Foreign-owned companies can qualify for federal contracts under Ottawa's Buy Canadian policy despite government claims the program will strengthen domestic manufacturing and protect Canadian jobs, according to federal documents.Blacklock's Reporter says internal records from Industry Minister Mélanie Joly's department acknowledge the importance of building Canadian industrial capacity, while separate documents show businesses with 100% foreign ownership can still qualify as Canadian suppliers.A heavily censored, three-page departmental memo dated May 26 described strengthening domestic industry as the key measure of whether the federal government's procurement policy succeeds.“The ultimate test of Buy Canadian will not simply be whether public procurement rules change but whether public investment leaves Canada with stronger domestic industrial capacity, greater strategic resilience and capabilities the country can rely on during future economic or geopolitical shocks,” said the memo, Meeting Note For The Deputy Minister.The document argued federal purchasing decisions should play a greater role in supporting Canadian businesses and reducing the country's vulnerability to international economic disruptions.“Buy Canadian appropriately recognizes federal procurement can no longer be treated solely as an administrative or compliance exercise,” said the memo.“In an environment increasingly shaped by geopolitical competition, supply chain vulnerabilities and industrial policy, procurement is becoming one of the government’s most important economic and strategic policy levers to drive innovation, strengthen domestic industrial capacity, support Canadian firms and build long term resilience.”However, documents submitted to the Senate national finance committee reveal the policy does not require companies to have Canadian ownership.In a May 4 report titled Response To Questions, the Department of Public Works confirmed even businesses entirely owned by foreign interests could qualify for preferential treatment under the program.“The policy does not establish a share ownership threshold,” the department wrote.“The policy does, however, outline specific criteria for determining whether a company qualifies as a Canadian supplier.”.According to the department, companies can qualify by maintaining a Canadian business address, registering and filing taxes in Canada, and employing personnel or conducting daily business activities in the country.The definition does not require Canadian shareholders or majority Canadian ownership.“Canadian supplier” means a business with a permanent Canadian location that is identifiable by name and accessible during regular business hours, according to the department.Companies must also meet restrictions on subcontracting work outside Canada.“The supplier has to meet the following criteria: It is registered and files taxes in Canada, it maintains a registered address in Canada and employs personnel or conducts day to day business activities in Canada, and it will not subcontract work to non-Canadian suppliers or individuals located outside Canada in a manner that results in minimal value-added activities being performed within Canada,” the department wrote.The criteria mean foreign-owned corporations with Canadian operations can qualify under the policy, provided they meet the government's requirements.Prime Minister Mark Carney announced the Buy Canadian initiative September 5, 2025, promoting it as part of his government's commitment to “build Canada strong.”The policy was presented as a way to use federal purchasing power to support Canadian businesses and strengthen the country's economy.However, a Treasury Board report issued December 16, 2025, confirmed individual federal departments retain considerable discretion over how the policy is implemented.“Departmental managers are responsible for assessing how the Buy Canadian policy can be effectively integrated into the design and delivery of individual programs,” said the report, Extending The Buy Canadian Policy To Grants And Contributions Programs.The documents highlight the difference between the government's stated objective of strengthening Canadian manufacturing and procurement rules that permit foreign-owned businesses to receive Buy Canadian consideration.The Industry Department's own memo identified the development of stronger domestic factories, industrial capabilities and supply chains as the ultimate measure of the policy's effectiveness.
