Hard Hat Forum: December 1, 2016

Topic: Procurement and Project Development Issues for Municipalities

Dentons Construction and Infrastructure Team

Dentons Canada LLP

A case study

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• Project: pump station building

• What issues are raised?• Authority to undertake the project• Consultation• Funding/taxes/borrowing• Property purchase• Regulating authority• Zoning authority• Utility provider• Transparency/freedom of information• Project proponent

• Delivery method• Operational responsibility

• Procuring authority• Purchasing Bylaws/policies• Trade treaties

• Contract counterparty• Contract Administrator

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Sample Project

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• Recall where municipal authority to act in these roles comes from• Municipality (a creature of statute) can only exercise powers expressly granted

• Authority to provide and regulate municipal services?• Community Charter, s. 8

• Municipality has capacity and powers of a natural person• Municipality may provide any service council considers necessary or desirable, directly or through

another authority/person• Council may regulate and impose requirements in relation to municipal services

• Authority to impose taxes for municipal services?• Community Charter, s. 194

• Council may impose a fee payable in respect of a municipal service

• Authority to borrow?• Community Charter, Part 6, Division 3

• Municipality can enter into an agreement to borrow provided (1) liability is not a debenture debt and (2) municipality receives elector approval if the agreement exceeds five years

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Sources of Municipal Authority

• Municipality may occupy several different roles in procurement:• Public Owner• Regulator• Service Provider

• How can these simultaneous roles affect a procurement?• Unique procurement issues• Relationship with council and taxpayers• Conflicts of interest

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Unique Procurement Role

• In assessing simultaneous roles of municipality in procurement, consider the policy objectives:• Maximize value for taxpayers – scarcity of funding• Certainty and transparency – justify use of tax dollars• Provide support for economic activity

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Policy Objectives of Municipal Procurement

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Numerous sources of procurement law that may apply to municipalities

• Common law (Contract A framework)

• On public projects, legislation may also apply

• Bylaws, policies, manuals of municipality may be incorporated into Contract A

• Bid depository rules may be incorporated into Contract A

• Trade treaties – AIT, NWPTA – may apply depending on value of procurement• New NWPTA “bid protest mechanism” provides bidders a right to make

complaints directly against a municipality on the basis of a violation of the NWPTA procurement rules

• TPP/CETA – not yet in force but if ratified will apply to municipal procurement• Upcoming “Canadian Free Trade Agreement” – set to replace AIT – and

reportedly will include stronger dispute resolution provisions

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Law applicable to Municipalities

Thank you

Dentons Canada LLP

Stephen Coyle, Partner604-443-7148stephen.coyle@dentons.com

John Haythorne, Partner604-691-6456 John.haythorne@dentons.com

Karen Martin, Partner

604-691-6455karen.martin@dentons.com

Ryan R. Chalmers, Partner604-691-6432 ryan.chalmers@dentons.com