Federal 'Buy Canadian' policy shuts out small businesses, lobby warns
Small-business group tells Parliament the $5 million contract threshold is too high, limiting access to federal procurement.
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The Canadian Federation of Independent Businesses told Parliament on Wednesday that the federal government's new "Buy Canadian" procurement policy will lock out most small firms despite pledges to support them.
The policy, taking effect June 15, restricts government contracts over $5 million to Canadian suppliers — a measure meant to shield domestic industries during the Trump tariff crisis. But that threshold is too high, CFIB director Michelle Auger said, because most small businesses can't compete for contracts that large.
"Small firms that create Canadian jobs could be excluded from Buy Canadian procurement opportunities," Auger told a House of Commons committee. She urged the government to "de-bundle" large contracts, splitting them into smaller chunks that regional firms could bid on individually.
Small businesses have long griped that federal procurement favours large companies with the resources to navigate the labyrinthine bidding process. The current policy compounds that frustration, CFIB members told her, because it focuses narrowly on raw-material sourcing rather than Canadian ownership.
Both companies backed the policy "in theory," Auger said, but found the approach overlooked the economic value smaller operations generate. She suggested eligibility should focus on whether a business is Canadian-owned, regardless of where inputs come from.
The government launched "Buy Canadian" as a trade-war response, giving Canadian bidders preference on defence, pharmaceutical and infrastructure contracts. Treasury Board has extended the rules to grants and contributions, affecting 35 Crown corporations as well.
Small-business frustration with federal procurement shows no sign of easing.