Buy Canadian - Backgrounder

Effective December 16, 2025, the Government of Canada is rolling out the new Buy Canadian Policy for federal procurement. The policy sets clear direction for federal departments and agencies to prioritize Canadian suppliers and Canadian content in their purchasing decisions.

The approach initially includes 2 key policies, with additional policies to follow, designed to strengthen Canada’s economy and supply chains. The 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.

Buy Canadian Policy Framework

Policy on Prioritizing Canadian Suppliers and Canadian Content in Strategic Federal Procurement

This policy ensures that priority is given to Canadian businesses and Canadian content for major federal purchases. It applies to procurements that are core components to Canada’s industrial base and reinforce Canada’s strong and resilient economy, valued at $25 million and over. The policy will be extended to contracts valued at $5 million or more by spring 2026.

Under the policy, priority will be provided to Canadian suppliers by awarding them additional points during the bid evaluation process. More points will also be awarded based on the amount of Canadian content offered by each bidder, which includes manufacturing, research and development, and other economic activities that occur in Canada.

The policy is designed to strengthen Canada’s domestic economy, reduce reliance on any single trade partner and offer targeted support to workers and businesses.

Exceptions are permitted only in specific cases, such as unreasonable cost increases or where application of the policy would be inconsistent with the public interest. Exceptions must be approved by the responsible minister and fully documented to ensure accountability and transparency.

Policy on Prioritizing Canadian Suppliers and Canadian Content in Strategic Federal Procurements

Policy on Prioritizing Canadian Materials in Federal Procurement

This policy 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.

It applies to projects such as buildings, bridges, roads and defence goods, like ships and aircraft parts. Suppliers must certify their use of Canadian materials before bidding and maintain records during the contract to confirm compliance.

This policy supports Canadian industry in the context of a changing global trade landscape that is impacting supply chains and the economy. It also promotes transparency by setting clear rules and thresholds, with exceptions only allowed under specific circumstances where strictly necessary and with approval from the responsible minister.

Policy on Prioritizing Canadian Materials in Federal Procurements

Supporting small and medium businesses in federal procurement

In addition to existing procurement policies, the Government of Canada will be launching the new Small and Medium Business Procurement Program in spring 2026. This initiative, in partnership with Innovation, Science and Economic Development Canada, will enhance access to federal procurement opportunities for Canadian small and medium businesses. Further details on the program will be communicated as they become available.

Advancing fair access through reciprocal procurement

The Government of Canada will fully implement the Policy on Reciprocal Procurement in spring 2026. This policy ensures that non-defence federal procurements are limited to goods and services originating from Canada or its trading partners, based on trade agreements and reciprocal access.

Under this policy, supplier eligibility will be determined by the origin of goods and services offered. This builds on the Interim Policy on Reciprocal Procurement, which came into effect on July 14, 2025, and currently applies the policy based on the location of suppliers.