Publications
November 2014

Expenditure threshold lowered to $5M

By Stéphanie Provost Lawyer

The Act respecting contracting by public bodies (CQLR c C-65.1) determines the conditions applicable to contracts between public bodies and contractors (section 1). In 2012, it was significantly modified by the Integrity in Public Contracts Act (2012, chapter 25).

The Act respecting contracting by public bodies now stipulates that "an enterprise that wishes to enter into a contract with a public body involving an expenditure equal to or greater than the amount determined by the Government must obtain an authorization for that purpose from the Autorité des marchés financiers" (section 21.17). Since December 6, 2013, the expenditure threshold had been set at $10M.

It is important to note that this change and several other provisions apply to contracts granted by municipalities (section 938.3.3 of the Municipal Code of Québec, CQLR c C-27.1 and section 573.3.3.3 of the Cities and Towns Act, CQLR c C-19).

On October 24th, the $10M expenditure threshold was lowered to $5M (decree 796-2014). As a result, businesses seeking to enter into a public contract valued at $5M or more and for which the bidding or awarding process gets underway on or after October 24, 2014, must submit an authorization from the Autorité des marchés financiers.

In addition, businesses seeking to enter into subcontracts valued at $5M or more which are directly or indirectly related to a public contract must also provide an authorization.

The $10M expenditure threshold remains valid for all contracts whose bidding or awarding process began prior to October 24, 2014.

Furthermore, until March 31, 2016, the government may require that any business which is a party to a public contract that is in the process of being performed seek an authorization from the Autorité des marchés financiers (section 87, Integrity in Public Contracts Act).