Foreign-owned companies can qualify for preferential treatment under Ottawa's Buy Canadian procurement policy, prompting complaints from contractors and questions about whether the program actually puts Canadian businesses first.Federal Procurement Ombudsman Alexander Jeglic told MPs his office has received more than a dozen complaints involving the policy since January, with suppliers seeking clarification about which companies qualify for government contracts.“Since January my office has received more than a dozen cases raising issues related to Buy Canadian,” Jeglic testified before the House of Commons government operations committee.“They offer early insights into questions and concerns that suppliers and procurement officials are navigating.”Blacklock's Reporter says the policy, announced by Prime Minister Mark Carney on September 5, 2025, was intended to give Canadian businesses an advantage when competing for federal government contracts.However, the rules allow foreign-owned multinational corporations to qualify as Canadian suppliers if they maintain a permanent business presence in Canada.Jeglic said the definition has created confusion among contractors concerned about competing against larger international companies.“We are hearing questions about whether foreign-owned multinationals operating in Canada should receive the same preferences as Canadian small and medium-sized businesses,” he told MPs.Conservative MP Richard Bragdon questioned whether the policy delivers on the government's promise to prioritize Canadian companies when there is no minimum Canadian ownership requirement.“Under the current government rules, a company can qualify as ‘Canadian’ by having a permanent place of business here even if it is owned by a foreign company,” Bragdon said.He challenged the ombudsman on whether the policy provides any meaningful advantage to domestically owned businesses.“The government promised the Buy Canadian policy would put Canadian businesses first, but if a foreign-owned company can qualify simply by having a business presence in Canada, what is the policy actually changing?” Bragdon asked.“I am not a defender of the policy,” Jeglic replied..Bragdon pressed further, questioning whether foreign corporations could benefit from procurement preferences originally presented as a way to support Canadian businesses and workers.“Does that definition really meet the government’s promise to support Canadian businesses and workers or does it just allow foreign companies to benefit from a policy meant to prioritize Canadians?” he asked.“Great question,” Jeglic responded.Federal officials have confirmed that companies do not need any minimum level of Canadian ownership to qualify under the procurement rules.In a May 1 report to the Senate national finance committee, the Department of Public Works acknowledged the policy contains no Canadian shareholding requirement.“The policy does not establish a share ownership threshold,” the department stated.“The policy does, however, outline specific criteria for determining whether a company qualifies as a Canadian supplier.”According to the departmental report, Response To Questions, foreign-owned businesses can qualify by maintaining a Canadian office, employing at least one person locally and holding a GST registration number, provided they meet the policy's other requirements.The department defines a Canadian supplier as a business with an established and accessible Canadian location where it conducts ongoing operations.“‘Canadian supplier’ means a supplier that has a place of business in Canada where it conducts activities on a permanent basis that is clearly identified by name and is accessible during normal business hours,” the report stated.Businesses must also be registered in Canada, file Canadian taxes and maintain a registered Canadian address.The rules require suppliers to employ personnel or conduct day-to-day business activities in Canada.Companies are also restricted from subcontracting work outside the country in ways that leave little meaningful economic activity in Canada.The department said suppliers must not subcontract work to foreign companies or individuals in a manner that results in “minimal value-added activities being performed within Canada.”Despite those conditions, the policy does not distinguish between Canadian-owned businesses and foreign-owned corporations that meet the domestic operating requirements.That distinction has become a central concern for contractors seeking federal work.Jeglic said suppliers are looking for greater certainty about how the rules will be applied and what advantages Canadian businesses can expect when bidding on government contracts.“Suppliers are looking for clear explanations,” he told MPs.The complaints raise questions about whether Ottawa's procurement policy will direct more federal contracting dollars toward Canadian-owned businesses or allow foreign multinational corporations to compete for the same preferences.
