In this bulletin, we provide a refresh of our consolidated table of trade agreement thresholds for 2025 (no change from 2024) and review the implications for government procurement of four of the Executive Orders signed by President Trump on his first days in office.
No New Trade Agreement Thresholds
Financial thresholds have not changed for government procurement coverage under Canada’s international, national and sub-national trade agreements. The current thresholds – which are effective from January 1, 2024, until December 31, 2025 – are consolidated in this downloadable PDF document (PDF, 138 Ko).
The Trump Administration’s Trade Policy Agenda: Reviewing CUSMA, WTO AGP and other trade agreements
As Executive Orders continue to be signed and released by President Trump, the specifics of the new U.S. Administration’s trade policy agenda are coming into focus. In particular, the United States Trade Representative (USTR) has received an updated mandate relating to the Canada-United States-Mexico Agreement (CUSMA), the World Trade Organization Agreement on Government Procurement (WTO AGP) and review of trade agreements generally.
Section 2 of the Executive Order, America First Trade Policy (AFTP) (signed in January 20, 2025), entitled “Addressing Unfair and Unbalanced Trade”, identifies that a public consultation process on CUSMA will commence in preparation for the scheduled review of the agreement by the parties in July 2026. Additionally, the USTR will assess the impact of CUSMA on domestic workers, farmers and businesses, and make recommendations regarding the United States’ participation in the agreement.
This Executive Order will begin a review led by the USTR of CUSMA and other existing U.S. trade agreements and sectoral trade agreements, intended to result in recommendations for revisions necessary or appropriate to achieve or maintain “reciprocal and mutually advantageous concessions” in trade agreements with partner countries and, in the case of CUSMA, recommendations regarding the ongoing participation of the U.S. in the agreement.
The USTR will also review the impact of all trade agreements (including the WTO AGP) and recommendations will be made to ensure that agreements favour domestic workers and manufacturers in the U.S. over those in other countries.
Since CUSMA replaced NAFTA on July 1, 2020, Canada and the U.S. have agreed to maintain access to each other’s procurement markets via the WTO AGP, in lieu of including bilateral government procurement commitments in CUSMA. While it is too early to predict the outcome of the USTR’s trade agreements review, this could have significant implications for the future access of Canadian businesses to U.S. government procurement opportunities.
The Trump Administration’s Directive to Terminate DEI Initiatives: Implications for U.S. Government Contractors
Federal departments and agencies in the U.S. have been mandated to implement a directive to terminate all contracts and grants related to Diversity, Equity and Inclusion (DEI) programs and all DEI performance requirements for employees, contractors or grant funding recipients pursuant to the Trump Administration’s Executive Order “Ending Radical and Wasteful Government DEI Programs and Preferencing (signed on January 20, 2025).
Federal agencies are mandated in Executive Order “Ending Illegal Discrimination And Restoring Merit-Based Opportunity” (signed the very next day, January 21, 2025) to include in every contract or grant award (i) certification from the contractor or grant recipient that they do not operate DEI programs that violate “applicable federal anti-discrimination laws” and (ii) agreement that compliance with such laws is a material term of their contract (or grant award) to receive payment.
What is unknown is how this unprecedented push back against DEI initiatives might impact federal government suppliers to both the Canadian and US governments, who must comply with the very different (and now contradictory) DEI policies of each government. Particularly, how do these suppliers manage compliance with Canadian government DEI policies if their compliance could render them non-compliant with these Executive Orders, potentially triggering including the US government’s rights to withhold payments under the False Claims Act.
Canada Considering Non-Tariff Measures in Response to Pending U.S. Tariffs
The Trump Administration’s Executive Order “Imposing Duties to Address the Flow of Illicit Drugs across our Northern Border” (signed on February 1, 2025) imposes a 25% tariff on virtually all goods from Canada and a 10% tariff on Canadian energy products. The tariffs were set to take effect on February 3, 2025, but have been “paused” for up to 30 days while Canadian and U.S. governments engage in further discussions.
As a result of the pending tariffs, the Canadian government and various provincial and territorial governments have announced they are considering excluding or limiting procurement access for American goods and services. Some have also begun directing their procuring officials to investigate the termination of U.S. supplier contracts.
Navigating these issues and considerations will require knowledgeable legal advisors.
For more information or to discuss a particular matter please contact the authors.
Fasken’s Government Relations and Political Law group is dedicated to providing in-depth analysis and strategic guidance on critical issues impacting the Canada-U.S. relationship. With extensive experience navigating complex political, regulatory, and trade matters, our team helps clients stay ahead of developments in areas such as tariffs, taxation, cross-border M&A, military procurement, and more. We offer insightful legal and strategic advisory services to government entities, businesses, and in-house counsel, delivering the expertise needed to successfully navigate the evolving political landscape. To explore our resources and learn more, please visit our Canada-Trump Administration 2.0 landing page.
The authors gratefully acknowledge the contribution of Riley Mintz, Articling Student.
