supplier has provided a false or misleading certification or declaration to PWGSC in relation to the Policy, the supplier is automatically ineligible for 10 years, with no possibility of reduction of this period.

This automatic penalty raises concern because some aspects of the Policy may make it difficult for companies to ensure strict accuracy of their certifications. For example, the Policy's broad and open-ended definition of "affiliate" may create uncertainty and risk of false certification insofar as it includes entities under common control "in fact" and incorporates an undefined concept of "deemed control". The April 2016 amendments attempt to offer some clarification by providing that indicia of control are not limited to common ownership, but include common management, identity of interests (such as found in the members of the same family), shared facilities and equipment, or common use of employees. As a result, consideration may have to be given to whether a joint venture partner may be considered an affiliate for the purposes of the Policy, even when it is clearly not considered an affiliate in corporate law. Although some of the new additions to the definition of affiliate are similar to the definition in the U.S. Federal Acquisition Regulations, unlike the Canadian regime, consequences for affiliate conduct under the U.S. regulations appear to be discretionary rather than automatic.

The Policy also does not address the extent to which a supplier will or will not be held accountable where it relies on representations by an affiliate or by a first-tier subcontractor that the affiliate or subcontractor has not been convicted of or charged with a relevant domestic offence. (Note that entering into a subcontract with an ineligible first-tier subcontractor is, under the April 2016 amendments, itself grounds for an automatic five-year period of ineligibility, with no possible reduction of this period.)

The April 2016 amendments further require that each bidder and supplier submit and certify as part of its bid "a complete list of all foreign criminal charges and convictions pertaining to itself, its affiliates and its proposed first-tier subcontractors that, to the best of its knowledge and belief, may be similar to one of the listed offences in the Policy". Compiling a complete list of such charges and convictions may be challenging, given not only the broad definition of affiliate, discussed above, but also the potential uncertainty with respect to foreign offences that qualify as "similar" to the listed Canadian offences. However, unlike the certificate for domestic offences, the certification with respect to foreign offences is expressly qualified as to the certifier's best "knowledge and belief". (The Policy does not indicate the extent to which PWGSC expects bidders and suppliers to investigate affiliates and subcontractors to provide this foreign offence certification.)

In any event, suppliers to the Canadian government would be well advised to ensure that internal reporting mechanisms track foreign offences that may be similar to the Canadian offences listed in the Policy, including some that can cover conduct beyond collusion, corruption or bribery, such as the misleading advertising offence under the Competition Act.

Ongoing Reporting

The April 2016 amendments also add a continuing reporting requirement that each successful bidder and supplier must inform PWGSC within 10 business days of "any charge, conviction, or other circumstance relevant to the Policy with respect to itself, its affiliates and its first-tier subcontractors". The short time to comply, coupled with the expansive scope of this obligation, may be onerous, particularly for large multinational companies with numerous foreign affiliates.

Suppliers will also need to be cognizant of reporting obligations in other jurisdictions, including relevant international bodies such as the World Bank, to the extent that supply contracts fall within the jurisdiction of those bodies.


The April 2016 amendments clarify some aspects of the Policy. At the same time, the amendments have introduced some inflexible rules and consequences for breaches of the certification requirement with respect to the conduct of affiliates and first-tier subcontractors. While it remains to be seen how PWGSC will apply these aspects of the Policy in practice, the Policy's lack of flexibility and its broad reach risk leading to outcomes that go beyond the need to ensure that the government conducts business with ethical suppliers. This would leave fewer qualified bidders for government contracts, and potentially result in less competitive prices and other terms for government contracts. The risk of firms inadvertently falling offside the Policy has clearly increased as a result of these latest amendments.

Read the full text of the Policy incorporating the April 2016 amendments.

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.

Mark C. Katz
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.