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By McInnes Cooper<\/span><\/span><\/p>\n While most construction contracts address taxes and tariffs, the current political climate respecting tariffs can impact both existing contracts and the future of procurement. Here\u2019s how.<\/span><\/p>\n Existing Contracts<\/b><\/span><\/p>\n Using the CCDC2 2020 as a guide, these areas can be impacted in a tariff war:<\/span><\/p>\n GC 3.4 \u2013 Construction Schedule.<\/b>\u00a0The construction schedule could be affected where tariff issues force the contractor to resort to another supplier and the alternate supply is not immediately available.<\/span><\/span><\/p>\n GC 6.3 \u2013 Change Directive.<\/b>\u00a0A change pursuant to a change directive is limited to a list of cost items, including \u201ctaxes and duties other than value added taxes\u201d (GC 6.3.7.14). This could trigger a contractor to seek a change in the price due to a tariff change.<\/span><\/span><\/p>\n GC 6.5 \u2013 Delays.<\/b>\u00a0Delay issues can affect the construction schedule when disputes arise due to debates over tariffs, particularly when the impact on the contract price is high. Owners will want to tighten up the contract to exclude tax\/tariff issues as a reason for a delay claim.<\/span><\/span><\/p>\n GC 6.6 \u2013 Claim for Change in Contract Price.<\/b>\u00a0This provision permits the contractor to seek a change in price for any reason that is beyond the contractor\u2019s control (GC 6.5.3.4). It may result in a dispute resolution under GC 8.3.<\/span><\/span><\/p>\n GC 10.1 \u2013 Taxes and Duties.<\/b>\u00a0This clause has frequently been deleted from contracts through the supplementary general conditions: \u201cAny increase or decrease in the costs to the Contractor due to changes in taxes and duties after the time of the bid closing shall increase or decrease Contract Price accordingly.\u201d<\/span><\/span><\/p>\n GC 10.2 \u2013 Laws, Notices, Permits, and Fees.<\/b>\u00a0In particular, clause GC 10.2.7 provides that when there is a change in laws, the contractor can seek a change in the contract price.<\/span><\/span><\/p>\n In addition, the requirement for notice under many clauses of the contract will require strict and timely compliance to ensure the impact is addressed. The frequent back and forth on tariffs will necessitate vigilance on notice provisions to ensure issues are identified and addressed.<\/span><\/p>\n Finally, many of the standard form contracts do not make provision for a frustrating event that could bring about the ability of either party to seek to terminate the contract. The event that creates the frustration must not have been reasonably foreseeable and must directly impact a material aspect of the contract.<\/span><\/p>\n Careful reading of contract terms is essential. Equally essential will be the drafting of supplementary general conditions to address any of the above issues.<\/span><\/p>\n Future Procurement<\/b><\/span><\/p>\n In future, owners will need to ensure that the front-end documents are reflective of an era of turbulence in the tariff world. You may need to carefully examine the following elements in a procurement:<\/span><\/p>\n Bidders.<\/b>\u00a0Whether to include preference provisions to exclude or prefer bidders, e.g., Canadian only.<\/span><\/span><\/p>\n Trade Agreements.<\/b>\u00a0Have regard for any applicable internal or international trade agreements.<\/span><\/span><\/p>\n Required Information.<\/b>\u00a0Ensure that the information required covers issues that would be pertinent in addressing tariff fluctuations. This would also be part of the evaluation matrix.<\/span><\/span><\/p>\n Qualification Criteria.<\/b>\u00a0Establish qualification criteria to address issues that have an impact on tariffs.<\/span><\/span><\/p>\n This article is information only; it is not legal advice. McInnes Cooper excludes all liability for anything contained in or any use of this article. \u00a9 McInnes Cooper, 2025.\u00a0All rights reserved.\u00a0<\/span><\/em><\/p>\n [\/et_pb_text][et_pb_image src=\u00a0\u00bbhttps:\/\/umnb.ca\/wp-content\/uploads\/2024\/07\/New-McInnes-Cooper-Logo-CMYK.jpg\u00a0\u00bb title_text=\u00a0\u00bbNew McInnes Cooper Logo CMYK\u00a0\u00bb _builder_version=\u00a0\u00bb4.20.2″ _module_preset=\u00a0\u00bbdefault\u00a0\u00bb global_colors_info=\u00a0\u00bb{}\u00a0\u00bb][\/et_pb_image][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" By McInnes Cooper While most construction contracts address taxes and tariffs, the current political climate respecting tariffs can impact both existing contracts and the future of procurement. Here\u2019s how. Existing Contracts Using the CCDC2 2020 as a guide, these areas can be impacted in a tariff war: GC 3.4 \u2013 Construction Schedule.\u00a0The construction schedule could […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[2,22],"tags":[],"class_list":["post-13143","post","type-post","status-publish","format-standard","hentry","category-non-classifiee","category-partner-article-fr"],"_links":{"self":[{"href":"https:\/\/umnb.ca\/fr\/wp-json\/wp\/v2\/posts\/13143\/"}],"collection":[{"href":"https:\/\/umnb.ca\/fr\/wp-json\/wp\/v2\/posts\/"}],"about":[{"href":"https:\/\/umnb.ca\/fr\/wp-json\/wp\/v2\/types\/post\/"}],"author":[{"embeddable":true,"href":"https:\/\/umnb.ca\/fr\/wp-json\/wp\/v2\/users\/2\/"}],"replies":[{"embeddable":true,"href":"https:\/\/umnb.ca\/fr\/wp-json\/wp\/v2\/comments\/?post=13143"}],"version-history":[{"count":3,"href":"https:\/\/umnb.ca\/fr\/wp-json\/wp\/v2\/posts\/13143\/revisions\/"}],"predecessor-version":[{"id":13316,"href":"https:\/\/umnb.ca\/fr\/wp-json\/wp\/v2\/posts\/13143\/revisions\/13316\/"}],"wp:attachment":[{"href":"https:\/\/umnb.ca\/fr\/wp-json\/wp\/v2\/media\/?parent=13143"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/umnb.ca\/fr\/wp-json\/wp\/v2\/categories\/?post=13143"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/umnb.ca\/fr\/wp-json\/wp\/v2\/tags\/?post=13143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}