CANADIAN FREE TRADE AGREEMENT Consolidated Version 2017

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56 Annex 504.4: Inflation Adjustment 1. Pursuant to Article 504.4, the thresholds for covered procurement will be adjusted for inflation in accordance with the following: (a) (b) (c) the applicable inflation rate will be determined by reference to the latest Industrial Product Price Index (“IPPI”) series published by Statistics Canada; the first adjustment, to take effect on January 1, 2018, will be calculated using the IPPI values for the August 2015 and August 2017 reference periods; subsequent adjustments will take effect on January 1 every two years after January 1, 2018; and (d) the adjusted threshold will be rounded to the nearest $100. 2. The adjustment will be calculated using the following formula: T c × ( 1 + p ) = T n , where: T c = Current threshold; p = Percentage increase in prices for the applicable two-year period, determined by the following formula: p = A − 1, where: B A = the IPPI value for the August reference period of the year directly before the one in which the adjustment takes effect; and B = the IPPI value for the August reference period two years before the August reference period in A; and T n = New adjusted threshold. 3. The Secretariat shall notify the Parties of the adjusted threshold values no later than November 1 of the year prior to the adjustment taking effect.

57 Annex 520.1: Party-Specific Exceptions Schedule of Canada Procurement Exceptions For Canada, the following is not covered by this Chapter: A. Excluded Entities The following entities are not covered by this Chapter: 1. Canadian Security Intelligence Service; 2. Communications Security Establishment; 3. Financial Transactions and Reports Analysis Centre of Canada; 4. Bank of Canada; 5. Canada Pension Plan Investment Board and its subsidiaries; 6. Public Sector Pension Investment Board and its subsidiaries; 7. Senate; 8. House of Commons; 9. Library of Parliament; 10. Office of the Senate Ethics Officer; 11. Office of the Conflict of Interest and Ethics Commissioner; and 12. Parliamentary Protective Service. B. Exceptions and Notes 1. This Chapter does not apply to procurement: (a) (b) by a shared-governance corporation, joint enterprise, mixed enterprise, international organization, and any entity that is not wholly-owned by the Government of Canada. For greater certainty, a shared-governance corporation includes any entity where appointments to the board of directors are not made exclusively by the Government of Canada; by commissions under the Inquiries Act, RSC 1985, c I-11, as amended;