Ontario Expands Its Local Procurement Push With the Introduction of the Buy Ontario Act, 2025

Background

On November 20, 2025, the Ontario government tabled Bill 72, the Buy Ontario Act (Public Sector Procurement), 2025 (Act). If enacted, the Act and associated measures will prioritize Ontario goods and services in public procurement. This new legislation forms part of the Ontario government’s response to United States tariffs and trade uncertainties and aims to leverage public sector procurement as a means of promoting, protecting and building Ontario’s economy and businesses while safeguarding its supply chain.

The Act will facilitate measures that prioritize Ontario goods and services, then Canadian goods and services, and lastly non-Canadian goods and services in procurement processes. According to a government press release announcing this new regime, these measures will apply to all Ontario public-sector entities and designated public-sector organizations, which includes the Province of Ontario and all ministries, all public bodies defined under the Public Service of Ontario Act, 2006 (which includes Crown agencies), the Independent Electricity System Operator, Ontario Power Generation Inc. and each of its subsidiaries, and all designated broader public-sector organizations defined under the Broader Public Sector Accountability Act, 2010.

The Act allows the Management Board of Cabinet to issue directives requiring public-sector entities and organizations to give preference to Ontario or Canadian-made goods and services, and to impose specified measures on vendors. Such measures may include limiting eligibility to participate in certain procurements. Public-sector entities and organizations are instructed to impose these measures on third-party supply chain managers with whom they contract.

Notably, the Act provides that measures in these directives must form part of funding arrangements between the public-sector entity or organization and the Crown or an agent of the Crown, and allows the Crown to withhold funding for failure to comply with requirements established under the Act. Lastly, the Act authorizes the Minister of Public and Business Service Delivery and Procurement or another relevant member of the administration to review compliance and require corrective action for non-compliance with the directives.

Concurrent with the introduction of this legislation, the Ontario government also announced that it will establish vendor lists of Ontario and Canadian suppliers to support their inclusion in provincial infrastructure and procurement processes, including as contractors and subcontractors.

Key Takeaways

The Act creates the legal framework for establishing a clear direction for all public buyers to afford preferential treatment to Ontario-made goods or services to be provided in Ontario. The specific measures to be undertaken concerning the procurement of goods and services and the management of contracts will be set out in forthcoming directives. These directives will provide insight to both public buyers and suppliers as to how preference for Ontario and Canadian goods and services will be rolled out.

To address potential legal risk arising from this new regime, the Act includes language shielding public-sector entities from liability for anything done or not done under the Act and any regulation or directive made thereunder, excluding an application for judicial review or a claim for a constitutional remedy. This includes a prohibition on recovery of compensation or damages for losses, including lost revenue and profits.

The Building Ontario Businesses Initiative Act, 2022, Ontario’s current local preference regime, will be repealed by the Act and replaced by this updated regime.

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.