Procurement

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TABLE OF CONTENTS

• ORDER
• STATEMENT OF REASONS
• • COMPLAINT
  • ANALYSIS

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IN THE MATTER OF a complaint filed by Financial Smarts under subsection 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C. 1985 (4th Supp.), c. 47;

AND FURTHER TO a decision to conduct an inquiry into the complaint under subsection 30.13(1) of the Canadian International Trade Tribunal Act;

AND IN THE MATTER OF submissions filed by Financial Smarts and the Financial Consumer Agency of Canada in relation to the jurisdiction of the Canadian International Trade Tribunal to conduct an inquiry into the complaint at issue.

BETWEEN
FINANCIAL SMARTS	Complainant
AND
THE FINANCIAL CONSUMER AGENCY OF CANADA	Government Institution

Pursuant to paragraph 10(b) of the Canadian International Trade Tribunal Procurement Inquiry Regulations, the Canadian International Trade Tribunal hereby dismisses the complaint.

Hélène Nadeau
Hélène Nadeau
Secretary

Tribunal Member:	Pasquale Michaele Saroli, Presiding Member
Research Director:	Randolph W. Heggart
Senior Investigator:	Michael W. Morden
Investigator:	Josée B. Leblanc
Counsel for the Tribunal:	Jidé Afolabi
Complainant:	Financial Smarts
Government Institution:	Financial Consumer Agency of Canada
Counsel for the Government Institution:	Joseph de Pencier

Please address all communications to:

COMPLAINT

1. On July 10, 2009, Financial Smarts filed a complaint with the Canadian International Trade Tribunal (the Tribunal) under subsection 30.11(1) of the Canadian International Trade Tribunal Act ¹ concerning a procurement for the curriculum writing of the Financial Consumer Agency of Canada’s (FCAC) Financial Basics Education Program for adults.

2. Financial Smarts alleges that the FCAC improperly evaluated the presentation portion of its proposal. By way of remedy, Financial Smarts requests, in addition to its bid preparation and complaint costs, that the Tribunal recommend that the contract awarded to Social and Enterprise Development Innovations be cancelled and that Financial Smarts’ proposal be re-evaluated by an independent evaluation committee.

3. On July 17, 2009, the Tribunal notified the parties that the complaint had been accepted for inquiry, as it met the requirements of subsection 30.11(2) of the CITT Act and the conditions set out in subsection 7(1) of the Canadian International Trade Tribunal Procurement Inquiry Regulations. ² As a preliminary matter, the Tribunal also invited submissions from the FCAC and Financial Smarts on the specific issue of whether the FCAC is a “government institution” for the purposes of the Agreement on Internal Trade, ³ the North American Free Trade Agreement, ⁴ the Agreement on Government Procurement ⁵ and/or the Canada-Chile Free Trade Agreement. ⁶

4. On July 22, 2009, the FCAC made a submission on the applicability of the above trade agreements to the FCAC and, on July 24, 2009, Financial Smarts filed its submission on the same topic with the Tribunal.

5. On July 29, 2009, the FCAC and Financial Smarts submitted comments on each other’s submissions.

ANALYSIS

6. Subsection 30.11(1) of the CITT Act, which allows a potential supplier to file a complaint in relation to a designated contract, provides as follows:

Subject to the regulations, a potential supplier may file a complaint with the Tribunal concerning any aspect of the procurement process that relates to a designated contract and request the Tribunal to conduct an inquiry into the complaint.

[Emphasis added]

7. The definition of “designated contract” in section 30.1 of the CITT Act requires that the contract be awarded by a “government institution”. It reads as follows:

“designated contract” means a contract for the supply of goods or services that has been or is proposed to be awarded by a government institution and that is designated or of a class of contracts designated by the regulations.

[Emphasis added]

8. Section 30.1 of the CITT Act, in turn, defines “government institution” as follows:

“government institution” means any department or ministry of state of the Government of Canada, or any other body or office, that is designated by the regulations .

[Emphasis added]

9. In this regard, subsection 3(2) of the Regulations provides as follows:

For the purposes of the definition “government institution” in section 30.1 of the Act, the following are designated as government institutions:

(a) the federal government entities set out in the Schedule of Canada in Annex 1001.1a-1 of NAFTA, under the heading “CANADA” in Annex 502.1A of the Agreement on Internal Trade, under the heading “CANADA” in Annex 1 of the Agreement on Government Procurement or in the Schedule of Canada in Annex Kbis-01.1-1 of Chapter Kbis of the CCFTA;

(b) the government enterprises set out in the Schedule of Canada in Annex 1001.1a-2 of NAFTA, under the heading “CANADA” in Annex 3 of the Agreement on Government Procurement or in the Schedule of Canada in Annex Kbis-01.1-2 of Chapter Kbis of the CCFTA;

(c) any provincial government entities that may be set out in Annex 1001.1a-3 of NAFTA or under the heading “CANADA” in Annex 2 of the Agreement on Government Procurement; and

(d) if a procurement that results in the award of a designated contract by a government entity or enterprise referred to in paragraph (a), (b) or (c) is conducted by the Department of Public Works and Government Services or its successor, that Department or its successor.

