Maureen SullivanA MESSAGE FROM THE PRESIDENT
As many of you know, for the last few months I have been on the hunt to uncover the anticipated conversion rate for SDRs under the pending CETA. I have tapped into many senior procurement practitioners, executives, procurement lawyers and several of the provincial trade directorates – thank you all for your helpful comments and suggestions. Given the rather shocking lack of information on this, I thought I would provide update on my search for our subscribers.
Most of CETA will come into effect once approved by the Canadian and EU parliaments. Originally targeted for July 1, the new anticipated date for provisional application is September 21, as announced on July 8th. There are a lot of moving parts to this comprehensive trade agreement, and it is important that the appropriate regulatory and legislative steps are taken prior to full implementation. There appears to be no doubt, however, that the agreement is headed our way. Unlike other international trade agreements, CETA will push rigorous transparency and openness obligations right down to the municipal level, and will require many organizations to review, shore up and augment their procurement policies and documents to ensure compliance.
The thresholds at which procuring entities are required to adhere to the CETA requirements are necessarily quite high, and are stated in Special Drawing Rights (SDRs), an international type of monetary reserve used by the International Monetary Funds. For example, for construction procurement under the CETA the threshold is 5 Million SDRs. But what does this mean for Canadian organizations trying to set Canadian dollar thresholds within policies?
After much searching and many, many conversations with specialists, the only definitive statement I could find was that “ the actual conversion rates for CETA are determined by Global Affairs Canada, and once CETA is in effect, the thresholds should be reflected on the federal government’s Trade Agreements: Thresholds Update webpage”. Great, but again – how does this help us get our policies and documents in order prior to the date the trigger is pulled?
Other international agreements set currency conversion at regular intervals. This makes sense, as it would be chaotic if every procuring entity had to do the math based on daily conversion rates for every procurement document issued. In order to avoid having different conversion rates under different agreements, it makes sense that the conversion under the CETA will follow the WTO-GPA conversion rates, which are updated every two years.
We have now had that confirmed as the approach that will be taken.
The following table, currently embedded in our updated PSPP material, outlines the conversion from SDRs to Canadian dollars using this rate (which will be updated the end of 2017).
I will take off my Sherlock Holmes hat now, and again, thank you all for your assistance.