Regulations Amending the Government Contracts Regulations: SOR/2023-82

Canada Gazette, Part II, Volume 157, Number 10

Registration
SOR/2023-82 April 28, 2023

FINANCIAL ADMINISTRATION ACT

P.C. 2023-374 April 28, 2023

Her Excellency the Governor General in Council, on the recommendation of the President of the Treasury Board, makes the annexed Regulations Amending the Government Contracts Regulations under subsections 41(1)footnote a and 42(1)footnote b of the Financial Administration Act footnote c.

Regulations Amending the Government Contracts Regulations

Amendments

1 The definition progress payment in section 2 of the Government Contracts Regulations footnote 1 is repealed.

2 Subsection 3(1) of the Regulations is amended by adding the following after paragraph (d):

3 The heading before section 8 and sections 8 and 9 of the Regulations are repealed.

4 Section 16 of the English version of the Regulations is replaced by the following:

16 A contracting authority that has received a negotiable security deposit in respect of a contract shall return that security deposit to the contractor if His Majesty has no claim against the contractor arising out of the contract or relating in any manner to the contract and if the contract has been

5 The English version of the Regulations is amended by replacing “Her Majesty” with “His Majesty” in the following provisions:

6 (1) The schedule to the Regulations is amended by repealing the following:

(2) The schedule to the Regulations is amended by adding the following in alphabetical order:

Coming into Force

7 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

These amendments to the Government Contracts Regulations (the Regulations) address the following issues:

  1. The Regulations required Treasury Board approval of the timing and amounts of advance payments in situations where approval for contract entry was required. Contracts are often amended to correct very minor elements that could not be planned for at the time a department sought Treasury Board approval. For example, if a province changes its sales tax rate, then the amounts of the advance payments would differ from the amounts the Treasury Board previously approved. Similarly, it is often advantageous to the Crown to make an advance payment at a different date than the date previously approved by the Treasury Board in order to obtain a lower overall cost or to address some delay by the contractor. When either the timing or amounts of advance payments change, the department had to seek Treasury Board approval of the new timing and amounts again. This process was time-consuming, administratively burdensome, and provided no public benefit.
  2. The title “Commissioner of the Communications Security Establishment” was replaced with “Intelligence Commissioner” under the National Security Act, 2017 (S.C. 2019, c. 13) which received royal assent on June 21, 2019, and is now in force.
  3. Contracts subject to the bid solicitation requirements under the Regulations include service contracts for expert witness testimony and advice, as well as contracts to implement a settlement agreement, a court order, or a judgment in a class proceeding to which His Majesty is a party. However, soliciting bids for expert witnesses could result in the disclosure of information that could reasonably be expected to be injurious to His Majesty’s legal position or strategy adopted or could adopt in the conduct of a litigation, a potential litigation, or a dispute resolution process. Similarly, soliciting bids may jeopardize potential opportunities for His Majesty to resolve a class proceeding on terms that are acceptable to the other party to a dispute, or to fulfil the terms of a settlement agreement or of a court order or judgment in a class proceeding. The prompt implementation of the terms of a settlement agreement, court order or judgment may also be adversely impacted by a requirement to solicit bids. Such terms typically include provisions for the mutual selection or appointment of a third party whose services are required to implement the terms of the agreement, court order, or judgment.

Objective

The amendments reduce the administrative burden on federal government departments associated with the administration of the Regulations.

Description

The Regulations Amending the Government Contracts Regulations

The Regulations do not remove or limit His Majesty’s obligations to comply with Canada’s domestic and international trade agreements when contracting for the provision of goods or services.

Regulatory development

Consultation

The Regulations Amending the Government Contracts Regulations were prepublished in the Canada Gazette, Part I, on June 18, 2022. No comments were received during the 30-day consultation period.

