Figuring out how to buy Canadian at the grocery store is hard enough. For the federal government, it’s proving to be an even taller order.
What happened: According to a Toronto Star investigation, nearly a third of federal procurement dollars have been awarded to American-controlled companies since Mark Carney took office, up from one-fifth in the 16 months before he was elected.
American companies have also been awarded the most lucrative deals over that span. Three U.S. firms — Microsoft, IBM, and defence contractor L3Harris — were the only companies to land $1 billion-plus contracts under Carney.
Why it matters: We’re starting to see the practical limits of the federal government’s effort to spend more money with Canadian companies. In the case of many major procurements (like a $100 billion fleet of submarines), the best, and sometimes only, option is offered by non-Canadian businesses.
That’s especially true when it comes to tech, which is dominated by U.S. giants. If Ottawa wanted to end its contract with Amazon Web Services, for example, it would take up to three years of full-time work to switch to a (likely worse) alternative.
Zoom out: 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 Ottawa is often not technically allowed to favour homegrown firms for major contracts (though allies have complained that Ottawa is doing so anyway).
Our take: The reality is that many of the world's most important companies are American. For “Buy Canadian” to be a realistic goal across government procurement, we’re going to need to create a lot more viable Canadian competitors.—LA
