Public contracting and anti-corruption: Québec lowers the contract value threshold for requiring prior authorization to enter service contracts and subcontracts with public bodies

3 minute read
01 June 2015

On June 10, 2015, an Order in Council was published by the Government of Québec reducing the threshold from $5 million to $1 million for authorization prior to bidding on service contracts and subcontracts with public bodies in Québec. The new threshold will be effective as of Nov. 2, 2015.

Pursuant to An Act respecting contracting by public bodies (chapter C-65.1) (the “Act”), prior authorization from the province’s financial sector oversight body, Autorité des marchés financiers (AMF), is required for any enterprise, located within or outside the province of Québec, to enter into a construction, service or public-private partnership contract or subcontract with a Québec public body involving an expenditure greater than the thresholds set by an Order in Council.

The Order in Council will only apply to service contracts and subcontracts; the applicable threshold for construction and public-private partnership contracts and subcontracts will remain at $5 million.

According to a press release issued by the Cabinet du ministre responsable de l'Administration gouvernementale et de la Révision permanente des programmes et président du Conseil du trésor, the lower threshold will result in an increase from 1,300 to 2,650 in the number of enterprises that will require the issuance of an authorization by the AMF. 

The effective date of Nov. 2, 2015, is less than five months away. Given the application process is expected to take several weeks before a decision is issued by the AMF and the provincial anti-corruption squad, enterprises planning to bid on service contracts with values greater than $1 million should soon begin preparing the information required for the application.

At Gowlings, we have experience assisting enterprises in applying the Act, in determining whether their contract is indeed a service contract as opposed to a supply contract and in navigating the application process with the AMF for prior authorization. For more information, please feel free to contact any member of our team.

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