Ottawa’s Buy Canadian program has a very generous definition of what counts as Canadian.
Driving the news: The federal government has given more than 70% of its contracts under its new Buy Canadian procurement policy to foreign-owned companies, according to The Logic, more than half of which went to foreign pharma giants. Between December 2025 and June 2026, only four of the 14 contracts went to Canadian-headquartered companies.
To qualify, foreign companies only need to “actively operate” in Canada; they don’t need to be headquartered here, nor do they have to meet a local employee threshold.
Catch-up: Many of Canada’s international trade deals stipulate that once a government contract exceeds a certain dollar amount, it must be open to foreign companies too. That means, even if it wanted to, Ottawa isn’t really allowed to favour homegrown firms for major procurements.
There are some carve-outs: the feds can start to play favourites if the contract is below a certain dollar threshold, or for sensitive purchases that fall under the umbrella of national security.
Because of these limitations, only a fraction of the contracts handed out under the feds’ $37 billion procurement budget are eligible for the Buy Canadian program.
Why it matters: The scope of the Buy Canadian approach has its practical limits. Supporting domestic companies with government contracts is important, but protectionist policies can quickly freeze out foreign investment and spark retaliation from countries that argue we’re breaking our trade agreements.
Canada’s allies are already upset about the procurement policy (even if there aren’t actually that many contracts going to Canadian companies). The U.S., the EU, the U.K., Japan, Norway, New Zealand, and Switzerland have all raised concerns to the World Trade Organization.
Our take: The reality is that for a lot of major procurements (like a $100 billion fleet of submarines), the best, and sometimes only, option is outside of Canada.—LA
