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Canada Strengthens its Approach to Addressing Corporate Wrongdoing in Procurement



On 27 March 2018, the Government of Canada announced enhancements to its government-wide Integrity Regime and the introduction of legislative amendments to create a remediation agreement regime to further strengthen its approach to addressing corporate wrongdoing in procurement.
In 2015, Public Services and Procurement Canada (PSPC), the Government of Canada's federal department responsible for procurement, introduced a government-wide Integrity Regime to ensure that the Canadian government only does business with ethical suppliers in Canada and abroad. Under the Integrity Regime, suppliers that have been convicted of certain offences are declared ineligible or suspended from doing business with the Canadian government. In 2017, the Government of Canada held a public consultation to seek input on potential enhancements to the Integrity Regime and on a possible Canadian deferred prosecution agreement (DPA) regime.
The Government of Canada has now announced that the Integrity Regime will be enhanced to:
- permit greater flexibility in ineligibility/suspension decisions, through consideration of a variety of mitigating and aggravating factors;
- introduce additional triggers that can lead to ineligibility/suspension, incorporating both further criminal offences and consideration of conduct as well as criminal convictions that undermine the public procurement system;
- explore alternative measures to further mitigate the risk of doing business with organized crime; and
- expand the scope of business ethics covered under the regime to introduce new triggers for ineligibility/suspension, including offences relating to human trafficking, labour rights and environmental protection.
The Government of Canada has also announced that it has introduced legislative amendments to Canada's Criminal Code to create a Canadian DPA regime, to be known as a Remediation Agreement Regime. Remediation agreements will be voluntary agreements between prosecutors and organizations accused of committing an offence. Such agreements will be subject to prosecutorial discretion and judicial approval and oversight. Remediation agreements will help to advance compliance measures and hold eligible organizations accountable for misconduct, while protecting innocent parties such as employees and shareholders from the negative consequences of a criminal conviction of the organization.
The enhanced Integrity Regime will be reflected in a revised Ineligibility and Suspension Policy, which will be released on 15 November 2018, and will come into effect on 1 January 2019. Subject to Parliamentary approval, the Remediation Agreement Regime will come into effect 90 days after the Budget Implementation Act (which contains the proposed legislative amendments) becomes law.
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Randeep Nijjar
Associate (Toronto/Canada)
Baker & McKenzie LLP
randeep.nijjar@bakermckenzie.com
+1 416 865 6962