Financial Administration Act (FAA)

The Financial Administration Act (FAA) is the Government of Canada statute that establishes the legal framework for the collection and expenditure of public funds. In procurement, it governs the authority to commit funds, enter into transactions, certify that goods or services were received, and make payments. The CanadaBuys Buyer's Portal identifies it as part of the legal framework for the contracting practices of Public Services and Procurement Canada (PSPC) and its client departments.

The Act is described as the cornerstone of the federal framework for financial management and accountability. It sets the fundamental rules for approving spending and making expenditures. It is Canadian federal legislation, not a procurement standard or a trade agreement, and it applies across the Government of Canada, including departments that use their own contracting authorities.

Sections 32, 33 and 34: the provisions buyers rely on

Several sections of the FAA shape how a federal contract is formed and paid. The CanadaBuys page on key acts and contract regulations summarizes the most relevant ones:

• Section 32: funds must be available before a contract involving payment is entered into.
• Section 33: a charge against an appropriation is made under the requisition of the responsible minister or a person that minister authorizes in writing.
• Section 34: an authorized official must certify that the goods or services were provided in accordance with the contract and that the amount charged is correct or, where the contract sets no price, reasonable.
• Sections 37 and 37.1: these address the lapse or continuing availability of appropriated funds.

Section 34 certification and the payment process

Section 34 is the provision suppliers meet most directly, because payment cannot proceed without it. The Canada Revenue Agency, in its audit of supplier contracts, describes it as requiring managers to verify that the work was performed, the goods or services were rendered, and the amounts charged agree with the contract price.

The same framework covers advance and progress payments. Where payment is required before the work is complete, the arrangement must be expressly provided for in the contract. The CRA also identifies standing offers, supply arrangements, contracts or purchase orders, and electronic procurement as vehicles subject to financial-management controls under the FAA.

Treasury Board limits and delegated contracting authority

Treasury Board sets the financial limits for contracting authorities under the FAA. These limits decide who may approve or enter into a contract and for what value. They appear in Appendix A, Contracting Approvals, of the Directive on the Management of Procurement, and the CanadaBuys overview of delegation of procurement authority explains how those limits apply to departments.

The FAA alongside the Government Contracts Regulations

The FAA does not work alone. It operates with the Government Contracts Regulations, Treasury Board policies and directives, and applicable trade agreements. Government sources, including PSPC's supplier conduct material, name compliance with the FAA, the Regulations and trade agreements as part of the framework that supports fairness, openness and transparency in federal procurement.

What the FAA means for a supplier

A supplier does not register under the FAA or file an FAA form. The Act still affects every federal contract you hold. Funds must be committed before the contract is signed, so a valid contract reflects an authorized commitment. Any advance or progress payment you expect must be written into the contract. To be paid, you need to meet the delivery, performance, invoicing and pricing terms, because the government's authorized official must be able to complete the section 34 certification. Invoice in line with the contract price, and keep records that show the work was done as specified.