Made In Ontario, By Mandate: Decoding The 2026 Buy Ontario Procurement Directive

On March 30, 2026, the Government of Ontario released procurement directives under the Buy Ontario Act (Public Sector Procurement), 2025 that fundamentally reshape how public sector entities in the province procure goods and services. Effective April 13, 2026, the Buy Ontario Procurement Directive (the Directive) consolidates the Building Ontario Businesses Initiative (BOBI), the Procurement Restriction Policy, and new requirements for two strategic categories — capital infrastructure and fleet vehicles — into a single, binding instrument.

1. Scope and application

The Directive applies to two broad categories of public sector entities:

1. Government entities, which include all ministries, all provincial agencies and all Crown corporations, including Ontario Power Generation Inc. and each of its subsidiaries (OPG), and the Independent Electricity System Operator (IESO).
2. Designated broader public sector organizations (BPS entities) within the meaning of the Broader Public Sector Accountability Act, 2010.

No public sector entities that fall within the categories above are exempt, though an exception exists for emergency procurements addressing urgent, unforeseen situations. The Directive does not prevail over legislation, but where it conflicts with other procurement directives, the Directive prevails. For example, any BPS entities that were governed by the Broader Public Sector (BPS) Procurement Directive dated April 1, 2024 must still adhere to such directive, but if there is a conflict, the Directive will govern.

The requirements apply to new procurements that have not been issued as of the date the applicable requirements take effect.

2. Building Ontario Businesses Initiative (BOBI)

Pursuant to section 4.2 of the Directive, BOBI applies to all procurements for goods and services that are not covered by the strategic categories of fleet vehicles and capital infrastructure. The BOBI strategy provides that Government entities and BPS entities, to the extent possible, shall give preference to Ontario and Canadian businesses for procurements under a monetary threshold of CA$368,000, and above such threshold give preference to Ontario’s trading partners, with weighted domestic criteria applied in procurement evaluations. For procurements with an estimated value of CA$50 million or more, government and BPS entities must also include an Industrial Regional and Technology Benefit requirement for vendors in specified sectors.

The requirement to give preference to Ontario businesses in the lowest value monetary threshold of the BOBI strategy does not apply to a good or service procured for commercial sale or resale, the services of a lawyer, paralegal, or notary public, the services of an expert witness in a court or legal proceeding, or a good or service that is not available from an Ontario business.

3. Procurement restriction policy: US businesses

The Directive also mandates (at section 4.3) compliance with the Procurement Restriction Policy, which has been in force since March 4, 2025. This policy restricts United States businesses from accessing Ontario public-sector procurements. The policy applies to all new procurements of goods and services at any value, regardless of procurement method — invitational, open competitive, or non-competitive. It does not apply when government and BPS entities use an existing Vendor of Record arrangement or other available arrangements, or to contract extensions included in the original agreement. However, it remains unclear how the Directive applies to processes designed to “refresh” existing Vendor of Record Arrangements.

Procuring from a US business is permitted only where it is the sole viable source and the procurement cannot be delayed, or, for services, where the business commits to having at least 90% of staff located in Canada — a new exception under the Directive. Regardless of value, deputy minister or CEO approval is required, with BPS entities subject to a similar requirement.

4. Strategic category: Fleet vehicles

The fleet vehicle requirements leverage public sector purchasing power to support Ontario's automotive industry, requiring government and BPS entities to purchase or lease vehicles manufactured in Ontario or from original equipment manufacturers operating in the province. These requirements apply to all new procurements of light-duty passenger fleet vehicles with a Gross Vehicle Weight Rating (GVWR) of 4,500 kilograms or less, regardless of value or procurement method. The Directive establishes a hierarchy of preference for fleet vehicle procurement. Government and BPS entities must first purchase or lease a Made-in-Ontario Fleet Vehicle. If a Made-in-Ontario Fleet Vehicle is unavailable or not operationally feasible, the entity must then purchase or lease a new vehicle from an Ontario Vehicle Producer. Only if both options are unavailable or infeasible may the entity consider alternative acquisition strategies, documenting the rationale and obtaining appropriate approval.

