The federal government's new Buy Canadian Policy officially came into effect yesterday, as Ottawa looks to turn grocery aisle sloganeering into a concrete national investment strategy.
What happened: The first phase of the policy — meant to boost domestic procurement for federal agencies, including for defence and the new major projects office — makes it so contracts valued at $25 million or more must prioritize Canadian companies and materials.
It also requires construction and defence projects to use Canadian steel, aluminum, and wood — three commodities that have been hit particularly hard by U.S. tariffs.
Why it matters: The feds are Canada’s single-largest buyer of goods and services, filling their shopping cart with $37 billion worth of purchases annually. Ambitious new initiatives are sure to drive that number up even further, with this new policy keeping more dollars at home.
It’s also another way to do a bit of uncoupling from U.S. industry, as U.S. suppliers win an estimated ~10% of the value of all Canadian federal procurement contracts.
Yes, but: The policy promises to lift up only companies with “a real footprint in Canada,” but some critics feel that a stricter definition is needed to prevent foreign multinationals from taking advantage.
Plus, there’s a spot of worry the policy could violate international trade deals (though the feds say that’s a non-issue) and drive up procurement costs.
What’s next: The policy expands next year, covering all contracts valued at $5 million or more and launching a new procurement program aimed at small and medium-sized businesses.—QH
