Canadian Design and Construction Report
New federal procurement rules that prioritize Canadian suppliers and domestically produced materials came into force Dec. 16, 2025, altering how the federal government purchases goods and services.
The Buy Canadian Policy introduces requirements that give preference to bids with higher levels of Canadian content, including domestic manufacturing, research and development, and other economic activity carried out in Canada. The policy applies to federal departments and agencies and will also affect federal grants and contributions programs. Where possible, it will be extended to Crown corporations and their subsidiaries.
As of Dec. 16, the policy applies to large federal procurements valued at $25 million or more. The threshold is expected to expand to contracts worth $5 million and above by spring 2026.
The policy also introduces new material requirements for major federal construction and defence projects. Projects valued at $25 million or more must use Canadian-produced steel, aluminum and wood products when at least $250,000 of those materials is required and a domestic source of supply is available. Under the rules, materials must be manufactured or processed in Canada, rather than simply sold by Canadian companies.
Public Services and Procurement Canada says the changes are intended to give preference to companies with an established presence in Canada, including businesses that employ Canadian workers and carry out production domestically.
Additional measures are planned for spring 2026, including the introduction of a Small and Medium Business Procurement Program and the full implementation of a Policy on Reciprocal Procurement, which would place further conditions on foreign access to federal procurement opportunities.
The Buy Canadian Policy was outlined in Budget 2025 and represents a shift toward using federal purchasing as a tool to influence domestic supply chains and industrial capacity.