The fleet vehicle requirements are subject to following exceptions:

1.  existing contracts executed prior to the Directive's effective date, contract extensions included in the original agreement or short-term leases up to 12 months;
2. vehicles that are physically modified or upfitted for an intended operational use or function;
3. vehicles purchased for covert or surveillance purposes;
4.  vehicles with a GVWR greater than 4,500 kilograms, or used vehicles.

Additionally, the BOBI requirements do not apply to fleet vehicle procurements.

5. Strategic category: Capital infrastructure

The capital infrastructure requirements are the Directive's most complex component, aimed at maximizing domestic content in infrastructure procurements while maintaining value for money. Capital infrastructure procurements encompasses construction, fixtures, furniture and equipment incidental to facility construction and required to support operational readiness, and transit fleet vehicles including rolling stock and buses. The requirements do not apply to OPG and IESO procurements or procurements for medical equipment, information technology, items acquired solely for ongoing operational purposes or routine maintenance unless it involves structural renovation.

Entities must require vendors to submit a Domestic Supply Chain Plan (DSC Plan) identifying the source of each major good and service, with "major goods" including structural materials, building envelope components, mechanical and electrical systems, specialty items, fixtures, furniture, equipment and transit fleet vehicles. The Directive prescribes two potential evaluation approaches and recommends the entity choose the approach that best supports the objective of the capital infrastructure component of the Directive¹:

• an "Evaluated" approach applying a 10% evaluation advantage or score allocation favoring domestic content, with a preferential award mechanism where a vendor's DSC Plan score is at least 50% higher, bid price is within 10%, and the completion schedule is no more than 10% longer; or
• a "Commitment" approach requiring vendors to commit to meeting or exceeding a specified domestic content proportion as part of the procurement. The specified proportion may be any percentage of the total estimated procurement value that the entity determines would maximize the use of Ontario or Canadian-Made Goods and Services.

An alternative to the DSC Plan may be used where it is not feasible for suppliers to provide one given the procurement model adopted by the purchasing authority, provided such an alternative advances the Directive's objectives and appropriate approval with documented rationale is obtained.

6. Comparative context

Ontario's Directive sits within a broader national trend. The federal Buy Canadian Procurement Policy Framework requires, among other things, domestic steel, aluminum and wood in construction and defence projects at or above CA$25 million and prioritizes Canadian suppliers in strategic procurements valued at CA$5 million or more (effective spring 2026). Québec has adopted a procurement strategy with measurable domestic content targets through 2026, including a possible 10% preference for Québec or Canadian value added. British Columbia, by contrast, does not operate a formal geographic preference regime. A number of local (regional and municipal) governments across the country have also adopted a broad range of local procurement policies and programs.

7. Key takeaways

The Government of Ontario’s stated aims in adopting the Directive are to protect, and build Ontario's economy and supply chain resilience, and the province's direction is clear: preference is to be given to Ontario and Canadian goods and services in public-sector procurements. The key takeaways are as follows:

1. The Directive consolidates existing procurement initiatives into a single instrument, providing a unified framework for domestic preference obligations.
2. Procurements for capital infrastructure and fleet vehicles must include domestic content requirements by way of domestic supply chain plans and vehicle sourcing preferences, subject to limited exceptions, including a value-for-money exclusion for capital infrastructure and fallback options for fleet vehicles.
3. US businesses remain restricted from accessing provincial procurements under a framework that now includes a new exception for service procurements where 90% of staff are located in Canada.
4. BOBI ensures that goods and services procurements outside the strategic categories include domestic preference obligations with thresholds aligned to trade agreements.

The new Directive raises several considerations for stakeholders. Public sector organizations face significant added administrative work, including preparing revised procurement policies and solicitation documents, applying new evaluation criteria and confirming supplier eligibility. Bidders will similarly need to invest additional time assembling documentation such as evidence of eligibility and DSC Plans.

Footnote

1. See Section 4.4.2 of the Directive. The objective of the Capital Infrastructure component of the Directive is to maximize the use of Ontario-Made and Canadian-Made Goods and Ontario and Canadian Services in procurements covered by the directive, while maintaining value for money for Ontario and the timely delivery of infrastructure projects. ↩

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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.