Government of Canada's Integrity Regime

The Integrity Regime consists of:

• the Public Works and Government Services Canada (PWGSC) Ineligibility and Suspension Policy; and
• associated integrity provisions that are incorporated into federal solicitations and contracts/leases.

The regime applies government-wide to procurement and real property transactions undertaken by departments and agencies, as identified in Schedule I, I.1 and II of the Financial Administration Act.

The Integrity Regime applies to:

• construction contracts;
• goods and services contracts; and
• real property transactions.

The regime applies to all procurement and real property transactions as there is no dollar threshold.

Specific classes of contracts are exempt from the application of the regime (e.g., transfer payments, financial contracts and transactions with other orders of government).

A supplier^{Footnote 1} is ineligible to do business with the Government of Canada if they, or members of their board of directors have been convicted or absolutely/conditionally^{Footnote 2} discharged in the last three years of one of the following listed offences or a similar foreign offence:

• payment of a contingency fee to a person to whom the Lobbying Act applies;
• corruption, collusion, bid-rigging or any other anti-competitive activity under the Competition Act;
• money laundering;
• participation in activities of criminal organizations;
• income and excise tax evasion;
• bribing a foreign public official;
• offences in relation to drug trafficking;
• extortion;
• bribery of judicial officers;
• bribery of officers;
• secret commissions;
• criminal breach of contracts;
• fraudulent manipulation of stock exchange transactions;
• prohibited insider trading;
• forgery and other offences resembling forgery; and
• falsification of books and documents.

If an affiliate of a supplier has been convicted of a listed offence or a similar offence abroad, an assessment will be made to determine if there was any participation or involvement from the supplier in the actions that led to the affiliate's conviction. If it is determined to be the case, the supplier will be rendered ineligible.

Suppliers will be required to secure the services of an independent third party to undertake the assessment of their involvement in the actions of the affiliate that led to the conviction. This assessment will be provided to PWGSC and a determination will be rendered by the Minister.

A supplier convicted or absolutely/conditionally discharged^{Footnote 2} of a listed offence will be ineligible for 10 years from the date of determination.

A supplier may have its ineligibility period reduced by five years, if they demonstrate that they:

• cooperated with law enforcement authorities; or
• have undertaken remedial action(s) to address the wrongdoing.

The identified reductions are not additive.

A supplier may at any time apply for a reduced ineligibility period.

An administrative agreement would be imposed to monitor the supplier's progress.

A supplier convicted of frauds against the government under the Criminal Code of Canada or under the Financial Administration Act results in permanent ineligibility unless a record suspension is obtained.^{Footnote 3}

A Public Interest Exception and/or an administrative agreement cannot be invoked or applied to these situations.

A supplier may be ineligible to do business with the Government of Canada for up to 18 months if it is charged or admits guilt to one of the listed or similar foreign offences. This period may be extended if a judicial process is underway.

Alternatively, the Government of Canada may impose an administrative agreement on the supplier to take interim action.

Suppliers are notified of their ineligibility/suspension and provided information of the process(es) available to them.

A supplier is able to come forward at any time and ask for an advanced determination. Upon a determination of ineligibility, the supplier would see their ineligibility period begin immediately. This will incent suppliers to come forward and proactively disclose wrongdoing.

An administrative review process of the assessment of affiliates would be available to the supplier.

The Public Interest Exception applies in circumstances in which it is necessary to the public interest to enter into business with a supplier that has been convicted or has been conditionally or absolutely discharged of an offence under the Integrity Regime.

Possible circumstances necessary to the public interest could include:

• no other supplier is capable of performing the contract;
• an emergency;
• national security;
• health and safety; and
• economic harm^{Footnote 4}.

The exception is applied on a case-by case basis by the department issuing the contract.

When a Public Interest Exception is involved, an administrative agreement between PWGSC and the supplier is required.

If a conviction occurs during a contract, the Government retains the right to terminate a contract or real property agreement for default. Suppliers will be afforded an opportunity to show cause as to why the termination should not be exercised.

An administrative agreement between the supplier and PWGSC will be required if a decision is taken to not terminate the contract or real property agreement. This will require third party monitoring of the terms of the agreement.

A supplier cannot subcontract with an ineligible supplier.

Any supplier that knowingly enters into a contract with an ineligible sub-contractor will be ineligible for five years.

Should a supplier require the services of a suspended or ineligible sub-contractor, they will require the advance approval of PWGSC.

A supplier certifies with their bid that they, members of their board of directors, and affiliates have not been charged, convicted or absolutely/conditionally discharged of one of the listed offences or a similar foreign offence in the past three years.

A supplier will be ineligible for a period of 10 years if it provides false or misleading information in its certification.

An administrative agreement is an agreement between the supplier and PWGSC that is to be used in cases where it is determined that it is necessary to exercise additional caution in order to further mitigate risks of contracting with a particular supplier. The agreement would include conditions (such as remedial and compliance measures) that the supplier must fulfill in order to be eligible to contract with the Government of Canada. 

Administrative agreements will be available to be used in instances where:

• an ineligible supplier has had their ineligibility period reduced;
• in lieu of suspending a supplier;
• a public interest exception was invoked with a ineligible supplier; or
• a decision is made to continue with an existing contract with a supplier which has become non-compliant with the regime.

Monitoring of the terms of an administrative agreement would be conducted by an independent, qualified third party monitor paid for by the supplier.

In specific situations (as outlined above), suppliers will be required to obtain and pay for the services of an independent, qualified third party that will monitor and verify the progress of suppliers as per the terms of their administrative agreement. Third parties will also be used in assessing foreign convictions and the level of participation of a supplier in the wrongdoing of an affiliate.

The Minister of PWGSC will make all determinations of ineligibility.

The Integrity regime will be administered by PWGSC on behalf of the Government of Canada and will be governed by Memoranda of Understanding between PWGSC and other departments and agencies.

PWGSC will produce a public listing of ineligible and/or suspended suppliers.