Ottawa Implements Buy Canadian Policy, Marking a Major Shift in Federal Procurement

The Government of Canada has formally implemented its new Buy Canadian Policy, a sweeping change that redefines how the federal government purchases goods and services and positions public procurement as a core nation-building tool. Announced in Longueuil, Quebec, the policy takes effect immediately as of December 16, 2025, and signals a deliberate move toward strengthening domestic industries, supporting Canadian workers, and building long-term economic resilience amid an increasingly volatile global trade environment.

The Honourable Joël Lightbound, Minister of Government Transformation, Public Works and Procurement and Quebec Lieutenant, confirmed that the core elements of the policy are now in force. Framed as a key commitment under Budget 2025: Canada Strong, the Buy Canadian Policy represents a fundamental recalibration of federal procurement priorities, shifting the emphasis from lowest-cost sourcing toward strategic economic impact. At its core, the policy is designed to make Canada its own best customer.

Central to the policy is the new framework that prioritizes Canadian suppliers and Canadian content in strategic federal procurement. Companies with a genuine footprint in Canada—those that invest domestically, employ Canadian workers, and conduct manufacturing, research, and development within the country—will now receive a clear and measurable advantage when bidding on federal contracts. Procurement evaluations will increasingly reward higher levels of Canadian content, ensuring that public dollars circulate within the national economy rather than flowing outward.

This prioritization applies immediately to large federal procurements valued at $25 million or more, with the threshold set to expand to contracts valued at $5 million and above by spring 2026. The phased approach is intended to quickly impact major strategic purchases while gradually broadening the policy’s reach across a wider range of federal spending.

Alongside supplier prioritization, the government has introduced firm material requirements for major construction and defence projects. As of today, federally funded projects of $25 million or more must use Canadian-produced steel, aluminum, and wood products when at least $250,000 worth of these materials is required and a domestic source of supply exists. Crucially, these materials must be manufactured or processed in Canada, not merely sold by Canadian intermediaries, ensuring that federal investments directly stimulate domestic production and industrial capacity.

The scope of the Buy Canadian Policy extends beyond core federal departments and agencies to include federal grants and contributions programs. Where feasible, the policy will also be applied to Crown corporations and their subsidiaries, further embedding domestic preference across the federal economic ecosystem.

Additional measures are scheduled for rollout by spring 2026, including the launch of the Small and Medium Business Procurement Program and the full implementation of the Policy on Reciprocal Procurement. Together, these initiatives are intended to deepen the policy’s impact, expand access for smaller Canadian firms, and ensure fairness in international procurement relationships.

Federal officials emphasized that the scale of opportunity is substantial. In the 2024–2025 fiscal year alone, the Government of Canada awarded $66.9 billion in contracts for goods, services, and construction, with $55.6 billion administered through Public Services and Procurement Canada. Budget 2025 commits nearly $186 million in new funding to fully implement the Buy Canadian Policy, including $79.9 million over five years to support small and medium-sized enterprises in navigating and competing within the federal procurement system.

The policy is also set to influence a wide range of national initiatives and funding streams, extending to infrastructure spending and other federal programs that together represent up to $70 billion in additional public investment. It will guide procurement decisions tied to the Major Projects Office, which fast-tracks transformative energy, trade, and transportation projects, as well as Build Canada Homes, the Defence Investment Agency, and the Build Communities Strong Fund, which supports infrastructure ranging from hospitals and universities to bridges and recreation centres.

Minister Lightbound described the policy as a decisive step toward stronger supply chains and better jobs, noting that its impact will be felt across regions and sectors, from steelworkers in Hamilton to aluminum producers in Saguenay–Lac-Saint-Jean and lumber mills in La Tuque and Prince George. Treasury Board President Shafqat Ali framed the initiative as a way to ensure public funds are managed responsibly while delivering tangible benefits to Canadians, while Industry Minister Mélanie Joly underscored its role in positioning Canada to build the strongest economy in the G7 by putting workers and industries first.

Taken together, the Buy Canadian Policy marks a structural shift in how Ottawa views procurement—not as a neutral administrative function, but as a strategic lever for industrial development, economic security, and national resilience. As the policy expands over the coming months, it is poised to reshape the relationship between public spending and domestic production, embedding Canadian economic priorities at the heart of federal decision-making for years to come.