This article is an excerpt from Government Procurement, which is available for purchase.
In its May 2012 decision in Hervé Pomerleau Ontario Inc. v. Ottawa (City), the Ontario Superior Court of Justice rejected the City of Ottawa’s summary defence application after finding that the low bidder had been improperly rejected as non-compliant. The case dealt with the interpretation of the Fairness is a Two-Way Street (Construction Labour Mobility) Act which, at the relevant time, prohibited Quebec contractors from bidding on Ontario projects. The rejected low bidder had established an Ontario office but the City determined that this was a sham and that the contractor was really a Quebec bidder and was therefore barred from bidding by the statute. The court disagreed, finding that the bidder had relocated and could legitimately be considered an eligible Ontario contractor even though it continued to also operate in Quebec:
In my view, it is irrelevant the Francis Pomerleau and his brother Pierre are equal shareholders in both companies or that Pomerleau Ontario listed projects from Pomerleau Inc. in its statement of experience. When he was examined on this point, Francis Pomerleau pointed out that the Ontario company had by that time completed two projects in Ottawa in 2002: the Royal Ottawa Hospital and the Aviation Museum.
The Act did not require a Quebec company seeking to comply with the legislation to abandon any assets or resources it may have held in another province, nor did it require companies that bid on projects to erase its history of completed projects prior to relocating to Ontario. Such an interpretation would have effectively blocked Quebec companies from bidding on any projects after relocating to Ontario.
In my view, the legislation was prospective in nature and it invited Quebec companies to do business in Ontario. I agree with the City that the simple act of establishing a head office in Ontario was not enough. In this case, Pomerleau Ontario has effectively relocated to Ontario by not only establishing a corporate office in Ontario but by continuing to expand its operations in this province. Pomerleau Ontario is exempt from the restrictions of the Act. The City’s motion for summary judgment is dismissed. (paras. 56-58)
This case illustrates the practical obstacles that can impede the effective implementation of a geographically based bidder barring protocol and also underscores the risks inherent in assessing complex threshold eligibility considerations during a bidding process. In this instance, the contract award decision turned on the nebulous consideration of whether a company that had originated in Quebec had a sufficient nexus to Ontario to now be considered an Ontario company. As with other threshold considerations, such matter are better assessed by way of general prequalification processes, rather than on a case-by-case basis when contract awards, and legal liabilities, turn on the real-time assessment of complex factual issues.
