Key Takeaways:
- The Buy Canadian Policy is a new federal procurement policy that prioritizes Canadian suppliers and Canadian content in strategic federal procurements.
- The policy gives a clear and measurable advantage to companies with a real footprint in Canada, including those that invest, employ Canadians, and contribute to local economies.
- The policy applies to federal departments and agencies, as well as federal grants and contributions programs, and will be extended to Crown corporations and their subsidiaries.
- The policy aims to strengthen Canada’s industrial capacity, support domestic workers and businesses, and position Canada to compete more effectively in global markets.
- Additional measures, including the Small and Medium Business Procurement Program and the full implementation of the Policy on Reciprocal Procurement, will be rolled out by spring 2026.
Introduction to the Buy Canadian Policy
The Honourable Joël Lightbound, Minister of Government Transformation, Public Works and Procurement and Quebec Lieutenant, announced that the core elements of the Buy Canadian Policy are coming into force effective December 16, 2025. This policy is a key commitment of Budget 2025: Canada Strong and represents a major shift in federal procurement toward nation-building and long-term economic resilience. The policy is designed to make Canada its own best customer by strengthening domestic industries, supporting Canadian workers, and building a more resilient and diversified economy in a rapidly changing global trade environment.
How the Policy Works
The Government of Canada is implementing the Policy on Prioritizing Canadian Suppliers and Canadian Content in Strategic Federal Procurement. This policy gives a clear and measurable advantage to companies with a real footprint in Canada: businesses that invest here, employ Canadians, and contribute to local economies. Federal procurements will prioritize bids that feature greater Canadian content, which includes manufacturing, research and development, and other economic activities that occur domestically. Priority will be given to Canadian businesses and Canadian content for major federal procurements, starting with large, strategic procurements valued at $25 million and over, and expanding to contracts valued at $5 million and above by spring 2026.
Requirements for Canadian-Produced Materials
The Government of Canada will require the use of Canadian-produced steel, aluminum, and wood products in large federal construction and defence projects. These materials must be manufactured or processed in Canada, not simply sold by Canadian companies, so that federal investments directly drive demand for materials produced here at home. This requirement applies to projects valued at $25 million or more, where at least $250,000 worth of these materials is required and a Canadian source of supply is available. This move is expected to support Canadian industries and create jobs in the manufacturing sector.
Scope and Implementation of the Policy
The Buy Canadian Policy applies to federal departments and agencies, as well as federal grants and contributions programs, and will be extended, where possible, to Crown corporations and their subsidiaries. Additional measures will be rolled out by spring 2026 to build on this foundation, including the Small and Medium Business Procurement Program and the full implementation of the Policy on Reciprocal Procurement. These measures will strengthen and expand the Buy Canadian Policy measures already in effect, providing more opportunities for Canadian businesses to participate in federal procurements.
Benefits of the Policy
By leveraging federal procurement as a strategic economic tool, the Buy Canadian Policy strengthens Canada’s industrial capacity, supports domestic workers and businesses, and positions Canada to compete more effectively in global markets, now and for the long term. The policy creates demand across the country, from steelworkers in Hamilton to aluminum producers in Saguenay–Lac-Saint-Jean and lumber mills in La Tuque and Prince George, while giving clear advantages to suppliers who invest, innovate, and produce here at home. This move is expected to lead to stronger supply chains, good jobs, and a more resilient Canadian economy.
Quotes from Government Officials
The Honourable Joël Lightbound, Minister of Government Transformation, Public Works and Procurement and Quebec Lieutenant, stated, "By implementing the Buy Canadian Policy today, the federal government is putting Canadian workers and industries first and becoming Canada’s best customer." The Honourable Shafqat Ali, President of the Treasury Board, added, "The Buy Canadian Policy is an opportunity for us to invest in building a stronger economy and a stronger Canada." The Honourable Mélanie Joly, Minister of Industry and Minister responsible for Canada Economic Development for Quebec Regions, noted, "Industry is the backbone of the Canadian economy. Our government is taking decisive action to build the strongest economy in the G7 by being our own best customer."
Quick Facts and Budget Allocation
In 2024 to 2025, the Government of Canada awarded $66.9 billion in contracts for goods, services, and construction. Budget 2025 proposes nearly $186 million in new funding to fully implement the Buy Canadian Policy, including $79.9 million over 5 years to help launch the Small and Medium Business Procurement Program. The Buy Canadian Policy will extend to infrastructure spending and other federal funding streams, ensuring that as much as $70 billion in additional public investment supports Canadian-made products and services. The policy will apply to the work of various government initiatives, including the Major Projects Office, Build Canada Homes, the Defence Investment Agency, and the Build Communities Strong Fund.