The HST Blog : Canada Harmonized Sales Tax Lawyer Cyndee Todgham Cherniak for Assessments, PST & RST Issues in Ontario, British Columbia & Quebec

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The question may be asked in connection with the awarding of sole sourced HST consulting services contracts because the British Columbia list of covered entities was filed with the World Trade Organization in March 2010 (at the time of the Buy America Agreement). 

Annex 2 of Appendix I of the WTO Agreement on Government Procurement lists the covered entities in the provinces.  British Columbia covered "All Ministries, Boards, Commissions, Agencies and Committees of the Province" with the exception of the Legislative Assembly.  This means that if the Legislative Assembly hired the consultants, the WTO Agreement on Government Procurement would not provide a remedy.  If a government department hired the consultants, then the WTO Agreement on Government Procurement may cover the consulting contact provided that the value of the consulting agreement was higher than a monetary threshold amount of the services to be provided are listed services.

The monetary threshold is rather high.  The monetary threshold for goods and services (other than construction services) to be provided to a provincial government is 355,000 SDR (Special Drawing Rights).  Special Drawing Rights are a concept at the International Monetary fund that were incorporated in the WTO.  Generally speaking, the currency value of the SDR is determined by summing the values in U.S. dollars, based on market exchange rates, of a basket of major currencies (the U.S. dollar, Euro, Japanese yen, and pound sterling).  As on July 26, 2011, one SDR = 1.60949 USD.  few of the HST consulting contracts appear to be in this range of value.

Assuming that one or more contracts exceed the monetary thresholds, then Annex 4 of Appendix I of the WTO Agreement on Government Procurement must be reviewed to determine if the services to be provided under the contract are covered services.  This determination is made on a consulting contract by consulting contract basis.  More than likely the consulting services are covered services.

Assuming for the moment that the the consulting contracts are covered, they may be challenged on the basis that the contracts were improperly sole-sourced (meaning awarded to a party without an open procurement process).  The question will be whether any of the exceptions to the sole-sourcing rules apply.

Now, for the important part - The Canadian International Trade Tribunal (CITT) is Canada's governmental authority to consider government procurement bid challenges.  The bid challenge MUST be filed by the interested party within 10 days of time the basis for the challenge became known.  There isn't much time to consider whether this option is available and write the complaint.  A short letter is not sufficient.  the complaint must withstand scrutiny. The first step in the bid challenge procedure is for the CITT to determine if the complaint sets out a reasonable basis to conduct an inquiry.

For more information, please contact Cyndee Todgham Cherniak at 416-760-8999.