Canada's new procurement policy could alienate its own companies, lawyers say

On July 14, a temporary procurement policy came into effect in Canada that restricts access to federal contracts for companies from countries that do not provide similar access to Canadian suppliers. The measure is aimed at “protecting the interests of Canadian businesses” amid trade threats from the United States.

However, according to lawyers, the new policy could also harm Canadian companies themselves. It only allows those with a permanent physical office in Canada and operating under a “traditional” model to bid. This excludes thousands of small and start-up companies, especially in the tech sector.

Fasken lawyer Marcia Mills warns that many innovative and joint ventures involving Canadians may now be considered “not Canadian enough.”

In addition, due to the uncertain terms of agreements with the United States and Washington’s possible withdrawal from the World Trade Organization, American companies may lose access to contracts in Canada entirely.

According to experts, the policy is a response to trade tensions with the United States and an attempt to strengthen relations with the EU. But it could reduce competition and hurt local entrepreneurs, especially in high-tech sectors.