Construction Contract Tariff Relief Measures

Dear Industry Partners,

To help manage uncertainty around tariffs, the Government of Alberta has agreed to include tariff relief measures in new and existing multi-year construction contracts. The following principles help inform our operationalization of these measures:

1. the purpose of relief is to address uncertainty and potential risk related to retaliatory tariffs enacted by the Government of Canada on certain goods imported to Canada from the United States of America;
2. contractors will be required to quantify any claims on a case-by-case basis, providing verifiable documentation to substantiate the tariff costs they incur;
3. contractors must consider the materiality of tariff costs in triggering the relief process;
4. relief measures will consider direct tariff impacts only and will not consider indirect tariffs, general inflation, exchange rate changes, or supply chain impacts;
5. relief will be net of relief provided by other orders of government or existing contractual provisions. The Province will have the ability to seek reimbursement for any relief paid by other orders of government subsequent to processing a claim under the contract;
6. contractors will be expected to make efforts to limit tariff impacts by seeking out alternative sources of supply. Infrastructure will decide on whether to accept any proposed alternatives given there may be scheduling and/or cost impacts; and
   1. Alternatives that negatively impact safety or asset performance will not be accepted.
7. if the Government of Canada removes or reduces tariffs, contractors will be required to repay the difference to the Province.

Going forward, applicable tenders and multi-year construction contracts will include language that is reflective of the above principles. Likewise, existing multi-year construction contracts are being reviewed for possible inclusion of the tariff relief measures.

I appreciate your commitment to Alberta’s public infrastructure. I look forward to working with you and will keep you informed of any updates on this matter.

Mark Kleefeld

Deputy Minister

Classification: Protected A