Critics warn the federal government's 'Buy Canadian' push amounts to maple-washing

The institute argues that Ottawa should distinguish between Canadian-controlled businesses and foreign-owned subsidiaries when awarding contracts meant to help homegrown companies grow.

For taxpayers, it comes down to what Ottawa is trying to accomplish. Contracts can support Canadian jobs and production even when the supplier is foreign-owned. But helping Canadian-owned businesses grow means considering who owns and controls the companies receiving that money.

What qualifies as a Canadian supplier?

Under Ottawa’s Buy Canadian rules for federal purchasing in strategic sectors, a business can qualify as a Canadian supplier without being Canadian-owned. In other words, the federal definition does not require Canadian ownership.

Under the strategic procurement policy, which came into effect December 16, 2025, qualifying suppliers must maintain a permanent place of business in Canada, register and file taxes in Canada and employ personnel or conduct daily business activities in Canada. They also cannot subcontract abroad in a way that leaves minimal value-added activity in Canada. Contracting authorities must document their eligibility decisions.

This means that while having a Canadian address alone is insufficient, a foreign-controlled business can qualify as a Canadian supplier.

Eligible Canadian suppliers have their bids evaluated as though the price were 10% lower. That gives them an advantage when the government compares bids, though it doesn’t change what they get paid if they win the contract.

At first, the strategic procurement policy applied only to purchases of $25 million or more. However, Ottawa lowered the threshold to $5 million on June 15, 2026, bringing more contracts in designated sectors under the policy.

Ottawa also rewards work performed in Canada

The government’s stated goal includes supporting Canadian workers and strengthening domestic supply chains. The policy looks at both who qualifies as a Canadian supplier and how much of the work takes place in Canada.

Bids get additional consideration for Canadian content, which can include research and development, manufacturing, installation, warehousing and after-sales service carried out in Canada.

The Buy Canadian policy also requires Canadian-made steel, aluminum and wood products for qualifying construction and defence contracts worth at least $25 million, when those materials total at least $250,000 and Canadian supply is available. It’s not enough to simply buy from a Canadian business; the materials must be produced here. Exceptions apply if materials are unavailable or the requirement would cause significant project delays.

While contracts awarded to foreign-owned suppliers can still create jobs and support production in Canada, the Institute questions whether those benefits alone should qualify them for preferences meant to help Canadian-owned businesses grow.

The proposed fix puts control first

The institute recommends reserving Canadian-company status for firms headquartered here that are not majority-controlled by a foreign parent or foreign government. It argues that ownership matters, particularly for intellectual property, such as patented technology, whose commercial returns can flow across borders.

The institute wants Ottawa to start with defence procurement. The federal Strategic Partnership Framework allows companies to qualify as Canadian based on their operations here, without requiring Canadian ownership. It also outlines possible expectations for partners, including transparent ownership, decision-making authority in Canada and investment in Canadian research and intellectual property. These expectations depend on the project and circumstances.