The amendments have been posted in the Treasury Board of Canada Secretariat’s Forward Regulatory Plan since 2020, with the objective of reducing the administrative burden on departments and streamlining the application of the Regulations. As the amendments do not have a direct impact on Canadians, no consultations were undertaken prior to their prepublication. The Intelligence Commissioner was also advised about the name change in the Schedule prior to the prepublication.

Modern treaty obligations and Indigenous engagement and consultation

The amendments do not impact the Crown’s obligations under modern treaties. They do not impact Indigenous governing bodies or Indigenous organizations contracting for the provision of goods or services, as they do not fall within the definition of “contracting authority” in the Regulations. The amendments that remove the requirement to solicit bids for certain professional service contracts will not have an impact on Indigenous peoples offering such services, as none of the amendments would remove or change any obligation on the Crown to fulfil its legal obligations to Indigenous peoples when contracting for goods or services.

Instrument choice

There was no alternative to using another instrument to reduce the administrative burden associated with the regulatory obligation for Treasury Board approval of advance payments. In addition, there was no alternative to updating the name of the Intelligence Commissioner in the Regulations, or to exempting contracts for expert testimony or advice and contracts to implement settlement agreements or court orders or judgments in class proceedings from the Regulations.

Regulatory analysis

Benefits and costs

The Regulations Amending the Government Contracts Regulations decrease the administrative costs to stakeholders both inside and outside government without increasing the risks associated with contracting. Specifically, removing the requirement for Treasury Board approval of the timing and amounts of advance payments reduces the administrative costs and time associated with seeking Treasury Board approval without increasing the risks since the Treasury Board Directive on Payments will still ensure that advance payments are made only under exceptional circumstances.

The amendment that removes the permissive authority for entering contracts that provide for making advance and progress payments streamlines the Regulations. It does not, however, prevent a contracting authority from entering into a contract that provides for the making of an advance or progress payment.

There is no cost associated with updating the title of the Intelligence Commissioner. The amendment clarifies that the Intelligence Commissioner is exempt from the requirement that contracts for legal services be entered into by or under the authority of the Minister of Justice.

There is no cost associated with the removal of the requirement to solicit bids for contracts for expert testimony or advice, and for contracts to implement settlement agreements or court orders or judgments in class proceedings. The exemption from the obligation to solicit bids for contracts for expert testimony and advice mitigates the risk of disclosing information through the solicitation process, which could be injurious to His Majesty’s legal position in the conduct of a litigation, a potential litigation, or a dispute resolution process.

Similarly, soliciting bids may jeopardize potential opportunities for His Majesty to resolve a class proceeding on terms that are acceptable to the other party to a dispute, or to implement the terms of a settlement agreement, court order or judgment. Such terms typically include provisions for the mutual selection or appointment of a third party whose services are required to implement the terms of the agreement, court order, or judgment. Due to the significant number of standing offers for specialty services that are currently in place, the amendments to the Regulations will likely result in only a very small increase to the number of new non-competitive contracts.

Small business lens

Analysis under the small business lens concluded that the amendments do not impact Canadian small businesses.

One-for-one rule

The one-for-one rule does not apply, as there is no impact on businesses.

Regulatory cooperation and alignment

The Regulations Amending the Government Contracts Regulations are not related to a work plan or commitment under a formal regulatory cooperation forum.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

No gender-based analysis plus (GBA+) impacts were identified.

Implementation, compliance and enforcement, and service standards

The amendments come into force on the day that they are registered.

The existing compliance and enforcement protocols associated with the Regulations remain the same. The Treasury Board Secretariat will publish an internal policy notice announcing changes and provide guidance for impacted departments. The notice will be accessible to the public on the Treasury Board Secretariat website.

Contact

Glenn Richardson
Acquired Services and Assets Sector
Office of the Comptroller General
Treasury Board of Canada Secretariat
James Michael Flaherty Building
90 Elgin Street
Ottawa, Ontario
K1P 5E9
Telephone: 613‑818‑4414
Email: Glenn.Richardson@tbs-sct.gc.ca