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On April 1, 2026, the Act respecting contracting by municipal bodies (the “Act”) of Quebec, which was enacted on March 25, 2025, came into effect, along with its regulations.
Overview of the LCOM
The purpose of the Act is to govern – within a single law – the awarding and management of contracts by municipal bodies. It aims to promote competition, integrity, and transparency in public procurement, as well as sound public fund management. It also seeks to consolidate and simplify the regulations surrounding the awarding of contracts by these bodies.
The main municipal bodies covered by the Act are:
- Municipalities;
- Metropolitan communities;
- Intermunicipal boards;
- Public transit authorities;
- Certain bodies constituted under the Cities and Towns Act or the Municipal Code of Québec.
The Act now requires municipal bodies to adopt a contract management by-law that must be published on their website.
The Requirement to Obtain Authorization to Contract
The Act is inspired by the Act respecting contracting by public bodies and refers to it on certain subjects, notably regarding integrity obligations for companies. Consequently, a business wishing to contract or subcontract with a municipal body must obtain authorization to contract, as provided by the Act respecting contracting by public bodies.
Clearer Contract Awarding Procedures
The Act establishes a clear framework based on the value of the contract and the nature of the procurement requirements.
Depending on the amount of the expenditure, a contract must be awarded:
- By open procedure when the regulatory threshold is reached;
- By written invitation or by mutual agreement, in certain cases defined by the Act and its regulations.
The Act also provides that the municipal body must conduct a serious evaluation of its procurement requirements before initiating a contract-awarding process. This evaluation by the municipal body must be documented when the contract involves an expenditure of $25,000 or more. It is also prohibited to divide the object of a contract in order to award several similar contracts, except in certain cases.
It also gives municipal bodies broad authority regarding the limitations that may be included in tender documents.
Standardization of Reasons for Rejecting a Bid
The Act also provides for the standardization of the reasons which, when set out in the tender documents, justify the rejection of a bid during a call for tenders. A municipal body may reject a tender if, in the two years preceding the date of receipt of bids, the business has:
- Been subject to an unsatisfactory performance assessment in connection with a contract awarded by the municipal body;
- Failed to follow up on a tender or contract; or
- Had a contract cancelled for failure to comply with its conditions.
A rejection mechanism is also provided for in the case of an abnormally low tender, following a procedure established by the Act.
Entry into Force of Regulations Related to the Act
Several regulations came into force at the same time as the Act on April 1, 2026, and set out the following:
- Awarding of certain contracts of municipal bodies by written invitation or by mutual agreement;
- Discrimination on the basis of territory applicable to certain contracts of municipal bodies involving an expenditure equal to or greater than $20,000,000;
- Authorized discrimination on the basis of territory in the awarding of certain contracts of municipal bodies or in a certification or qualification process;
- Threshold and deadlines applicable to the awarding of certain contracts of municipal bodies.
These regulations implement the Act and its contract-awarding mechanisms. They also provide for authorized discriminatory measures in certain cases in favour of businesses, depending on their location and the type of contract1.
Legislative Amendments to the Act respecting contracting by public bodies
On April 2, 2026, an act to reduce bureaucracy, increase state efficiency, and strengthen the accountability of senior officials was enacted. The latter amends the Act respecting contracting by public bodies, notably by repealing the five-year validity period of an authorization and no longer providing for a validity period. This change will reduce the administrative burden on businesses, although they will still be required to carry out an annual update, failing which their authorization may be suspended or even revoked.
This law also removes the obligation for the Autorités des marchés publics to include, in its notice, information it already holds that could show the applicant company does not meet integrity requirements—information that was previously communicated to allow the company to present its observations.
Footnote
1 The regulation amending the Regulation to impose conditions for the awarding of certain supply contracts by municipal bodies extends its provisions until March 2027 and came into effect on April 1, 2026, so that certain American companies will continue to receive penalties on certain bids.
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