Treasury Board exceptional contracting limits

A Treasury Board exceptional contracting limit is a contracting authority that the Treasury Board approves for a specified department, program or class of procurement. It differs from the department's ordinary, or basic, contracting limit. It lets the designated contracting authority enter into or amend contracts up to the approved exceptional limit, subject to any conditions in the approval. The rules sit in the Treasury Board Secretariat's Directive on the Management of Procurement.

Treasury Board approval is generally required when the value of a contract or contractual arrangement exceeds the applicable limit. That value includes applicable taxes, fees and amendments. Exceptional limits exist for cases where special operational requirements cannot be met within basic limits. An audit published by Indigenous and Northern Affairs Canada describes exceptional contracting authority in exactly those terms. Older Government of Canada material also uses the expression Exceptional Contracting Limits Authority (ECLA).

How exceptional limits differ from basic limits

Basic contracting limits are the standard thresholds that apply to departments. An exceptional limit is a separate approval, tied to a particular program or type of procurement. It can be higher than the basic limit, and in some cases it has no dollar ceiling. The limit is not always the more generous one, however. Where an exceptional limit for a program is lower than the corresponding basic limit, the lower limit applies.

Exceptional limits are created for situations such as emergency procurement or defence acquisition, where ordinary departmental authorities are insufficient. The current schedules and Appendix A of the Directive set out the limits in force.

Defence Investment Agency limits

The Directive provides exceptional limits for the Defence Investment Agency. These limits apply only to procurements that directly support military acquisitions for the Canadian Armed Forces. For high-risk defence contracts and contractual arrangements, the Agency must first obtain Treasury Board approval of the procurement and negotiating strategy. That approval must come before solicitation or negotiations begin. Once the strategy is approved, the exceptional limit can apply for an unlimited dollar value, as set out in the Directive and a federal Question Period note.

Emergency-related exceptional limits

Treasury Board has also used exceptional limits to respond to emergencies. A 2023 contracting policy notice added an exceptional contracting limit for sustained emergencies of national importance. That limit is subject to approval and conditions set by the President of the Treasury Board. The notice describes these emergencies using concepts drawn from the Emergencies Act, and the Treasury Board policy notices identify exceptional limits for Shared Services Canada and Public Services and Procurement Canada in response to them.

The COVID-19 response produced earlier examples. Treasury Board converted a temporary $3-million emergency limit for the Public Health Agency of Canada, Health Canada and the National Research Council into an exceptional contracting limit for emergency contracts. A $500-million emergency limit for the Minister of Public Services and Procurement was converted in the same way. An unlimited exceptional limit also covered the development, acquisition and deployment of medical countermeasures. These conversions are recorded in Contracting Policy Notice 2021-5.

What exceptional limits mean for suppliers

The buyer's contracting authority must stay within the applicable basic or exceptional limit and meet any conditions attached to it. Suppliers generally do not apply for these limits. They may see special conditions in a solicitation or contract, and they must provide the information, pricing, approvals or delivery commitments the government needs to show compliance.

• Check whether a solicitation relies on an exceptional authority, such as a defence or emergency procurement.
• Expect contract amendments to be tested against the applicable limit, including taxes and fees.
• Read the conditions in the solicitation closely, since they come from the underlying Treasury Board approval.

For buyer-side detail, see the CanadaBuys guidance on contracting limits and exceptional authorities.