Floating plant clause
The Floating Plant Clause (FPC) is a Government of Canada requirement that must be satisfied when responding to Federal Work requiring dredging services. The FPC only applies to federal government contracts and is not a requirement for Provincial government or private sector contracts in Canada.
General Guidelines for Certificate of Qualification:
In order for Innovation, Science and Economic Development Canada to provide a certificate of qualification for equipment not made or manufactured in Canada, the applicant must demonstrate that the equipment:
- is registered in Canada as of the time an application is presented for consideration;
- has been Canadian owned for at least one year as evidenced by Canadian Customs or other such documents, and;
- has been substantially modified in Canada to the extent that it is predominately Canadian equipment (including add-on value).
Note: When these requirements conflict with a provision of a trade agreement, the provisions of the trade agreement will apply.
To be deemed as predominantly Canadian means that modifications to the equipment in question were made using Canadian content that represent at least 50% of the value of the equipment after modification. In this context, modifications are defined as improvements to the equipment.
Modifications do not include:
- repairs which bring the equipment to its original state or condition; and
- maintenance to keep the equipment operational.
For example, the customs declarations which were required to import the equipment can be used to determine the value of the equipment, prior to modifications, since they contain a reasonable estimate of the value of the equipment. Duties and taxes paid upon entry of the equipment into the country are not considered to be a part of the value of the equipment. However, domestic taxes (e.g. GST/PST/HST) paid on any modifications to the equipment are eligible as part of the cost of modification.
For projects where a number of units are used either in tandem or in succession, each component (i.e. tugs, barges, dredgers, etc.) will be qualified on its own merit and must meet the Canadian content conditions.
Documentation to provide to Innovation, Science and Economic Development Canada:
In order to assess the domestic value-added content of foreign dredging equipment, the following documents are usually provided:
- the importation documents to establish the value when imported; and
- the records of all the modifications made to the vessel (e.g. invoices for materials or contracted work and the labour records showing the work done on the dredging equipment). As previously noted, repairs and maintenance are not eligible.
Canada-European Union Comprehensive Economic and Trade Agreement
Canada has aligned the federal procurement policy that governs how it procures dredging services or dredging services included in construction services contracts with the negotiated outcome of CETA. Please visit Transport Canada’s Coasting trade in Canada website for more information on negotiated CETA outcomes related to dredging services
ISED’s certificate of qualification process (with CETA consideration):
- Below the Government Procurement threshold for construction services in the agreement, there are no changes to the certification guidelines and requirements indicated above.
- At or above the Government Procurement threshold for construction services in CETA:
- You do not require a certificate of qualification from ISED if the equipment is of Canadian or EU make or manufacture.
- Otherwise, for non-Canadian or EU manufactured equipment, you can obtain a certificate of qualification if:
- the vessel used is registered:
- in Canada or
- an EU Member State and have been granted a temporary licence under the Coasting Trade Act.;
- has been predominantly modified in Canada or the EU; and
- has been owned by a person located in Canada or the EU for at least a year before the bidder submitted the tender.
- the vessel used is registered:
Please visit Transport Canada’s Coasting trade in Canada website for more information on negotiated CETA outcomes related to dredging services.
Questions & Answers
1. If my equipment is built in Canada, do I require a certificate of qualification?
No, if your equipment is registered in Canada and built in Canada, you do not require a certificate of qualification from Innovation, Science and Economic Development Canada. You may wish to attach the Transport Canada Vessel Registration information to your bid response.
Note that if a number of units are used in tandem or in succession for this project, each component (i.e. tugs, barges, dredgers, etc.) must meet the Floating Plant Clause requirements.
2. Do I require a certificate of qualification If my equipment is built in the European Union?
At or above the Government Procurement threshold for construction services of the CETA, you do not require a certificate of qualification from ISED if the equipment is of Canadian or EU make or manufacture.
3. Can I submit a request for a certificate of qualification now for future contract opportunities?
Yes, you can submit a request at any time. Your certificate of qualification can be applicable to future federal government contract opportunities.
Should you have any other questions regarding Innovation, Science and Economic Development Canada's certificate of qualification or if you require assistance to certify dredging equipment, please contact us.
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