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Public Works and Government Services Minister Diane Finley said she has no intention of shelving the government’s “integrity framework” while it explores possible amendments to the rules, which block Canada from doing business with companies convicted of crimes anywhere in the world.Blair Gable/The Globe and Mail

A coalition of major business groups wants Ottawa to immediately suspend its tough anti-corruption regime, warning of spreading economic damage as major government suppliers fall afoul of the new rules.

But Public Works and Government Services Minister Diane Finley said she has no intention of shelving the government's "integrity framework" while it explores possible amendments to the rules, which block Canada from doing business with companies convicted of crimes anywhere in the world.

The rules are already causing significant harm to the economy and should be put aside, a trio of industry associations warned in a letter sent Tuesday to Ms. Finley.

"While some contracts have already been lost, prospective suppliers are faced with uncertainty in making bidding decisions on government procurement," said the letter, signed by heads of the Canadian Manufacturers & Exporters, the Canadian Council of Chief Executives and the Information Technology Association of Canada.

"The uncertainty is impacting the efficacy of the bidding process, undermining competition, driving up costs for the government, and for suppliers it is costing jobs across the country."

The letter pointed out that "day-to-day investment decisions" are being affected.

However, the government said it wants to name an independent third party expert before proceeding to ensure "discussions are balanced, with a clear focus on integrity, rather than profitability," said Amber Irwin, a spokeswoman for the minister.

"The consultations will be expedient and the integrity framework will stay in place while they are carried out," Ms. Irwin added.

A clutch of companies, including Siemens AG and Hewlett-Packard Co., are facing bans from doing business with the federal government for up to 10 years because of crimes committed overseas.

An HP affiliate was convicted in the U.S. last year of bribing Russian officials to win contracts, triggering a review of hundreds of millions of dollars worth of contracts here in Canada.

Public Works officials are working on changes to placate critics, but the letter noted that planned consultations with industry groups haven't begun yet.

If changes require legislation, the government will have to act quickly so they come before Parliament breaks for the federal election, expected in October, pointed out Jayson Myers, president and chief executive of the Canadian Manufacturers & Exporters.

Meanwhile, the Canadian chapter of Transparency International has added its voice to those calling for changes to the framework, which was toughened up last year.

The group, a leading international voice on anti-corruption efforts, said disqualifying suppliers is an appropriate sanction, but the Canadian rules are far too rigid and broad, going well beyond what most other countries do, according to a separate letter sent to Ms. Finley Tuesday.

"We want something that is effective, legally enforceable and transparent," TI-Canada president Peter Dent said in an interview.

Debarring companies is an effective deterrent, but the government should also offer companies relief for good behaviour and a process to appeal, TI-Canada said. "[The framework] must be consistent with the rule of law and basic standards of procedural fairness," said the letter.

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