Government Operations Committee on May 26th, 2026

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Go ahead, Mr. Gasparro.

[Vince Gasparro, Liberal, Eglinton—Lawrence, ON]

Thank you, Mr. Chair.

Thank you, all of you, for being here.

Bank of Montreal economists estimate that a buy Canadian policy will add roughly $10 billion to the Canadian economy, which is about 0.3% year over year.

Is your department estimating similar numbers?

[Dominic Laporte]

In procurement here at PSPC, we don't do those forecasts. It would be more the Department of Finance that would be doing that.

What we're seeing from the interactions we have with the Canadian steel producers and the various suppliers is that the policy people are welcoming the policy and clearly saying that it's starting to have an impact. I'm not able to quantify it in the same way, but we're seeing very positive feedback provided by suppliers and Canadian associations of manufacturers.

[Vince Gasparro, Liberal, Eglinton—Lawrence, ON]

I'm glad you mentioned Canadian supply chains.

In an increasingly uncertain global economic environment, will the use of a buy Canadian policy make our supply chains more resilient and less dependent on external sources?

[Dominic Laporte]

That's an outcome of the policy.

Maybe in the past we had suppliers doing business with the federal government, and they were not necessarily looking at whether they could source the raw material or input from a Canadian source. There was no incentive to do so. They could decide to import raw material. Now there's clearly an incentive, if they want to get more points, if they want to be successful over and over again on their bids, to really make sure that they provide Canadian content and that they maximize that Canadian content.

By nature, the policy itself will drive Canadian supply chains and will make the Canadian economy much more resilient, just in terms of steel capacity. That's one factor.

When it comes to the IT industry, the digital industry, making sure that we keep this engineering capacity in Canada, that we keep R and D.... Those are all parts of buy Canadian criteria that will be driving that Canadian supply chain, as well as resiliency.

[Vince Gasparro, Liberal, Eglinton—Lawrence, ON]

I'm glad you mentioned Canadian raw materials. In this particular question, I'm specifically referring to aluminum, steel and wood as being at the forefront of our government's investment purview.

Can you tell us how investment in homegrown strategic sectors, such as aluminum, steel and wood, protects Canadian industries from trade shocks and strengthens our supply chains?

[Dominic Laporte]

The steel industry is a very capital-intensive industry, as you know. Especially when it's being closed out of other foreign markets, it needs to make sure that it can at least leverage its domestic market, that it can still keep the mills running and that it's able to at least provide enough supply in Canada so that when we're buying bridges or doing infrastructure or when DND is looking at defence projects, we're sourcing Canadian steel. In itself, that makes a huge difference.

[Vince Gasparro, Liberal, Eglinton—Lawrence, ON]

Because of the significant change the world is currently going through.... I'm trying to be diplomatic; it doesn't happen often, but it does happen.

How has the buy Canadian policy insulated some of our domestic companies from that change?

You touched on it a little earlier, but can you expand on it?

[Dominic Laporte]

I would say that the way we designed the buy Canadian policy does not exclude foreign companies. Our domestic companies, which are at issue in your question, can still bid on foreign opportunities—especially when they also have a presence outside Canada. I have to say that this has been very much welcomed by corporations and by Canadian suppliers.

I'm not sure, Levent, if you want to add anything to that.

[Levent Ozmutlu]

The only other thing I would add, in essence, is that we're ensuring that we're fully leveraging the capacities that exist in Canada. As industry has more insight into the types of procurements that are upcoming and the types of things that the government is purchasing, we believe that they will also make those investments in order to fully leverage this policy going forward.

[The Chair, Conservative, Kelly McCauley]

I apologize. That is our time.

Madame Gaudreau, you have the floor.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Thank you, Mr. Chair.

I've heard the word “preference” a number of times. That's not what we want to hear. We want to hear about predictability and a strategy. At this point in time, we can certainly prepare for a positive impact, but how will it be useful if we don't have a long-term vision?

I give the example of Europe because it has a long-term vision for its sectors. They aren't just trying to win the next election. We have to tell it like it is.

Do you have any discussions on certain issues or on a long-term strategy for the Canadian economy? Are you talking about that?

[Dominic Laporte]

The “buy Canadian” policy is part of an ecosystem, part of a range of measures. We are in charge of procurement, so we can talk about that. We see that the “buy Canadian” policy is starting to pay off. There have been contracts awarded in Quebec, for example. There is also a criterion that requires, for a contract involving steel, for example, that Canadian steel be used. The same goes for Canadian lumber and Canadian aluminum. That's the first part of the policy.

Then, under the second part of the policy, some of the points are allocated based on the percentage of Canadian content. Some might say that we are just prioritizing Canadian content and that its use is not mandatory, as is the case for wood and steel. However, if a supplier submits a bid without Canadian content, it will not win the bid. They will have a lot of trouble, because there will be a competitor who, in their bid, will propose using 50% Canadian content, for example.

That's what's starting to change. Basically, this is a revolution in government procurement.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

I would like someone to tell me that everyone is at the table and looking into it. That would reassure me, and perhaps my colleagues as well.

As far as labour is concerned, when a plant closes, people say they're going to do business with someone else, but there are still job losses. Afterwards, people will look to a foreign country. Some will say that it's Canadian content, that we have a free trade agreement, but it doesn't change anything for the plant. I'm thinking of Via Rail trains built in California, for example. We're just checking a box, but we don't need a seal of approval. That is what the Bloc is saying. It must not be a simple purchase preference, but a real national industrial strategy.

What do you think? I'll ask the other panellists the same question.

[Dominic Laporte]

The “buy Canadian” policy that we're implementing is a prime example. First of all—

[The Chair, Conservative, Kelly McCauley]

I have to interrupt. We are past our time. Please answer briefly.

[Dominic Laporte]

We work a lot with our colleagues in the provinces and territories, as well as with Crown corporations, to get them to apply it. This movement affects hundreds of federal institutions. We don't work in isolation.

[The Chair, Conservative, Kelly McCauley]

Thank you.

Go ahead, Mrs. Jansen.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

What is your department's definition of “Canadian” under this buy Canadian policy?

[Dominic Laporte]

The definition of Canadian suppliers is to have a permanent establishment in Canada, to pay taxes in Canada, to create employment in Canada or to have a place of business in Canada. Those are key criteria. This is to drive not only—

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Thank you. I'm sorry; I have lots of questions.

Does the policy require a Canadian head office, yes or no?

[Dominic Laporte]

The policy does not require a Canadian head office.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Could a company that has a Canadian office or post office box but that operates primarily outside of Canada count as Canadian, yes or no?

[Dominic Laporte]

In all likelihood, they're going to be excluded.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Could a company that's 100% foreign-owned still qualify as Canadian?