Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Canada's "Canadian Products Promotion Act" is a Private Members Bill to Watch

A Canadian Bloc Québécois Member of Parliament tabled in Canada’s House of Commons  Bill C-306 “an Act respecting the use of government contracts to promote economic development (the “Canadian Products Promotion Act”) (also could be called “Buy Canada Act”) as a private members bill on February 10, 2009.

 

A private members bill is a motion or bill (proposed law) that is sponsored and introduced by a backbencher or a Member of Parliament of a party that is not the majority.  Most bills are introduced by Ministers who hold are in the governing party and hold a Cabinet-level position.  Only a small number of private members bills are enacted.  However, when the governing party holds a minority government, there is the potential for more private members bills to be passed by the majority in opposition.  Canada currently is governed by a minority Conservative government.

 

The purpose of Bill C-306 is to promote economic development in Canada by ensuring that, in the procurement of its goods and services, the Government of Canada gives preference to Canadian products while complying with its international obligations.  Section 3 provides that “[w]hen the Government of Canada procures a product, it shall, where similar products at similar prices are available (a) give preference to a Canadian product over a partially Canadian product or a non-Canadian product; and (b) give preference to a partially Canadian product over a non-Canadian product.  Further, Section 4 provides that “[w]here the Government of Canada considers it advisable, it shall give absolute preference to Canadian products by (a) giving them exclusive access to a government contract; or (b) giving them a price preference …”.

 

 

In addition, Bill C-306 requires that the price of a Canadian product not exceed by more than 7.5% the price of a non-Canadian similar product.

 

 

Bill C-306 is clear on Canada’s commitments to its international obligations. Section 12 provides that “[a]s regards NAFTA countries, this Act does not apply to contracts in respect of which the North American Free Trade Agreement requires that Canada accord to the suppliers of another NAFTA country treatment no less favourable than that which it accords to its own suppliers.”  Section 13 provides that “[a]s regards countries that are parties to the Agreement on Government Procurement of the World Trade Organization and with which Canada has negotiated mutually acceptable commitments, this Act does not apply to contracts subject to that Agreement in respect of which Canada has made specific commitments.” Section 13 is limited by section 14, which provides that “Section 13 does not apply in respect of a country that is a party to the Agreement referred to in that section if the acquisition is for a service in respect of which the country has not accorded Canada reciprocal access.”

 

 

Interestingly, Bill C-306 gives the Governor-in-Council (i.e., the Cabinet) powers to pass regulations that may result in NAFTA and/or WTO disagreements.  Section 15 of Bill C-306 provides:

 

 

“The Governor in Council may make any orders and regulations that are necessary for carrying out the provisions of this Act, and, without restricting the generality of the foregoing, orders and regulations

 

(a)    for ensuring reciprocity between Canada and any other NAFTA country by expanding the benefits accorded to the enterprises of that NAFTA country if that country provides Canadian suppliers with greater access to its government contracts than the access required by the North American Free Trade Agreement;

 

(b)    for suspending certain benefits accorded to the enterprises of any NAFTA country in accordance with the provisions of Chapter Twenty of the North American Free Trade Agreement;

 

(c)     for ensuring reciprocity between Canada and any country that is a party to the Agreement on Government Procurement of the World Trade Organization by expanding the benefits accorded to the enterprises of that country if that country provides Canadian suppliers with greater access to its government contracts than the access required by that Agreement; and

 

(d)    for suspending certain benefits accorded to the enterprises of any country that is a party to the Agreement on Government Procurement of the World Trade Organization.”

 

 

As at April 23, 2009, Bill C-306 has not moved beyond first reading in the House of Commons.  This means that the Bill does not have sufficient support of the Members of Parliament to pass first reading.  That being said, should the United States implement protectionist measures against Canada or if Canada feels that protectionism is occurring elsewhere, Bill C-306 could get support from the BQ Members, the NDP Members and others to pass first reading and proceed through Canada’s legislative process.  This is a Bill to watch.

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