Earlier this year, the Quebec National Assembly adopted the Integrity in Public Contracts Act. Before a business enterprise can even bid on or enter into public contracts, it must show its integrity, as well as that of its officers, directors and even shareholders in certain circumstances.

This applies not only to Quebec businesses, but also to foreign businesses. An application for authorisation must be filed with the Autorité des marchés financiers, and such authorisation granted before the business enters into a contract or subcontract with any Quebec government department or agency, including Quebec municipalities. An authorisation will not be granted “if the enterprise fails to meet the high standards of integrity that the public is entitled to expect from a party to a public contract or subcontract”.

Given the large number of enterprises concerned, the Quebec government is phasing in the Act.

As a transitional measure, the requirement to hold such an authorisation applies to construction and service contracts and subcontracts with a public body, and public-private partnership contracts, involving an expenditure of CAN$10 million or more, as well as listed contracts and subcontracts with the City of Montreal, some of which involve an expenditure of only CAN$25,000.

The obligation to be pre-authorised will progressively extend to all service and construction contracts, as well as supply contracts, and to all public-private partnership contracts, irrespective of the amount of the expenditure.

Although this piece of legislation is somewhat unique to Quebec at this point, it is certainly a trend indicator for other markets.