What are the legal implications, if any, of federal departments partnering with a private sector firm?
It is wise to be cautious about partnering with private sector firms. The legal implications relate to possible liabilities. Provincial laws govern partnerships involving private sector firms. In that context, a partnership means “…to be legally bound by the acts of partners and legally liable for partnership debts, on the basis that what one partner does is done as an agent for the other.” The Department of Justice has advised that some partnerships could lead to violations of the Financial Administration Act if the government is held liable for amounts exceeding approved parliamentary appropriations. This risk can be reduced by ensuring that agreements explicitly document the mechanisms and conditions under which losses would be shared or guaranteed, and by capping maximum federal exposure in line with approved program/project authorities.