10. Paragraphs 3(2)(c) and (d) of the Regulations are clearly not applicable in the present circumstance. As for paragraphs 3(2)(a) and (b), while the Department of Finance is an entity that is specifically listed in all of the trade agreements referenced, the FCAC is not.

11. As the FCAC is not specifically designated by regulation as a “government institution”, the Tribunal is confronted with the issue of whether the FCAC is otherwise covered through designation in the regulations of any other department, ministry of state, body or office.

12. In its submission of July 22, 2009, the FCAC submitted that, because the FCAC is not listed in any of the annexes to the trade agreements, it is not a government institution for the purpose of complaints by potential suppliers under the CITT Act.

13. In its submission of July 24, 2009, Financial Smarts submitted that the FCAC is a “government institution”. In this regard, it argued that the fact that the FCAC is not a specifically listed entity is simply because of its recent creation, as the FCAC was not in existence when the lists were compiled. Financial Smarts also submitted that the FCAC is a part and an agency of the Department of Finance, itself a listed entity. In support of this position, Financial Smarts noted, among other things, that:

the FCAC reports to Parliament through the Minister of Finance;

the FCAC is a federal government regulatory agency;

the Financial Consumer Agency of Canada Act ⁷ clearly states that the FCAC is an agency of the Government of Canada and is overseen by the Minister of Finance; and

the FCAC’s Web site indicates that the FCAC reports to the Minister of Finance on its activities and on the legislative framework for consumer protection.

14. In its reply submission of July 29, 2009, the FCAC countered that it is not a part or an agency of the Department of Finance. The FCAC noted that it was established by its own legislation, which does not contain any provision conferring on the Department of Finance any authority over the FCAC.

15. Finally, in its reply submission of July 29, 2009, Financial Smarts submitted that the trade agreements do not specifically say that agencies or groups not included in the annexes are not government institutions. According to Financial Smarts, there are numerous organizations that, while not listed in the annexes, report to, are controlled by, or are agencies of the entities listed in the annexes, and that, as demonstrated by other rulings of the Tribunal, are deemed to be government institutions. Financial Smarts also reiterated its position that, since the Minister of Finance has authority over the FCAC, the FCAC is a government institution.

16. The Tribunal notes that the FCAC was indeed established by an act of Parliament. Specifically, subsection 3(1) of the FCAC Act provides as follows:

There is hereby established an agency of the Government of Canada called the Financial Consumer Agency of Canada over which the Minister shall preside and for which the Minister shall be responsible.

[Emphasis added]

17. Subsection 3(2) of the FCAC Act identifies the objects of the agency as follows:

. . . 

(a) supervise financial institutions to determine whether they are in compliance with the consumer provisions applicable to them;

(b) promote the adoption by financial institutions of policies and procedures designed to implement consumer provisions applicable to them;

(c) monitor the implementation of voluntary codes of conduct that are designed to protect the interests of customers of financial institutions, that have been adopted by financial institutions and that are publicly available and to monitor any public commitments made by financial institutions that are designed to protect the interests of their customers;

(d) promote consumer awareness about the obligations of financial institutions under consumer provisions applicable to them; and

(e) foster, in co-operation with any department, agency or agent corporation of the Government of Canada or of a province, financial institutions and consumer and other organizations, an understanding of financial services and issues relating to financial services.

18. While the Minister of Finance presides over, and is responsible for, the FCAC, subsection 4(1) of the FCAC Act provides for the appointment of a commissioner by the Governor in Council, as follows:

The Governor in Council shall appoint an officer to be called the Commissioner of the Financial Consumer Agency of Canada. The Commissioner has the rank and all the powers of a deputy head of a department.

19. Further, section 5 of the FCAC Act goes on to delineate the specific powers, duties and functions conferred upon the Commissioner.

20. The Department of Finance is itself established pursuant to section 14 of the Financial Administration Act, ⁸ which states:

There is hereby established a department of the Government of Canada called the Department of Finance over which the Minister of Finance appointed by commission under the Great Seal shall preside.

21. While the Minister of Finance presides over and is responsible for both the Department of Finance and the FCAC, it is the Tribunal’s view that a distinction must be drawn between government institutions, on the one hand, and the ministers designated to preside over them, on the other. In this regard, Black’s Law Dictionary, for instance, defines “institution” as an “established organization”. ⁹ Further, it has been clearly laid out in Canadian jurisprudence that a distinct difference exists within the machinery of government between government institutions and the ministers responsible for those institutions. Thus, for instance, in Canada (Information Commissioner) v. Canada (Minister of National Defence), ¹⁰ the Federal Court of Appeal stated that “. . . the offices of Ministers are institutions of government that are separate from the departments over which the Ministers preside.”

