Buy Canadian, Read the Fine Print
Reshaping procurement to build domestic muscle
đŻ Three-Shot Burst
Ottawaâs new Buy Canadian Policy gives explicit preference to Canadian suppliers and Canadian content in large federal procurements, starting with contracts over $25M and expanding to $5M+ by spring 2026. It focuses especially on construction, defence and major infrastructure, requiring Canadianâmanufactured or processed steel, aluminum and wood in those projects. The goal is to use tens of billions in federal and federally funded projects as a lever to support domestic firms and workers, and to build more resilient, less tradeâexposed supply chains â it is industrial policy via procurement.
The fine print: The policy hinges on what counts as âCanadian contentâ and real footprint in Canada â manufacturing, R&D, employment, ownership structures, etc. â which is complex in global value chains.
There are already debates about loopholes: multinationals could structure operations to appear Canadian, while some genuinely Canadianâcontrolled firms with global operations might get disadvantaged if rules are crude. Defence Procurement Secretary of State Stephen Fuhr appears to favour a wide definition for Canadian firms.
Critics argue: Prioritizing Canadian content can reduce competition and force departments to choose more expensive or subâoptimal bids, especially in sectors where there are few domestic suppliers at scale.
Legal and procurement advisors are already warning that âobligation to buy Canadianâ will constrain valueâforâmoney decisions and may slow projects if Canadian capacity is insufficient or fragmented.
Canada is also bound by multiple trade agreements (CETA, CPTPP, WTO GPA, CUSMA), and while there are carveâouts and flexibilities, a hard bias toward domestic content risks disputes or reciprocal restrictions from trading partners. Business groups and trade lawyers have raised concerns that if Canada leans too far into âBuy Canadian,â other countries may shut Canadians out of their public procurement markets or tighten their own âBuy American/Buy Nationalâ regimes further.
Bottom Line: Politically the new policy looks like a paradigm shift; technically itâs a targeted layer on top of existing rules â at least for now.
It will incentivize more domestic jobs and capacity, but probably cost more per unit with each project, cutting to the heart of every buy vs. build tradeoff.
Once you tie money to a label like âCanadianâ, every smart operator optimizes to the label, not the underlying economic objective. No matter what, this is the year Canada realized it needs sovereign tech and must stop renting its future:
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Canadaâs Defence Industrial Strategy must include procurement pathways for tech
Canadian firms can design, build, and deploy a made-in-Canada network of inexpensive, mass-produced, unmanned submersibles capable of monitoring the Arctic at a scale no legacy submarine fleet could match. Thousands of autonomous undersea vehicles patrolling our northern approaches would provide the surveillance backbone our navy long ago lost.
The technology exists today across Canadian startups, research labs, and dual-use innovators. Whatâs missing is the procurement pathway.
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Dominion Dynamics is expanding our team and weâre looking for ambitious Canadians who want to build sovereign technology for the future of national defence.
đ¤ Deal Corner
Is a Canadian defence giant possible?
Canada has never built a defence giant of its own. For decades, Canadian military firms have fed parts and services into American and European weapons programs â a model that suited modest budgets and a comfortable reliance on the United States.
Canada has failed to sustain its own prime system integrator due to inadequate domestic demand and inconsistent political support.
Longtime IQT investor George Hoyem believes Canada is one of the most dynamic markets for defence innovation.
Dominion Dynamics may be well-positioned to become Canadaâs first neo-prime, while Canadian defence and aerospace firms face greater competition in the US.
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âď¸ Combat Readiness
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Incredible breakdown of the optimization paradox here. Once procurement rules get tied to labels like 'Canadian content,' firms start gaming the definition instead of building real industrial depth. I saw this play out in some regional tech procurment initiatives back in 2018 where companies would setup minimal footprints just to check boxes. The insight about needing sovereign tech but paying the premium per unit is the real traedoff nobody wants to name publicly.