bidder debarring represented by a group of wooden dolls kicking one out of their group

Whether it’s dealing with a poorly performing, unethical or difficult supplier, at some point in a procurement professional’s career the question is sure to come up: can we exclude this supplier from future contracts?

In Part One of this article we examine the ground rules laid down by the courts around when debarment is appropriate, as well as the scope and application of such a process under various Canadian integrity regimes. In Part Two, which will be published July 22, 2020 (sign up for The Legal Edge newsletter here), we delve into strategies and techniques you can use to ensure that any bidder barring practices are transparent and fully defensible.

Barring a bidder from government contracts can become politically and legally charged, so it’s not a decision to be made lightly. Consider the 2019 SNC Lavalin scandal for example. In 2015, SNC Lavalin officials had been criminally charged in Canada for bribing Libyan officials. If convicted of criminal charges, SNC faced an automatic 10-year ban on federal government contracts. In addition to having a major business impact, losing federal government business for 10 years could have threatened the livelihood of the 9,000 plus SNC employees. It’s no wonder SNC pulled out all the stops – lobbying and pressuring government, and mounting an aggressive legal defense strategy, that, as we now know, exploded into 2019’s biggest political scandal.

In light of the business impacts associated with barring a bidder and the strong possibility that the government entity may be challenged both legally and politically, procuring entities should do all they can to ensure debarring decisions are fair and defensible.

Grounds for Debarring

International trade agreements, including the Canada-EU trade agreement and the Canadian Free Trade Agreement, permit barring of bidders for reasons such as:

  • bankruptcy or insolvency;
  • false declarations;
  • significant or persistent deficiencies in performance of any substantive requirement or obligation under a prior contract or contracts;
  • final judgments in respect of serious crimes or other serious offences;
  • professional misconduct or acts or omissions that adversely reflect on the commercial integrity of the supplier; or
  • failure to pay taxes.

Canadian courts have also recognized that bidders can be barred if engaged in litigation against the procuring entity. This applies whether (a) the entity is claiming against the bidder, or (b) the bidder claiming against the procuring entity.

The language of the trade agreements is non-exhaustive which means the door is always open to add new grounds for debarment. Canadian courts have said that, as long as a debarment is based on a good faith reason related to protecting the public interest, which includes avoiding unnecessary costs and resources associated with managing a problematic or unethical supplier, the courts will uphold a debarment.

The courts, on the other hand, have made it clear that they will not uphold a debarment if the evidence shows a debarment decision was arbitrary or punitive.

Length of Debarment

Debarments can be in effect for many years and can apply to offences or actions reaching back several years. For example, under the Federal government integrity regime’s Ineligibility and Suspension Policy, a criminal conviction in the previous 3 years can carry with it an automatic 10-year debarment. Under Quebec’s and New-Brunswick’s integrity regimes, the maximum period is 5 years.

For jurisdictions without policy guidance, one would need to look to court decisions for guidance. There we see that, for debarments of litigious bidders, courts have accepted debarments that continue for 4-5 years past the end of a litigation.

Scope of Application of Debarment

Debarment regimes can extend to any individual involved in the business’ decision. For example, from s.28 of the Quebec Act Respecting Contracting by Public Bodies: “the integrity of an enterprise and that of its directors, partners, officers and shareholders as well as that of other persons or entities that have direct or indirect legal or de facto control over the enterprise may be examined.”

The federal government and New-Brunswick regimes aren’t as explicit on this point but, in practice, the acts of a corporation would always be attributed to a controlling decision-maker which would likely be covered by any ban.

The idea around extending the examination, and a debarment, to individuals or controlling decision makers is to eliminate the possibility that an owner can simply close the debarred entity and reopen a new business eligible to bid on contracts again.


As the SNC Lavalin case has shown us, supplier debarment decisions can become a battlefield of politics and public interest. To avoid leaving public interest a casualty in this fight, procuring entities should do everything possible to prepare to win. In Part Two of this article, we’ll help you do that by examining how to set up an effective debarring regime.

Part Two will be published July 22, 2020. If you’re not already signed up for The Legal Edge newsletter, please sign up by clicking here to be notified as soon as Part Two is published.


Lise Patry, an instructor with NECI, is a lawyer and former business executive with a strong background in technology and more than 20 years of business and legal experience in the public and private sectors. As principal of LXM Law, in addition to general law, she offers virtual counsel services and specialized expertise in contracts, licensing, government procurement and corporate governance. She can be reached in Ottawa at (613) 601-6333 or

Lise Patry

BA | Sc | LLB | ICD.D | NECI Instructor| LXM Law

Readers are cautioned not to rely upon this article as legal advice nor as an exhaustive discussion of the topic or case.  For any particular legal problem, seek advice directly from your lawyer or in-house counsel.  All dates, contact information and website addresses were current at the time of original publication.