Canada Gazette, Part I, Volume 156, Number 25: Regulations Amending the Government Contracts Regulations

June 18, 2022

Statutory authority
Financial Administration Act

Sponsoring department
Treasury Board Secretariat

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The proposed amendments to the Government Contracts Regulations (“Regulations”) are intended to address the following issues:

  1. The Regulations require Treasury Board approval of the timing and amounts of advance payments when its approval for contract entry is 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. If a province changes its sales tax rate, then the amounts of the advance payments would differ from the amounts in the Treasury Board approval. Similarly, it is often advantageous to the Crown to make an advance payment at a different date than that approved by Treasury Board to obtain a lower overall cost or to address some delay by the contractor. When either the timing or amounts are different, the department must seek Treasury Board approval of the new timing and amounts. This process is time-consuming, administratively burdensome and provides 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. The bid solicitation requirements under the Regulations apply when entering into contracts including service contracts for expert witness testimony and advice, and contracts to implement a settlement agreement, a court order, or a judgment in a class proceeding to which Her 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 Her Majesty’s legal position or strategy adopted or to be adopted in the conduct of a litigation, a potential litigation, or a dispute resolution process. Similarly, soliciting bids could jeopardize the ability of Her 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. Generally, such terms will include provisions for the mutual selection or appointment of a third party whose services are required to implement the terms of the agreement or the court order or judgment.

Objective

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

Description

The proposed Regulations Amending the Government Contracts Regulations (proposed Regulations) would

  • (1) remove the legal requirement for Treasury Board to approve the timing and amounts of advance payments in situations where Treasury Board approval for contract entry is required under a policy, as well as remove the general provisions regarding entry into a contract that provides for the making of advance payments and progress payments, and the definition of the term “progress payment”
  • (2) replace the title “Commissioner of the Communications Security Establishment” with “Intelligence Commissioner” in the Schedule to the Regulations
  • (3) exclude from the requirement to solicit bids, service contracts for expert advice or testimony for the purpose of informing or advancing Her Majesty’s legal position in a litigation, potential litigation, or a dispute resolution process, or that are required to implement the terms of a settlement agreement or a court order or judgment in a class proceeding to which Her Majesty is a party.

Regulatory development

Consultation

The proposed Regulations are included in the Treasury Board of Canada Secretariat’s Forward Regulatory Plan, which is publicly available on the Secretariat’s website. Since the amendments do not have a direct impact on Canadians, no consultations have been undertaken prior to the pre-publication.

The Intelligence Commissioner will be consulted by email about the name change in the Schedule immediately following prepublication.

Modern treaty obligations and Indigenous engagement and consultation

The proposed Regulations would not impact the Crown’s obligations under modern treaties. They would 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 proposed amendments to remove the requirement to solicit bids for certain professional service contracts could have an impact on Indigenous peoples offering such services. However, none of the proposed 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 is no alternative to use another instrument to reduce the administrative burden associated with the regulatory obligation for Treasury Board approval of certain advance payments. In addition, there is no alternative to updating the name of the Intelligence Commissioner in the Regulations or to exempt 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 proposed Regulations would decrease the administrative cost 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 would reduce 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.

There would be no cost associated with updating the title of the Intelligence Commissioner. The amendment would make it clear to anyone inside or outside of the federal government that the Intelligence Commissioner is exempt from the requirement that contracts for legal services must be entered into by or under the authority of the Minister of Justice.

There would be no cost associated with the removal of the obligation for Treasury Board to approve the timing and amounts of advance payments where Treasury Board approval is required to enter into a contract, or the removal of the permissive authority for contracting authorities to enter into contracts that provide for making advance payments and progress payments. The amendment to remove the provisions for making an advance and progress payments would streamline the Regulations. The amendment would not prevent a contracting authority from entering into a contract that provides for the making of an advance or progress payment on the basis of existing authorities under a minister’s inherent common law power to contract or under applicable legislation.

There would be no cost associated with the removal of the requirement to solicit bids for contracts for expert testimony or advice, and contracts to implement settlement agreements or court orders or judgments in class proceedings. The exclusion of contracts for expert testimony and advice would mitigate the risk of disclosure of information through the bid solicitation process, which could be injurious to Her Majesty’s legal position adopted or to be adopted in the conduct of a litigation, a potential litigation or a dispute resolution process. Expert witnesses tend to offer specialized services that may be available from only one supplier, or it may be that soliciting bids for expert services could jeopardize the ability of Her Majesty to advance or inform her legal position in a litigation, potential litigation or a dispute resolution process in a timely manner.

Similarly, soliciting bids could jeopardize the ability of Her Majesty to resolve a class proceeding on terms that are acceptable to the other party to the dispute or to fulfil the terms of a settlement agreement in a class proceeding to which Her Majesty is a party, or a court order or judgment in such a proceeding. Generally, the terms of a class proceeding settlement agreement include provisions for the mutual selection or appointment of a third party whose services are required to implement the terms of the agreement. The number of contracts varies with the number of settlement agreements the Crown enters into and it varies from year to year. The contracts to administer the agreements are often quite large and complex, while the agreements with individual assessors are relatively small and straightforward. Many of these contracts are non-competitive, and the proposed Regulations would not increase the number of non-competitive contracts.

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

Small business lens

The small business lens does not apply to this proposal as businesses are not subject to the Regulations. In addition, the removal of the obligation for Treasury Board approval of advance payments for certain contracts would streamline the information that departments request from bidders on government contracts.

One-for-one rule

The one-for-one rule does not apply to this proposal as there is no change in the administrative cost to business.

Regulatory cooperation and alignment

This proposal is not related to a work plan or commitment under a formal regulatory cooperation forum.

Strategic environmental assessment

The preliminary scan indicated that a strategic environmental assessment was not needed.

Gender-based analysis plus

No gender-based analysis plus (GBA+) impacts have been identified for this proposal.

Implementation, compliance and enforcement, and service standards

The existing compliance and enforcement protocols associated with the Regulations would remain the same. Following entry-into-force of the proposed Regulations, the Treasury Board of Canada Secretariat would notify departments and provide guidance on how to comply with the amended Regulations.

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

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, under subsections 41(1)footnote a of the Financial Administration Actfootnote b, proposes to make the annexed Regulations Amending the Government Contracts Regulations.

Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Glenn Richardson, Senior Advisor, 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 (tel.: 613‑818‑4414; email: Glenn.Richardson@tbs-sct.gc.ca).

Ottawa, June 9, 2022

Wendy Nixon
Assistant Clerk of the Privy Council

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):

  • (d.1) a service contract for expert advice or testimony for the purpose of informing or advancing Her Majesty’s legal position in a litigation, a potential litigation, or a dispute resolution process;
  • (d.2) a contract for the implementation of a settlement agreement in a class proceeding to which Her Majesty is a party, or of a court order or judgment in such a proceeding;

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

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

The Commissioner of the Communications Security Establishment
Le commissaire du Centre de la sécurité des télécommunications

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

The Intelligence Commissioner
Le commissaire au renseignement

Coming into Force

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