Bill 67: The requirement for Quebec or Canadian content in public calls for tenders and other relevant changes

On September 30, 2020, the Government of Quebec tabled Bill 67 - An Act to establish a new development regime for the flood zones of lakes and watercourses, to temporarily grant municipalities powers enabling them to respond to certain needs and to amend various provisions.

A purpose of this bill is to allow municipalities to require, in the context of public calls for tenders for construction, supply, or service contracts, that goods or services come from Quebec or Canada. In some circumstances, the discretion conferred on municipalities is replaced by an obligation: they must require local content. These territorial discrimination measures are added to those already provided in the Cities and Towns Act.

For contracts that can be awarded without a public call for tenders, the bill requires municipalities to include temporary measures in their contract management policies to promote Quebec goods and services, as well as businesses that have an establishment in Quebec.

The bill also contains various administrative and financial amendments to address specific issues related to the COVID-19 pandemic.

Below is a summary of the key changes this bill introduces with regard to public contracts. These changes also apply to the metropolitan communities of Montreal and Quebec City as well as to the organizations covered by the Act respecting public transit authorities, including the Société de transport de Montréal and the Société de transport de Québec.

Quebec or Canadian content requirement

• Construction, supply, or service contracts

The bill provides that, in public calls for tenders for construction, supply, or service contracts involving expenditures below the ceiling ordered by the Minister of Municipal Affairs, Regions and Land Occupancy (“the Minister”),[1] municipalities may include a mandatory condition requiring that all or part of the goods or services be Canadian, or that all or part of the suppliers or contractors have an establishment in Canada.[2] Failure to comply with this condition may result in the rejection of the tender. 

The bill lists specifically fifteen types of services for which municipalities may include mandatory discrimination measures if below the aforementioned ceiling, including computer services, architectural or engineering services (except engineering services related to a single transportation infrastructure design and construction contract, which are included in a separate category, discussed below), purification services, garbage collection services, and road services.[3]

The bill also provides that municipalities may consider the Canadian origin of some of the goods, services, or businesses as an evaluation criterion when they use a system of bid weighting and evaluation. In such cases, the maximum number of points that can be assigned to this criterion may not exceed 10% of the total number of points for all criteria.

Lastly, the bill provides that municipalities must apply the above territorial discrimination measures in the case of the contracting process for construction, supply, or service contracts involving an expenditure equal or above $20 million and for which they consider the Canadian origin of some of the goods, services, or businesses as an evaluation criterion.

• Engineering services contracts for the design and construction of transportation infrastructure

The bill authorizes municipalities to require that all engineering services related to any single contract for the design and construction of transportation infrastructure be provided by suppliers from Canada, Quebec, or any territory determined by the municipality. Municipalities must apply this territorial discrimination measure to contracts involving an expenditure of $20 million or more.

• Service contracts for operating public property

Similarly, the bill provides that, for the purpose of any service contract, where contractors or suppliers operate all or part of a public property for the purpose of providing a service to the public, municipalities may require that the services be provided by a contractor or supplier from Canada, Quebec, or any territory determined by the municipality. Once again, municipalities must apply this territorial discrimination measure when such contracts involve an expenditure of $20 million or more.

• Contracts for the acquisition of mass transit vehicles

The bill allows municipalities to require that up to 25% of the total contract value for the acquisition of mass transit vehicles, involving an expenditure equal to or greater than the threshold to be decreed by the Minister, be subcontracted in Canada and that such subcontracts include the final assembly of the vehicles, including the installation and interconnection of certain parts and the vehicles’ final inspection, road tests, and final preparation for delivery. Municipalities must apply these territorial discrimination measures when such contracts involve an expenditure of $20 million or more.

Exceptions for public transit infrastructure contracts

The bill creates an exception to the rules governing the system of bid weighing and evaluation in the case of contracts related to public transit infrastructure. For these types of contracts, the government may authorize a municipality to (i) defer the disclosure and evaluation of the price; (ii) to evaluate only the price of the tenders that have obtained the minimum score for the other criteria of the system of bid weighting and evaluation; (iii) carry out discussions with any certified or qualified suppliers or contractors to clarify the project; (iv) not require the submission of preliminary tenders as a condition for participating in discussions to clarify the project; (v) negotiate individually with all the tenderers who have submitted compliant tenders but who offer a price higher than the estimate established by the municipality; and (vi) pay financial compensation in certain circumstances.

Measures to promote goods, services, and businesses in Quebec

The bill provides that all municipalities must, for three years, include measures that promote goods, services, and businesses in Quebec in their contract management policies for public contracts that do not require public calls for tenders because their value is less than $105,700. The bill specifies that goods assembled in Quebec are deemed to be made in Quebec, even if some of their parts do not come from Quebec.

Other administrative and financial amendments

• Integrity of electronically submitted bids

The bill changes the way the integrity of electronically submitted tenders is ascertained and the process for opening tenders in the event of irregularities.

At the opening of the tenders, municipalities must ascertain the integrity of those tenders submitted electronically, using the electronic tendering system.

If the integrity of a tender submitted electronically cannot be ascertained, the opening of the tenders must be suspended and the tenderer given two days to remedy the irregularity after receiving a notice of default. In such cases, the names of the tenderers and the total price of each tender will be disclosed within four working days of the suspension by publishing the result in the electronic tendering system.

• Borrowing powers and business support plans

We also note that the bill makes financial changes to address the issues facing municipalities as a result of the COVID-19 pandemic.

The bill provides that municipalities may, with the approval of the Minister, borrow funds to finance expenses incurred during the 2021 fiscal year, or to compensate for a decrease in their revenues for the same period, in connection with the COVID-19 pandemic.

Municipalities may also, without approval, authorize the borrowing of funds available in their general funds or working funds to finance expenses incurred during the 2020 or 2021 fiscal years, or to compensate for a decrease in their revenues for the same period, in connection with the COVID-19 pandemic.

The bill also provides that municipalities may adopt a business support plan allowing financial assistance in the form of a subsidy, loan, or tax credit in certain circumstances and for no longer than three years.

Next steps

Consultations are underway on Bill 67. Please contact us if you have any questions about the bill and the potential impacts of the changes on your business.

Bill 67 follows Bill 66, tabled by the Government of Quebec on September 23. Bill 66 seeks to facilitate the development of economic recovery programs to compensate from the impacts of the COVID-19 pandemic through various acceleration measures, including with respect to public contracts. See our article on Bill 66 for more information.