Ontario Drops the Hammer

The "Buy Canadian" movement is evolving from rhetoric to regulation, with Ontario's dramatic U.S. supplier restrictions now in effect and Saskatchewan revealing surprisingly high domestic procurement numbers. Meanwhile, defense infrastructure contracts show how federal dollars are flowing to regional SMEs. Here's your essential briefing:

Ontario Drops the Hammer on U.S. Suppliers

Source: Fasken | Date: April 10, 2025

What's Happening: Ontario's new Procurement Restriction Policy—retroactive to March 4, 2025—has officially banned public sector entities from contracting with U.S. businesses unless they meet extremely narrow exceptions. The definition of "U.S. business" is remarkably specific: any supplier with headquarters in the U.S. OR fewer than 250 full-time employees in Canada.

What It Means For You:

• This applies to ALL provincial government entities, broader public sector organizations, and ALL procurement values and methods

• Only two exceptions exist: sole-source justification (you're literally the only option) or emergency procurements (urgent health/safety needs)

• Deputy minister/CEO approval with documented business case required for any exception

• Even Canadian subsidiaries of U.S. firms face exclusion without significant domestic employment

Between Us: This is the biggest procurement story of the week. While Canada still lacks a consistent definition of "Canadian," Ontario has created a crystal-clear definition of "American." If you have U.S. ownership but substantial Canadian operations, now's the time to document your Canadian employee count—250+ is the magic number.

Saskatchewan's Surprising Local Procurement Numbers

Source: CBC News | Date: April 10, 2025

What's Happening: While the Saskatchewan NDP is proposing a monthly "Buy Local Day" initiative, newly released provincial data shows local procurement is already dominant. A whopping 90% of provincial procurements over the past five years were awarded to Saskatchewan-based companies, rising to 95% when only considering contracts where Saskatchewan firms competed.

What It Means For You:

• Provincial Crown Corporations allocated 75% ($1.2 billion) of contracts to Saskatchewan suppliers in the first three quarters of 2024-2025

• Only 3% of Saskatchewan government contracts originated from United States suppliers

• 99% of all provincial procurements in the last five years were granted to Canadian companies

Current Saskatchewan Procurement by Location (2024-2025)

Our Take: The NDP proposal might seem like political theater given these numbers, but it signals continued political focus on procurement as an economic development tool. Every jurisdiction is trying to outdo each other in the "Buy Canadian" race, so expect more documentation requirements to demonstrate local economic benefits.

Federal Defense Infrastructure Contracts Favor SMEs

Source: Defence Construction Canada | Date: April 7-11, 2025

What's Happening: The Department of National Defense awarded 12 defense infrastructure contracts totaling $9.8 million through Defence Construction Canada between April 7-11. These awards show how federal dollars are supporting regional small and medium enterprises.

What It Means For You:

• Regional distribution: 58% of funds allocated to Ontario, 32% to Alberta, and 10% to Quebec

• SMEs dominated with 75% of all awards, aligning with DND's Indigenous and Regional Business Procurement Strategy

• Supply chain localization is real: 90% of materials for roofing and HVAC contracts came from Canadian manufacturers

• Cybersecurity certifications are now mandatory for all critical infrastructure projects

Tip: Federal defence infrastructure contracting is showing what "Buy Canadian" looks like in practice—prioritizing SMEs and Canadian supply chains while maintaining competitive bidding. If you're in this space, emphasize your Canadian material sourcing in proposals.

Your Procurement Action Plan

1. Document Your Employee Count: With Ontario defining "U.S. business" as having fewer than 250 Canadian employees, now's the time to verify and document your headcount if you have any U.S. ownership connections.

2. Supply Chain Mapping: Federal defense contracts show 90% Canadian materials sourcing. Start documenting your supply chain's Canadian content percentage—this will likely become a standard requirement across jurisdictions.

3. Consider Regional Targeting: Saskatchewan's 95% local award rate when local firms compete suggests focusing on regions where you have the strongest local presence and can tell the most compelling "local benefits" story.

4. Prepare for Exception Procedures: If you're a U.S. business targeting Ontario contracts, develop comprehensive documentation for the exception process, focusing on unique capabilities and business continuity impacts.

5. Watch for Definition Expansion: Ontario's definition of "U.S. business" could become a template for other provinces. Prepare for similar restrictions that may focus on headquarters location and employee counts.

The Bottom Line

The Canadian procurement landscape is rapidly fragmenting into a patchwork of restrictions, preferences, and definitions. Ontario's strict U.S. business ban sets a new benchmark for protectionism, while Saskatchewan's data shows how deeply localized procurement already is across much of Canada.

For contractors, this creates both challenges and opportunities. Those with clear Canadian ownership, substantial domestic employment, and Canadian supply chains will find themselves increasingly advantaged. Those with U.S. connections face a more complex path requiring careful documentation and possibly corporate restructuring.

What's clear from this week's developments is that "Buy Canadian" is no longer just a slogan—it's becoming encoded in specific, enforceable procurement policies with real teeth.

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