Buy Local, By Law - Ontario Introduces "Buy Ontario Act"

On November 20, 2025, the Government of Ontario introduced Bill 72, the Buy Ontario Act, 2025, as the latest in a series of measures to favour Ontario businesses in public sector purchasing.

This Bill has important implications for all Ontario public and broader public sector entities and the companies that do business with them.

While the Bill does not impose specific "buy Ontario" requirements, it creates a framework for the Government to issue future directives that can restrict public sector procurement – including restrictions based on a vendor's location, or the place of origin of goods and services (e.g., Ontario or Canadian). Public sector entities are protected from certain legal proceedings when implementing these directives and may be subject to enforcement measures for non-compliance with the requirements.

We summarize some of the key provisions below.

Framework for Buy Ontario Directives

Bill 72 would permit the Management Board of Cabinet to issue directives to public sector entities – including Ontario government entities, "designated broader public sector organizations" (as per the Broader Public Sector Accountability Act, 2010), and any other entities as may be prescribed by future regulation. This coverage includes government ministries and agencies, hospitals, universities, colleges and other publicly-funded organizations.

Directives could specify procurement policies, procedures or standards, which may:

• require that preference be given to Ontario- or Canadian-made goods;
• require that preference be given to services provided in Ontario or Canada;
• impose measures to support Ontario businesses or promote Ontario or Canadian goods or services;
• impose measures to protect Ontario businesses by limiting eligibility to participate in public sector procurements;
• require implementation of vendor performance standards and practices;
• require new reporting or reporting procedures (e.g., this could involve authorizing specified persons, such as Supply Ontario, to require reporting from public sector entities); or
• impose compliance and enforcement measures on public sector entities and vendors (e.g., requiring vendors to procure Ontario-made goods or Ontario-located services).

As presently drafted, these directives can incorporate not only other Ontario policies or measures by reference (which we expect would include the policy restricting procurement from US businesses, or the Building Ontario Businesses Initiative elements of current procurement directives) but also policies or directives of other governments. This latter element may be a step towards harmonizing with other provinces and/or federal initiatives.

Public sector entities must ensure that third parties who manage their supply chains (e.g., group purchasing organizations) comply with the Bill's requirements.

Management Board of Cabinet may also delegate the power to issue directives.

All directives are to be publicly posted on a government website.

Enforcement and Compliance Reviews

If enacted, the Bill adds new enforcement measures (including funding consequences), notably:

• Deeming compliance with its requirements (including requirements of any directive) as a requirement of any agreement or other funding arrangement between the public sector entity and Ontario or an agent of the Crown in Right of Ontario.
• Permitting the Government to withhold funds if a public sector entity fails to comply with a requirement, with payment only when the entity complies – unless the fiscal year ends, in which case the funds will not be paid, and roll into the Consolidated Revenue Fund. Relatedly, the Bill requires the public sector entity to minimize the impact of any withdrawal of provincial funding on its provision of services to the public – although the extent to which this is feasible would obviously depend on the circumstances.
• Compliance reviews and public reporting.Public sector entities must cooperate with the reviewer and provide access to its records and other information. The reviewer will report on the investigation to the Minister of Public and Business Service Delivery and Procurement. Aside from directing the public sector entity to correct non-compliance, the Minister is then permitted to publicly publish (on a website) the report's findings (i.e., name and shame non-compliant organizations).

Other Laws, No Proceedings

The Bill includes provisions to protect the government and public sector entities, and their employees, officers, directors, agents or advisors, from liability for complying with its requirements, including its directives. Specifically, it would:

• Exempt public sector organizations from the Discriminatory Business Practices Act, to the extent complying with this new legislation and directives issued under it would be a discriminatory business practice under that Act.
• Extinguish any causes of action against any of the above persons in the execution of or compliance with this new legislation, or its regulations or directives.
• Remove remedies otherwise available in connection with any of the above, whether in contract, restitution, tort, misfeasance, bad faith, trust or fiduciary obligation, or any equitable remedy or statutory remedy.
• Bar proceedings and any cost awards directly or indirectly based on or related to the above, against any person noted above.

These limits apply to both proceedings in Ontario and to enforcement of judgments, orders or awards made outside of Ontario.

The only exceptions to the above are for:

• Applications for judicial review or claims for a constitutional remedy.
• Proceedings that the Crown may bring against any person.

Conclusion

While Bill 72 has only passed first reading, the current political and economic climate will likely result in its prompt passage. If passed, its impact will hinge on the directives and regulations that follow, and their interaction with existing procurement requirements and practices – including commitments under domestic and international trade agreements – as well as existing vendor contracts. Proactive assessment of these interactions will be critical to managing risk and ensuring alignment with both statutory and trade-related obligations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.