Canada's Buy Canadian policy took effect December 16, 2025. It's still missing details on the Small and Medium Business Procurement Program which will have the greatest benefit for startups.
But the most important part of the policy is what it considers 'Canadian'. This will have a ripple effect on other policies from provinces and municipalities to businesses.
- a supplier that has a place of business in Canada where it conducts activities on a permanent basis that is clearly identified by name and accessible during normal business hours; or, a joint venture where each member of the joint venture has a place of business in Canada where it conducts activities on a permanent basis that is clearly identified by name and accessible during normal business hours; and
- is registered and files taxes in Canada (e.g., GST/HST, corporate income tax);
- maintains a registered address in Canada and employs personnel and/or conducts day-to-day business activities in Canada; and
- will not subcontract work to non-Canadian suppliers or individuals located outside Canada, in a manner that results in minimal value-added activities being performed within Canada.
As Procurement Minister Joël Lightbound confirmed, this definition intentionally allows foreign-owned companies to qualify as Canadian.
Laura Osman
This is understandable in our globalized economy that benefits from foreign investment and job creation. We want Canada to be friendly to foreign companies and Canada does not produce everything it needs (no country does).
However, as CCI says in its response, we need to differentiate between active in Canada and “authentically Canadian” where ownership, control and IP are located.
Why the definition matters
We need to have the debate around what being a Canadian company means. There will not be a single definition but a group of metrics that allow governments and companies to create a definition that matches their goals and values.
Buying from companies who invest in Canada and create jobs, the current government of Canada definition, is good for short-term prosperity but bad for long-term control.
Investment from allies and hyperscalers who are friendly to Canada, eg Microsoft, allows Canada to scale up capacity quickly, but relies on a 'promise' that Canadian data sovereignty will not be sacrificed.
Brad Smith
Ontario has already added its own layer: Buy Ontario first, then Canadian which can only lead to Buying Toronto first, then Ontario, then Canada. Etc.
These nuances already exist and we need to develop metrics that include:
- level of Canadian ownership
- level of Canadian control, which is not necessarily the same as ownership
- whether the HQ is in Canada
- whether the founders or key executives are Canadian
- whether IP is owned, controlled and benefits Canadians
Without this level of transparency and precision we will dilute the meaning of being a Canadian company. Just when innovators need it the most, we will be allowing our procurement levers to fund the wrong companies.