New $5,000,000 threshold, before tax – BCF

The Quebec government recently made changes to the Integrity in Public Contracts Act. Since October 24th, the provincial threshold for receiving authorization from the Autorité des marchés financiers (AMF) to be awarded public construction contracts and subcontracts was reduced from $10 to 5 million. More specific measures are also being imposed for the City of Montreal.

This means that every contractor or sub-contractor wishing to bid on public projects worth $5 million or more will first have to apply to the AMF for authorization. It should be kept in mind that an application takes from 45 to 60 days in the best-case scenario so it’s wise to plan ahead.

Do the threshold amounts indicated in the Orders-in-Council under the Act include tax or not?

Although neither the Act nor the Orders-in-Council specify what constitutes an “expenditure”, the AMF considers that tax does not constitute an expenditure and therefore should not be included in the prescribed thresholds.

The AMF has adopted this position for the simple and good reason that public contracts are entered into with government agencies which, due to their nature, cannot consider tax an “expenditure”. They’re the ones who get the tax collected from taxpayers.

However, if a business bids an amount of $4,999,999, for example, the AMF does not exclude the possibility of considering the bid an attempt to circumvent the Integrity in Public Contracts Act.