A study by the Montreal Economic Institute estimates Canada's federal "Buy Canadian" policy could increase the cost of major infrastructure projects by over $12 billion annually.
Public procurement represents a significant portion of Canada's economy, exceeding the OECD average. The "Buy Canadian" policy introduces bid preferences favoring domestic suppliers, potentially leading to higher costs, similar to observed effects in California's bid preference program.
The policy aims to strengthen domestic industries and support Canadian workers. However, the study suggests it reduces competition, leading to less efficient results and ultimately leaving taxpayers and service consumers worse off.
Currently impacting procurements valued at $25 million and over, the policy is set to expand to contracts of $5 million and above by spring 2026.