Canadian Free Trade Agreement (CFTA)
The domestic agreement opening government procurement among the provinces and the federal government above set thresholds. It governs most Canadian public tenders that must be openly competed.
Definition
The Canadian Free Trade Agreement, in force since 2017 and replacing the older Agreement on Internal Trade, is an accord among the federal, provincial, and territorial governments to reduce barriers to trade, investment, and labour mobility within Canada. Its procurement chapter requires covered public-sector entities to open procurements above specified thresholds to suppliers from anywhere in Canada on a non-discriminatory basis. For cleaning and facilities services, CFTA is the agreement that most often applies, because its thresholds are lower than the international agreements and most public cleaning contracts are domestic in scope.
How it works in Canadian procurement
When a covered entity's procurement exceeds the CFTA threshold for its category, it must use open and transparent procedures: public posting on an electronic tendering system, sufficient time to bid, objective criteria, and access to a bid-challenge mechanism. Thresholds differ for goods, services, and construction and are adjusted periodically. CFTA also limits local-preference conditions, so a municipality generally cannot require bidders to be locally based for a covered procurement. Cleaning contracts that exceed the services threshold must be posted where suppliers across Canada can find and bid on them, which is part of why provincial and municipal cleaning tenders appear on open portals.
Common confusions
CFTA is domestic; it governs trade among Canadian jurisdictions, while CETA, CPTPP, and the WTO agreement govern access for foreign suppliers. The agreements stack: a large tender can be covered by CFTA and one or more international agreements at once. CFTA also contains exceptions; certain procurements, set-asides, and entities are excluded, and below-threshold purchases are not covered, so not every public cleaning contract must be openly tendered under CFTA. Finally, CFTA replaced the Agreement on Internal Trade, so older documents referencing the AIT are describing the predecessor regime.
Frequently asked questions
A domestic agreement among federal, provincial, and territorial governments that requires covered public buyers to open procurements above set thresholds to suppliers from across Canada.
Many municipal and broader-public-sector entities are covered above the services threshold, which is why larger municipal cleaning tenders must be openly posted and cannot require bidders to be locally based.
The Agreement on Internal Trade (AIT). Documents referencing the AIT are describing the predecessor to CFTA.
Related terms
- Comprehensive Economic and Trade Agreement (CETA): The Canada-EU trade agreement.
- Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): A multi-country Pacific trade agreement whose procurement chapter opens covered Canadian government contracts above set thresholds to suppliers from member economies.
- What Is a Tender: A tender is a formal invitation by a public-sector buyer for suppliers to submit competitive bids for goods or services.
- Public Sector: The part of the economy run by government and publicly funded bodies, including the broader public sector of schools, hospitals, and agencies, that buys goods and services through public procurement.
See Canadian Free Trade Agreement (CFTA) terms in real Canadian government contracts
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