Canada Strong: Budget 2025 includes funding to implement a Buy Canadian Policy that is intended to provide greater opportunities for Canadian companies to participate in the federal procurement process. The Buy Canadian Policy aims to spur on domestic demand and create potential domestic growth opportunities through the prioritization of Canadian suppliers in federal procurement contracts.
What is the Buy Canadian Policy?
The Federal Government has clearly indicated that it is moving from a “best efforts” approach to a clear obligation/requirement to buy Canadian. The Buy Canadian Policy will be extended to all federal agencies and Crown corporations with the goal of cutting the red tape and making it easier for Canadian businesses to access federal procurement opportunities. The Buy Canadian Policy takes active steps to ensure more federal spendings are used on Canadian products and talents. As Budget 2025 makes significant monetary investments in housing, infrastructure and modern defence, the Federal Government intends to secure more Canadian products, suppliers and workers throughout the federal procurement process.
Priorities of the Buy Canadian Policy
Budget 2025 notes that the Buy Canadian Policy specifically prioritizes supporting the Canadian steel and softwood sectors as well as small- and medium- sized businesses (SMEs). The Buy Canadian Policy plans to have a streamlined process for SMEs which will assist SMEs in navigating through the federal procurement system more easily.
Budget 2025 notes that the Buy Canadian Policy will specifically impact the:
- Major Projects Office, which includes federal projects in energy, trade, and transportation
- Build Canada Homes, which aims to expediate housing construction
- Defence Investment Agency, to assist building up modern defence industry in Canada
- Build Communities Strong Fund, that invests in infrastructure
Budget 2025 funding for the Buy Canadian Policy
Budget 2025 proposes to provide $98.2 million over five years, $9.8 million ongoing to Public Services and Procurement Canada and $7.7 million over three years to the Treasury Board Secretariat to support the implementation of the new Buy Canadian Policy.
In addition, Budget 2025 proposes to provide $79.9 million over five years to Innovation, Science and Economic Development Canada to support the new Small and Medium Business Procurement Program which is intended to help Canadian SMEs access federal procurement opportunities.
Foreign suppliers and the Buy Canadian Policy
Foreign suppliers outside of Canada may be able to rely on the Interim Policy on Reciprocal Procurement, which took effect on July 14, 2025, and is scheduled to be fully implemented by Spring 2026. This Interim Policy ensures that during the Federal Government procurement process the government will give fair treatment to foreign suppliers that come from countries that grant Canada the same fair, reciprocal treatment.
However, this Interim Policy will not apply if at least 51% of the contract’s estimated value is for goods and services in the modern defence industry.
The list of countries that are considered to be applicable trading partners can be found in the Canadian International Trade Tribunal Procurement Inquiry Regulations (SOR/93-602). There is a potential that this list may later be used to define “trusted trading partners” when sourcing domestically is not possible.
The Federal Government also plans to implement regulatory amendments to ensure the federal procurement process of the Buy Canadian Policy does not fall subject to review by the Canadian International Trade Tribunal.
For assistance navigating the federal procurement process and the Buy Canadian Policy, please reach out to the procurement team at MLT Aikins. We have extensive experience advising on major projects across Western Canada, as well as the federal procurement process.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.
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