Global Vantage: What international suppliers need to know about Canada’s changing procurement landscape

Companies seeking to participate in Canadian public sector projects face a changing procurement environment as governments respond to continuing geopolitical developments with the United States (US).

Several Canadian provinces (and the Canadian Government) and public bodies have introduced measures restricting the participation of certain US suppliers in public procurements over the past year. While these measures may relate to the wider trade dispute between Canada and the US, they have practical implications for contractors, consultants, technology providers and businesses operating in the construction, engineering and infrastructure sectors.

Restrictions on US suppliers

British Columbia is one of the provinces to act. Under its Tariff Response Procurement Directive (No. 1)¹, government procurement entities covered by the legislation must not include “United States suppliers” in procurements, subject to limited exemptions where necessary to meet operational requirements. The Order defines a US supplier as an entity incorporated or organised under US law, a state or territory of the US or the District of Columbia, or a sole proprietor resident in the US or the District of Columbia. The definition focuses on the legal status of the supplier itself. The position of Canadian-incorporated subsidiaries of US parent companies will therefore require careful consideration in the context of particular procurements, with eligibility depending on the relevant requirements and circumstances.

Additionally, an applicable government procurement entity must not acquire goods or services under an applicable contract if, having regard to legal, financial, operational and other relevant factors, it is viable in the circumstances not to do so.

Such measures are now becoming embedded in procurement frameworks and may influence bidding strategies, project delivery models and selection of project partners.

Ontario adopted a different approach through its Buy Ontario Procurement Directive, which came into force on 13 April 2026 following the Buy Ontario Act (Public Sector Procurement), 2025. The Directive consolidates existing procurement initiatives and applies to a range of public sector entities.

Further, the Procurement Restriction Policy defines a US business and considers factors including the location of a company’s headquarters or main office and the number of its full-time employees in Canada at the time of the procurement process². The requirements also contain provisions aimed at preventing businesses from circumventing the restrictions through local corporate structuring alone.

These developments highlight the significant role of procurement as a policy tool to advance wider economic or strategic objectives. For businesses involved in public construction and infrastructure projects, market access may increasingly depend not only on technical capability and price, but also on factors such as ownership structure, local presence and supply chain arrangements.

Eligibility can no longer be assumed. Corporate structure, place of incorporation, ownership arrangements and workforce location may become relevant factors when bidding for public works, infrastructure and engineering projects. Since requirements may differ between provinces, municipalities and public bodies, this must be kept under review. These requirements may also influence the choice of bidding vehicle, partners or specialist subcontractors.

The practical implications extend beyond Canada. Globally, governments place greater emphasis on economic resilience, domestic supply chains and strategic industries. As geopolitical or trade pressures change, procurement rules may continue to evolve, including in respect of suppliers and goods or to differentiate between specific markets.

Practical considerations

Importantly, these measures do not close the Canadian market to international participation more generally, and significant infrastructure and construction investment and project opportunities remain available across the country. Based on the measures explored above, the restrictions do not extend to UK or European suppliers at the date of writing.

Organisations pursuing Canadian public sector opportunities should monitor legal, policy and associated commercial developments closely and assess whether their corporate structure, supply chains and bidding strategies remain aligned with emerging eligibility requirements. In cases of ambiguity, it may be best to raise questions early in procurement processes and seek legal advice where appropriate.

Please contact the authors should you have any questions regarding how these developments may affect future procurement opportunities, tenders or associated contract terms or policies.

This article includes contributions from Kayleigh Rhodes.

¹ Order in Council 319/2025, TARIFF RESPONSE PROCUREMENT DIRECTIVE (No. 1), ordered 27 June 2025

² Procurement Restriction Policy (U.S. Businesses): A Guide for Government & BPS Entities, Ministry of Public and Business Service Delivery and Procurement, 31 March 2026