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International Trade - Canadian Free Trade Agreement (CFTA). Canada (Attorney General) v. EllisDon Corporation
In Canada (Attorney General) v. EllisDon Corporation (Fed CA, 2024) the Federal Court of Appeal dismissed a federal AG JR, this of a Canadian International Trade Tribunal (CITT) ruling that "the Department of Public Works and Government Services (PW) had breached trade agreements by mismanaging a procurement process", and "recommending that the parties negotiate the quantum and reserving for itself the jurisdiction to establish the final amount".
Here the court illustrates various breaches of the CFTA by the Department of Public Works:[23] As for whether PW complied with the requirements in applicable trade agreements, the Tribunal discussed these requirements at paragraphs 55 and 62 of the Decision. It noted that under the Canadian Free Trade Agreement the procurement process must be fair and impartial. The Tribunal also stated that it was well established that proposals must be "“thoroughly and diligently”" reviewed (Decision at para. 62).
[24] The Tribunal found that the process was replete with errors. The errors identified by the Tribunal included:(i) PW improperly awarded the contract to EllisDon, despite having all the information and documentation required to identify and correct its own error at that time;
(ii) PW issued a stop work order the same day it sent the contract to EllisDon, placing EllisDon in an awkward "“hostage situation”" regarding the performance of the contract for an indeterminate period of time;
(iii) PW then gave Pomerleau false information, namely, that its bid was not verifiable at bid closing when PW knew or ought to have known that this information was false at that time and that the error was due solely to PW’s mishandling of Pomerleau’s bid; and
(iv) PW inexplicably delayed many weeks before notifying EllisDon and Pomerleau that it may have made a mistake even though it had information for months identifying the source for investigation to uncover PW’s error. [25] The Tribunal concluded that PW had breached its obligations under trade agreements, including article 515 of the Canadian Free Trade Agreement (Decision at para. 66). It listed three breaches: (1) "“initially failing to properly evaluate the bids in accordance with the requirements of the ITT”"; (2) "“wrongly awarding the [c]ontract to an unsuccessful bidder”"; and (3) "“negligently providing false information to a potential supplier”" (Decision at para. 63).
[26] As for whether the basis of the Complaint was a matter of contract administration or breach of trade agreements, the Tribunal determined that the breaches, above, were the basis of the Complaint and were properly before the Tribunal because they were not a matter of contract administration (Decision at para. 63).
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