‘Buy Canadian’ policy likely to cost taxpayers $12 billion yearly: study
Global News
The study states that the 'Buy Canadian' policy, enacted in December 2025, could cost taxpayers $12 billion each year it is in effect.
A study released by the Montreal Economic Institute estimates the federal government’s “Buy Canadian” policy could increase the cost of large infrastructure projects by more than $12 billion per year.
The study states that, among Organization for Economic Co-operation and Development (OECD) countries, total expenditures on public procurement accounted for 12.9 per cent of gross domestic product in 2021.
In Canada, that number was slightly higher, at 13.4 per cent, highlighting how the Canadian government’s purchases of goods and services are a significant part of the Canadian economy, larger than the OECD average.
The study states that following trade tensions between Canada and the U.S., Canada had only engaged in public procurement “more sparingly.”
Now, with Canada’s new policy, this practice has grown in Canada due to public procurement, which refers to “the purchase by governments and state-owned enterprises of goods, services and works.”
The study states that the “Buy Canadian” policy “creates tighter controls to avoid tariff jumping,” which refers to foreign firms avoiding tariffs by establishing a formal local presence.
As a result, the study finds that the federal policy “proposes a form of bid preference whereby Canadian suppliers are treated as being cheaper for the purpose of evaluating their bids.”
It is also noted that provincial governments have engaged with “similar types of procurement protectionism.”
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