Access to Quebec’s Public Markets by U.S. Companies in Light of International Trade Agreements

Our public law team has examined the issue:

Legally speaking, can Quebec restrict access to its public markets for U.S. companies under the intergovernmental agreements to which Quebec is a party or has declared itself bound?

Amid the tariff threats from U.S. President Donald Trump, Quebec Premier François Legault announced his intention to impose penalties on U.S. companies bidding on public tenders, thereby nearly eliminating their chances of securing public contracts in Quebec.

The Canada-United States-Mexico Agreement (CUSMA) Does Not Apply to Quebec’s Public Markets

Canada voluntarily opted out of Chapter 13 of CUSMA, which pertains to public procurement, considering U.S. requirements to be excessive during negotiations. As a result, Quebec is not bound by CUSMA. The public procurement provisions of CUSMA apply only to the United States and Mexico.

Thus, the commitments under the World Trade Organization’s Agreement on Government Procurement (WTO-GPA) govern relations between Quebec and the United States regarding access to their respective public markets. This agreement is ultimately the only liberalization framework that grants U.S. companies non-discriminatory access to Quebec’s public procurement.

Contracts Covered by the WTO-GPA

In effect since April 6, 2014, the WTO-GPA aims to establish a transparent framework ensuring open and fair access for suppliers to the public procurement markets of member states. Public procurement activities are subject to the WTO-GPA under three conditions:

They must be conducted by a “covered entity”;
The entity must be purchasing goods, services, or construction services covered by the agreement;
The contract must exceed the applicable threshold for different types of contracts.

The WTO-GPA therefore guarantees U.S. companies access to contracts from Quebec ministries and certain public bodies only for contracts exceeding a monetary threshold of $627,200.

Quebec’s “covered entities” include ministries and the organizations listed in Annex 2 of Appendix I of the WTO-GPA. Several major public bodies are absent from this list, including those within the Health and Social Services network and the Education network. Other organizations, such as RAMQ, CNESST, SAAQ, SQI, and public transit authorities, are also excluded from the WTO-GPA’s scope.

Furthermore, the WTO-GPA allows procurement processes to be exempted from international competition on grounds of national security.

Thus, under certain conditions, Quebec can restrict U.S. companies’ access to its ministries and public bodies’ procurement. The current legislative framework already requires Quebec’s public bodies to prioritize domestic products and services for contracts below specific value thresholds.

Governments Have Multiple Tools to Address the Trade Dispute Initiated by the United States

The GBV team is equipped to advise and support Quebec and Canadian businesses in their dealings with these matters.

Our team: Me Charles-Francis Roy, Me Guillaume Lemieux, and Me Anne-Clara Girard-Tremblay.

Disclaimer: This publication is intended to provide general information on legal matters and developments as of the indicated date. The information provided does not constitute legal advice and should not be relied upon as such.