The federal government’s new “Buy Canadian" policy for procurement is a good step forward, but the fine print points to a risk where companies only appear Canadian on paper and reap the rewards, failing to deliver the intended outcomes for the country, say observers.
Daniel Perry, director of federal affairs at the Canadian Council of Innovators, says the government should sharpen its definition of what's Canadian.
“Companies with a real footprint in Canada, those that invest here, employ Canadians, and innovate domestically will receive a clear advantage when bidding on federal contracts,” Government Transformation, Public Works, and Procurement Minister Joël Lightbound (Louis-Hébert, Que.) told reporters during a Dec. 16 policy rollout announcement in Longueuil, Que.
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The new policy sets a mandate for federal departments to prioritize Canadian suppliers and Canadian content when they are buying goods and services. The policy applies to key procurements valued at $25-million and more, and will be extended to contracts valued at $5-million or more by the spring of 2026.
Under the new rules, Canadian suppliers will be awarded additional points during the bid-evaluation process, and will earn more points based on the amount of Canadian content they offer, which includes domestic manufacturing, and research and development.
This policy also requires the use of Canadian-produced steel, aluminum, and wood products in large federal construction and defence contracts valued at $25-million or more, where at least $250,000 worth of these materials are required and a Canadian source of supply is available. Materials must be manufactured or processed in Canada, not simply sold by Canadian companies, says the government.
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“Being a Canadian firm, or a product cannot just mean having a mailbox in Canada or having provisional staff identified as your Canadian leader for a product that is obviously sourced from elsewhere… So there will be work required of the government, working with us and others, to make sure that they are substantively Canadian and not just in name only,” he said.
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“The policy gives explicit weight to Canadian value added alongside price and technical merit. That’s a shift. It moves procurement away from being purely transactional and toward something more strategic, where companies that build and grow in Canada have a real advantage, not just a paper presence,” Perry told The Hill Times.
According to Perry, the government’s definition of what is Canadian is “extremely broad” as it applies to any company that has a Canadian address, some local employees, and pays taxes in Canada. That definition needs to be “sharpened” to clearly benefit companies that retain their intellectual property (IP) in Canada, and are domestically owned, he argued.
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Without proper verification and enforcement, procurement dollars can end up supporting companies whose profits and IP still leave the country, limiting the policy’s real impact, said Perry.
“In a world where our allies are competing on ownership and control of technology, that means the economic upside and IP created through procurement can still flow out of Canada.”
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Maplewashing is a pretty serious issue with these kinds of policies, yes.
I'm glad to see someone mentions it should be more of a temporary thing in here. In the long run, trade with countries we trust isn't a bad thing.
But why that direction? Proportion of local employees and local physical capital seems like the obvious measure of if the value added happens in Canada. It just needs to be higher fraction, maybe.
If you force whatever plant to sell to Canadian investors, they're going to do it at a bargain, and the Canadian investors are going to be selling off ownership of things elsewhere in the world in order to fund it. It's not free money, and we lose diversification and economic resilience in the process.
That pretty smart. Flexibility for quick/small projects, and for edge cases where it might not be relevant. A firm commitment to help the squeezed export industries otherwise.
I certainly would be. Anybody can see the ads fairly easily, but sending in a proposal seems like it would a whole thing.