Feds should expand ‘extremely limited’ Buy Canadian policy to promote Canadian economy, says opposition MPs, union

Canada's largest private-sector labour union is calling on the federal government to better leverage the Buy Canadian policy and promote public procurement to circumvent the punishing impacts of trade war with the United States. 

Unifor said in a June 17 press release that Ottawa has introduced “extremely limited” procurement rules under the Buy Canadian policy, but that U.S. companies still receive preferential treatment for government contracts. The union said the policy should be expanded to match every “Buy American” rule in the U.S., arguing Canadian businesses are left out of U.S. procurement competitions. 

The policy—which took effect on Dec. 15, 2025,—sets a mandate for departments to prioritize domestic suppliers and content when they are buying goods and services. It applies to key procurements valued at $25-million and above, and is set to be extended to contracts valued at $5-million or more.

The union said the government should apply these policy requirements retroactively for strategic nation-building, and high-value procurements—such as contracts worth more than $1-billion—not yet awarded.

Unifor Quebec director Daniel Cloutier told The Hill Times the policy should be leveraged to actively circumvent the impacts of the trade war with the U.S. through the use of procurement policies prioritizing Canadian firms, developing domestic manufacturing capacity, and supply chains.

“We believe that Buy Canadian must become a reality. … The government should revise on urgent matters, how they give public contracts. The rules need to be changed. We need to consider those rules' impact over our manufacturing capacity,” Cloutier said in a June 17 interview.

NDP MP Heather McPherson (Edmonton Strathcona, Alta.), her party’s transport critic, told The Hill Times in a June 18 email that the government “needs to back up its ‘Buy Canadian’ talk in the face of Trump's trade war with action and a real plan”.

“Instead of relying on a series of one-off decisions, the federal government needs a serious industrial strategy that understands the impacts on Canadian industries, workers, and communities, and uses every tool available to strengthen them,” McPherson said.

She argued that Canadians should be building more of the trains, transit vehicles, infrastructure, and public assets that public dollars are paying for, but that those projects should also be using home-grown raw and refined materials.

“Public procurement is one of the most powerful tools governments have to support good jobs, strengthen domestic manufacturing, and build long-term economic independence and resilience,” McPherson said.

“Getting the best deal for Canadians takes looking beyond the price tag. The impacts on Canadian workers, communities, and industries all need to be factored in.”

Under the Buy Canadian policy, domestic suppliers are supposed be awarded additional points during the bid-evaluation process, and will earn more points based on the amount of Canadian content they offer, which includes domestic manufacturing, and research and development.

This policy also requires the use of Canadian-produced steel, aluminum, and wood products in large federal construction and defence contracts valued at $25-million or more, where at least $250,000 worth of these materials are required and a Canadian source of supply is available. Materials must be manufactured or processed in this country, not simply sold by Canadian companies, according to the government.

Cloutier testified at the House Government Operations and Estimates (OGGO) Committee on June 16, telling MPs that while the Carney government’s approach is good step in the right direction, concrete action is needed as a next step. He argued the federal government has significant leverage, and can use procurement policies to protect jobs as industries feel the pain of the trade war. 

“Buying Canadian isn’t an expense,” Cloutier told MPs. “It’s an investment in our resilience. Unifor members aren’t asking for charity. They’re asking for a chance to build here what governments buy here.”

He referred to the case of PACCAR, an American company that has a large facility in Sainte-Thérèse, Que., where Kenworth and Peterbilt trucks are assembled. He said since the start of the trade war, the plant has undergone several rounds of layoffs and has shed nearly 800 jobs, and the daily production has fallen from 92 to 25 trucks.

Cloutier also argued the government should review its traditional approach of awarding contracts to the bidder offering the cheapest price, and instead factor in other criteria such as prioritizing local content and manufacturing sovereignty.

“The principle makes sense, especially when public finances are tight, but the lowest price on the invoice isn't the true cost to society,” Cloutier told MPs. 

“When our industrial footprint erodes, our tax base shrinks along with it. Jobs, tax revenue, and communities disappear. We, therefore, need a more flexible approach, an approach that incorporates other criteria, local content, industrial footprint, and our capacity for domestic manufacturing.”

Cloutier pointed at the process to replace Via Rail’s long-distance, regional, and remote (LDRR) fleet as an example. Unifor estimates this purchase is worth $3-billion.

“This is exactly the kind of leverage that can build a supply chain, support thousands of jobs, and anchor expertise here. We cannot afford to let this slip away,” Cloutier told MPs.

Via Rail, the Crown corporation responsible for managing the national passenger rail service, has been running the process to replace its aging long-distance trains operating outside the Quebec City–Windsor corridor since 2024. The procurement was expected to move forward with a winning bidder early this year, but critics argue that since it predates the implementation of the Carney government’s Buy Canadian policy, there is a risk of billions of tax dollars flowing outside of the country.

The government’s guidelines explicitly outline that the policy does not apply to solicitations published or contracts awarded prior to the effective date. 

A June 2025 briefing note for the deputy transport minister says that funding amounts for the new LDRR fleet were not released to protect the government’s negotiating position for the procurement process. According to the note, roughly 75 per cent of the LDRR fleet is more than 65 years old, which is well past its industry-standard lifespan of 35 to 40 years.

Two requests for qualification that closed last winter for the locomotives and train cars show the corporation is looking for design, supply, manufacture, test, delivery, and commissioning of an order of 42 passenger diesel locomotives and an order of 313 passenger cars, split into nine different car types, with options to add more. Via Rail’s 2024 annual report says the request for proposals process engaged suppliers for 320 new cars and 42 locomotives.

Via Rail did not respond to The Hill Times’ questions about the details of the procurement such as the cost and timelines.

The union is also asking the federal government to disqualify U.S. suppliers from preferential treatment under the Policy for Reciprocal Procurement, regardless of their Free Trade Agreement partner status.

“Reciprocity works both ways. Buy American rules, shut the door on our companies. Meanwhile, our public procurement remains wide open to theirs. That imbalance must be corrected,” Cloutier told the committee.

Unifor is also asking the government to consider all statutory powers to protect jobs and disincentivize the offshoring of Canadian production and impose tariffs or other heavy penalties on firms that comply with unjust U.S. trade orders. This can include barring goods previously made in Canada from re-entering the country from the U.S. or elsewhere, according to the union.

Bloc Québécois MP Marie-Hélène Gaudreau (Laurentides—Labelle, Qué.), one of the MPs who listened to Unifor's testimony, told The Hill Times on June 18 that the government must ensure that the policy is not limited to supplying Canadian goods, and that it must look further ahead.

She argued that an industrial policy to complement Buy Canadian would allow the government, in the medium term, to create the Canadian domestic market from small businesses to major corporations. “There is still a lot of work to be done,” she said.

ikoca@hilltimes.com

The Hill Times