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Canadian Procurement Policy and COVID-19: Comparing Approaches

Canadian Procurement Policy and COVID-19: Comparing Approaches
April 21, 2020

COVID-19 has impacted both the type of goods and services to be procured, and the manner in which certain procurements are carried out. In Canada, with its different levels of public procuring authorities, different approaches have been introduced in response to COVID-19 to address the acquisition of “essential” or “priority” goods and services, or to exercise a level of control over the supply chain. The Canadian federal government has ordered centralized the procurement and related processes for certain goods and services on behalf of the federal, provincial and territorial governments, and, at the provincial level, some provincial governments have implemented supply management arrangements. We briefly consider different approaches in the below.

CANADA’S RESPONSE

Federal

At the federal level, there has been a focus on new procurements. On March 23, 2020, the Treasury Board of Canada Secretariat published Contracting Policy Notice 2020-1: Response to COVID-19 (CPN), which sets out amendments to the Treasury Board Contracting Policy. The CPN confirmed that as of March 20, 2020, the Treasury Board had approved time-limited increases to emergency contracting limits. Further, the CPN provides that Public Services and Procurement Canada (PSPC) is coordinating the centralized purchase of specific goods for the federal, provincial and territorial governments, and requires departments to verify with PSPC whether a coordinated procurement was being undertaken prior to proceeding with a procurement.  The CPN also reminds departments that the applicable provisions of the Government Contract Regulations under the Financial Administration Act, the Treasury Board Contracting Policy and other requirements continue to apply in relation to the award of contracts using the emergency contracting limits described in the CPN. The emergency contracting limits set out Part III of Appendix C of the Treasury Board Contracting Policy include the ability for the federal government, in specified circumstances, to enter into “non-competitive contracts.”

In addition, the PSPC has issued a public call to all suppliers who can provide emergency goods or services needed to respond to COVID-19. The call applies to medical products for prevention such as disposable N95 masks, vinyl gloves and hand sanitizer, but also applies to different services, such as security, nursing and food services.

Ontario

On March 27, 2020, the Government of Ontario proclaimed the Supply Chain Management Act in force in order to assist with the provision of critical supplies and equipment. This act provides for the central management of supply chains and allows for the collection of certain types of procurement data. The Coronavirus (COVID-19) Response and Recovery Regulation was also filed under this act. This regulation deems the Ministry of Government and Consumer Services as the supply chain management entity in respect of government and broader public sector entities and the Ministry of Health as the supply chain management entity in respect of health sector entities. The supply chain management entities provide or support supply chain management on behalf of the different government, broader public sector and health sector entities and are allowed to carry out a number of supply chain management activities as prescribed by the Supply Chain Management Act. This regulation also allows any government, broader public sector or health sector entity to utilize its existing arrangements to procure a good or service necessary to respond to COVID-19, as long as the entities comply with the prescribed reporting measures and allocation instructions from the appropriate supply chain management entity. For more information, please see our March 2020 Blakes Bulletin: Ontario’s Supply Chain Response to COVID-19.

Quebec

On March 13, 2020, upon declaring a health emergency throughout Quebec territory pursuant to Order-in-Council 177-2020 adopted in compliance with the Public Health Act—as renewed by Order-in-Council 22-2020, Order-in-Council 388-2020, Order-in-Council 418-2020 and Order-in-Council 460-2020—the Government of Quebec also authorized the Minister of Health Services and Social Services (MSSS) and health and social services establishments to enter into any contracts necessary to protect the health of the population, without delay or formality (i.e. without being required to comply with public procurement rules). Such procurements include the acquisition of supplies, equipment and medications or construction works of critical infrastructure. The Order also authorized the MSSS to make any expenses it deems necessary to protect the health of the population, without delay or formality. The aforementioned measures are currently in force until April 24, 2020, although their application could be further extended until the declaration of health emergency terminates. On April 14, 2020, the MSSS adopted a strategy to procure necessary medication, equipment and supplies considered critical or essential, including through reserves stored by suppliers or at central warehouses in the health and social services network. The MSSS also asked joint procurement groups in the health sector to suspend ongoing and future public procurement processes until April 17, 2020 (as extended as the case may be).

British Columbia

On March 26, 2020, pursuant to the Emergency Program Act (B.C.), the Minister of Public Safety and Solicitor General issued the Local Authorities and Essential Goods and Supplies (COVID-19) Order. The Order allows for greater government control over the supply chain in relation to essential goods and supplies” which includes—without limitation—food, water, fuel, gasoline, health care goods, pharmaceuticals and medical supplies, and includes the ability to (i) direct supply chains and (ii) require retailers and suppliers report inventory of essential goods and supplies. Suppliers will be required to coordinate the distribution of goods and services through a newly established Provincial Supply Chain Coordination Unit.

COMPARING APPROACHES

In considering the approaches adopted, at the both the federal and provincial levels, there have legislative or policy changes to support the increased centralization and control for the procurement of “essential” or “priority” goods and services. However, there are differences. For example, while at the federal level it appears that new procurements will continue to be guided by existing PSPC procurement processes, at the provincial level—at least, in Quebec—the government has allowed procuring entities to enter into contracts to address the current situation without delay or formality (i.e. without being required to comply with public procurement rules). Further, in B.C., the provincial government now has the ability to exercise a greater degree of control over certain elements of the supply chain itself (that is, extending beyond a procurement process to the suppliers of “essential goods and services”).

Canada is not alone in seeking to centralize, streamline and manage both its procurement processes and supply chain issues. Many countries are implementing measures to address local concerns. For example, as part of the U.K. government’s efforts to manage continuity of service during the COVID-19 pandemic, the U.K. Cabinet Office has published two Procurement Policy Notes: PPN 01/20 - Responding to COVID-19 and ​PPN 02/20 - Supplier Relief due to COVID-10​ (PPN 02/20), which are applicable to all contracting authorities, including central government departments, executive agencies, local authorities, National Health Service bodies and other public sector bodies. PPN 02/20 sets out information and guidance for procuring authorities in relation to the payment to their suppliers, directing U.K. procuring authorities to proactively review their existing contractual arrangements and “inform suppliers who they believe are at risk that they will continue to be paid as normal (even if service delivery is disrupted or temporarily suspended) until at least the end of June.”

As the impacts of the COVID-19 evolve and the gradual lifting of lockdowns are being discussed, it is likely that the response by Canadian procurement authorities at both the federal and provincial levels will evolve and adapt.

For further information, please reach out to a member of our Procurement group or your usual Blakes contact.
 
Please visit our COVID-19 Resource Centre to learn more about how COVID-19 may impact your business.