22. The fact that the powers, duties and functions of the FCAC under its enabling legislation extend to certain listed acts ¹¹ in respect of which the Minister of Finance is designated as responsible Minister and that the Commissioner is required to report to the Minister of Finance on all matters connected with the administration of the FCAC Act and on the consumer provisions of those other listed acts does not preclude the FCAC from being considered a government institution in its own right. In this regard, the FCAC does not operate within the institutional structure of the Department of Finance pursuant to specific responsibilities assigned to it by the Minister of Finance. Rather, the FCAC was established as an independent agency by an act of Parliament; it has its own specific objects; and its Commissioner is vested with the specific powers, duties and functions considered necessary by Parliament for the furtherance of those objects. In the Tribunal’s view, this renders the FCAC a “government institution” in its own right, notwithstanding the fact that the Minister of Finance presides over and is responsible for its operation and that the FCAC’s mandate extends to specific aspects of legislation in respect of which the Minister of Finance is designated as responsible minister.

23. This view is consistent, for instance, with the treatment accorded the FCAC by the Financial Administration Act, which is the cornerstone of the legal framework for the general financial management and accountability of public service organizations and Crown corporations. ¹² In particular, the definition of “department” for the purposes of that statute is as follows:

. . . 

“department” means

(a) any of the departments named in Schedule I,

(a.1) any of the divisions or branches of the federal public administration set out in column I of Schedule I.1,

(b) a commission under the Inquiries Act that is designated by order of the Governor in Council as a department for the purposes of this Act,

(c) the staffs of the Senate, House of Commons, Library of Parliament, office of the Senate Ethics Officer and office of the Conflict of Interest and Ethics Commissioner, and

(d) any departmental corporation;

. . .

24. An examination of Schedule I and column 1 of Schedule I.1 reveals that, while the Department of Finance is explicitly named in the former, the FCAC is explicitly listed in the latter. Accordingly, the FCAC is considered a separate entity or, for the purposes of that act, a “department,” a designation the Tribunal considers to be highly instructive with regard to the intentions of Parliament concerning the status of the FCAC within the federal public administration.

25. The Tribunal is aware that, subsequent to the government re-organization that resulted in the dissolution of the Department of Employment and Immigration, which had been a listed entity under the trade agreements, and the re-constitution of some of the objects and related powers of that defunct department within the Department of Human Resources Development, the Tribunal has assumed jurisdiction in matters concerning that successor institution. ¹³ However, the Tribunal is of the view that a distinction must be drawn between true successors and new institutions.

26. In any event, as Financial Smarts did not argue that the FCAC ought to be considered a successor institution to the Department of Finance, the Tribunal will not examine the issue to an exacting extent, other than to clearly indicate that the fact that a new institution’s statutory authority rests upon legislation for which the minister of a subsisting institution is responsible and the fact that the legislation stipulates specific reporting obligations to that minister does not, in and of itself, necessarily provide a conclusive basis for the conferring of successor status on the new institution for purposes of procurement inquiries. Undoubtedly, the determination of the issue will turn on the specific facts of each case.

27. Having regard to all of the above, the Tribunal does not consider that the contract in question is one that was awarded by a “government institution” within the meaning ascribed to that term by the CITT Act. Accordingly, it does not meet the definition of a “designated contract”, with the result being that the Tribunal is deprived of jurisdiction to conduct an inquiry into the matter.

28. Consequently, pursuant to paragraph 10(b) of the Regulations, the Tribunal hereby dismisses the complaint.

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¹ . R.S.C. 1985 (4th Supp.), c. 47 [CITT Act].

² . S.O.R./93-602 [Regulations].

³ . 18 July 1994, C. Gaz. 1995.I.1323, online: Internal Trade Secretariat <http://www.ait-aci.ca/index_en/ait.htm>.

⁴ . North American Free Trade Agreement between the Government of Canada, the Government of the United Mexican States and the Government of the United States of America, 17 December 1992, 1994 Can. T.S. No. 2 (entered into force 1 January 1994) [NAFTA].

⁵ . 15 April 1994, online: World Trade Organization <http://www.wto.org/english/docs_e/legal_e/final_e.htm>.

⁶ . Free Trade Agreement between the Government of Canada and the Government of the Republic of Chile, 1997 Can. T.S. No. 50 (entered into force 5 July 1997) [CCFTA]. Chapter Kbis, entitled “Government Procurement”, came into effect on September 5, 2008.

⁷ . S.C. 2001, c. 9 [FCAC Act].

⁸ . R.S.C. 1985, c. F-11.

⁹ . Eighth ed., s.v. “institution”.

¹⁰ . 2009 FCA 175 (CanLII).

¹¹ . These include the Bank Act, the Insurance Companies Act, the Trust and Loan Companies Act, the Co-operative Credit Associations Act and the FCAC Act.

¹² . See http://www.tbs-sct.gc.ca/report/rev-exa/faa-lgfp/faa-lgfp03-eng.asp.

¹³ . Re Complaint Filed by Novell Canada, Ltd. (7 July 1999), PR-99-001 (CITT).