Canada has implemented a new policy that restricts suppliers from countries that limit Canadian access to their government contracts from bidding on federal procurement opportunities, affecting all non-defence contracts over $10,000.
The Interim Policy on Reciprocal Procurement took effect Monday and applies to all federal departments and agencies as the government seeks to protect Canadian businesses from what it calls unfair trade practices while negotiating a new economic partnership with the United States.
Policy targets non-trading partners
Under the new rules, suppliers from countries that don’t provide reciprocal access to Canadian companies through trade agreements can be blocked from competing for federal contracts. The policy prioritizes suppliers from Canada and reliable trading partners that offer similar access to Canadian businesses.
“The Government of Canada is committed to protecting and defending the interests of all Canadians, and will not compromise when it comes to ensuring fair market access for Canadian industry,” said Joël Lightbound, Minister of Government Transformation, Public Works and Procurement. “The Policy on Reciprocal Procurement will help leverage our purchasing power to support Canadian businesses and workers impacted by unjustified American tariffs.”
Two-phase implementation
The government will roll out the policy in two phases. The current interim phase focuses on applying restrictions based on supplier location and began with training and tools that were distributed to departments on June 30.
A second phase, to be introduced later, will determine supplier eligibility based on the origin of goods and services being offered rather than just company location.
Broader protectionist measures
The policy represents part of a broader government strategy to strengthen domestic procurement. Officials said they are also exploring ways to maximize the use of Canadian steel and aluminum in government-funded projects, working with provinces and territories.
Contract thresholds and exceptions
The new rules apply to all new non-defence federal contracts exceeding $10,000. Contracts and solicitations posted before July 14 will not be affected by the policy changes.
Suppliers from non-trading partner countries will be excluded from federal procurement opportunities unless they qualify for valid exceptions under the policy framework.
Public Services and Procurement Canada oversees implementation to ensure compliance with national and international trade agreements.
The government said the measures will protect Canadian innovation, jobs and economic growth while ensuring domestic suppliers remain competitive globally.
