On March 30, 2026, the Government of Ontario released provincial and municipal procurement directives under the Buy Ontario Act (Public Sector Procurement), 2025 (Buy Ontario Act) that require the prioritization of Ontario and Canadian goods and services in procurements. These directives come into effect on April 13, 2026.
Most requirements are in effect as of April 13, 2026, with two exceptions: (1) capital infrastructure requirements for municipalities take effect May 15, 2026, and (2) all requirements for local boards and municipal services corporations take effect June 1, 2026. The requirements apply to new procurements that have not been issued as of the date the applicable requirements take effect.
Provincial Buy Ontario Procurement Directive
The provincial Buy Ontario Procurement Directive (Provincial Directive) consolidates the Building Ontario Businesses Initiative (BOBI), the Procurement Restriction Policy and the strategic categories (capital infrastructure and fleet vehicles) into a single directive. The Provincial Directive applies to all government entities, including all ministries and provincial agencies, Ontario Power Generation Inc. and the Independent Electricity System Operator, and designated broader public sector (BPS) organizations within the meaning of the Broader Public Sector Accountability Act, 2010. No entities are exempt; however, an exception is provided for procurements needed to address a situation that is urgent and unforeseen. The Provincial Directive does not prevail over legislation.
Government and BPS entities must continue to comply with all applicable procurement directives and related approval requirements and retain documentation for any procurements covered by the Provincial Directive.
Building Ontario Businesses Initiative
Wherever feasible, government and BPS entities must give preference to Ontario and Canadian businesses below specified procurement value thresholds and give preference to Ontario’s trading partners and apply weighted domestic criteria above specified procurement value thresholds. For procurements with an estimated value of C$50-million or more, government and BPS entities are required to include an Industrial Regional and Technology Benefit.
The BOBI applies to all procurements for goods and services not covered by the strategic categories and does not apply to treasury operations services and Vendor of Record arrangements (VORs).
Procurement Restriction Policy
The Procurement Restriction Policy, which has been in force since March 4, 2025, restricts U.S. businesses from accessing Ontario public-sector procurements. Procuring from a U.S. business is permitted if it is the only viable source and the procurement cannot be delayed, or if the U.S. business commits to having at least 90% of required staff located in Canada (for service procurements only). Deputy minister or CEO approval is required to procure from a U.S. business regardless of value. A “U.S. business” is defined as one having its headquarters or main office in the U.S. with fewer than 250 full-time employees in Canada at the time of the applicable procurement process. Government and BPS entities are permitted to rely on a business’s representation that it does not meet the definition of a U.S. business.
The Procurement Restriction Policy applies to all procurements of goods and services at any value and does not apply when government or BPS entities use an existing VOR or other similar pre-existing arrangements available to public entities.
Strategic Categories
The following requirements set out Ontario’s approach to new procurements in two key strategic categories: capital infrastructure and fleet vehicles.
Capital Infrastructure
A “capital infrastructure procurement” is defined as a procurement for construction, fixtures, furniture and equipment included in and incidental to the construction of a facility and required to support the facility’s operational readiness, as well as transit fleet vehicles, including rolling stock and buses.
Government and BPS entities are required to do the following in respect of capital infrastructure procurements:
- Include in the procurement documents a list of each major good and each service required for the deliverables being procured and a requirement for vendors to submit a domestic supply chain plan that identifies, at a minimum, the source of each of the listed major goods and each service
- Use either an evaluated or commitment approach for domestic supply chain plans (for example, apply a 10% evaluation advantage to the bidder with the highest proportion of Ontario-made goods and Ontario services, followed by Canadian-made goods and Canadian services (evaluated approach) or require vendors to commit to a mandatory eligibility requirement to meet or exceed a specified proportion of Ontario or Canadian-made goods and services (commitment approach))
- Apply weighted domestic criteria, wherever feasible (for example, require vendors to demonstrate how they meet Ontario’s environmental and labour standards)
- Refer to operational guidance issued by the ministry for direction about how to apply any of these requirements
For capital infrastructure procurements, these requirements replace the applicable BOBI requirements found in the Provincial Directive, regardless of value. These requirements apply to any new procurement that has not been posted or issued on the date the requirements come into effect, including VORs, and do not apply to existing contracts or procurements of medical equipment, information technology, fixtures, equipment or furniture acquired solely for operational purposes, or routine maintenance, repair and operations. Government and BPS entities are permitted to use alternative methods if it is not feasible to require vendors to submit a domestic supply chain plan on account of the procurement model, the alternative method is consistent with and advances the objective of the capital infrastructure requirements, and required approval is obtained. A value-for-money exclusion is available if compliance could increase costs by 25% or more, subject to deputy minister or CEO approval.
Government and BPS entities may rely on a vendor’s domestic supply chain plan as evidence of what goods are Ontario or Canadian-made goods and what services are Ontario or Canadian services for the purposes of the Provincial Directive.
Fleet Vehicles
Government and BPS entities are required to purchase or lease made-in-Ontario fleet vehicles for all new light-duty passenger vehicles with a gross vehicle weight rating (GVWR) of or less than 4,500 kilograms, regardless of the procurement value or method. If unavailable or not operationally feasible, entities must purchase or lease from an Ontario Vehicle Producer. Alternative acquisition strategies are permitted only if both options are unavailable or infeasible.
These requirements do not apply to existing contracts, contract extensions, short-term leases (up to 12 months), specialty or modified vehicles, covert or surveillance vehicles, vehicles with a GVWR over 4,500 kg and used vehicles. Government and BPS entities must comply with these requirements when using VOR or other arrangements.
Municipal Buy Ontario Procurement Directive
The Municipal Buy Ontario Procurement Directive (Municipal Directive) sets out Ontario’s approach to procurements for capital infrastructure and fleet vehicles. The Municipal Directive applies to all municipalities, local boards and municipal services corporations that are prescribed as public sector entities under the Buy Ontario Act (see Ontario Regulation 54/26). Similar to the Provincial Directive, the Municipal Directive provides an exception for procurements needed to address a situation that is urgent and unforeseen and does not prevail over legislation.
The requirements under the Municipal Directive regarding capital infrastructure and fleet vehicles mirror the requirements under the Provincial Directive. For capital infrastructure procurements, the Municipal Directive does not require the application of weighted domestic criteria for procurement values above C$368,000. The Municipal Directive also provides additional flexibility with respect to approval of alternate procurement methods, provided they are consistent with the overall objectives of the Municipal Directive and the value for money exclusion.
Key Takeaways
The key takeaways from the new Provincial and Municipal Directives are:
- These procurement directives aim to promote, protect and build Ontario’s economy and supply chain resilience. The province’s direction is clear: preference is to be given to Ontario and Canadian goods and services in public-sector procurements.
- Procurements for capital infrastructure and fleet vehicles must include domestic content requirements by way of domestic supply chain plans and vehicle sourcing preferences, subject to limited exceptions, including a value for money exclusion for capital infrastructure and fallback options for fleet vehicles.
- U.S. businesses remain restricted from accessing provincial procurements, and the BOBI ensures that goods and services procurements outside the strategic categories (capital infrastructure and fleet vehicles) include domestic preference obligations at the provincial level.
Our team is closely monitoring developments, and we will provide updates when more details are made available. For more information, please contact the authors or any other member of our Procurement or Infrastructure groups.
Related Insights
Blakes and Blakes Business Class communications are intended for informational purposes only and do not constitute legal advice or an opinion on any issue. We would be pleased to provide additional details or advice about specific situations if desired.
For permission to republish this content, please contact the Blakes Client Relations & Marketing Department at [email protected].
© 2026 Blake, Cassels & Graydon LLP