Impacts of Tariffs and Procurement Reforms
Impacts of Tariffs - Procurement Reforms
- Federal
- Prime Minister Carney and Premiers continue to work as a team to develop a united response to tariffs.
- No action on federal procurement has been taken at this point. Rumours that “Buy Canada” legislation will be introduced in fall.
- CUSMA will undergo a mandated joint review in 2026. Efforts to speed up this review in hopes it will end trade war.
- Newfoundland and Labrador
- Committed to reviewing and stopping immediately, procurement from the US where possible.
- Signed a MOU with New Brunswick to explore how to break down barriers.
- Insists on maintaining certain protectionist policies, including minimum processing requirements for the fishery, and labour agreements tied to hydroelectric projects.
- Prince Edward Island
- Limiting procurement with U.S. based companies, including canceling existing contracts.
- Passed legislation to eliminate unnecessary barriers to trade and labour mobility with reciprocating jurisdictions.
- Nova Scotia
- Limit access to provincial procurement for American businesses, including opportunities to cancel existing contracts and maintain the option to reject bids outright.
- The Houston government passed The Free Trade and Mobility within Canada Act earlier this year. Provisions include:
- goods manufactured and produced in a reciprocating province or territory will be treated the same as those produced locally in Nova Scotia
- goods manufactured and produced in a reciprocating province or territory will be treated the same as those produced locally in Nova Scotia
- New Brunswick
- Committed to signing no new contracts with American companies, and working with other Atlantic provinces to find new markets for items such as seafood and lumber.
- Has signed MOUs with Ontario, Manitoba and Newfoundland aimed at improving labour mobility.
- Recently announced the removal of five party-specific exemptions in relation to procurement, under the Canada Free Trade Agreement including Atlantic Lotto.
- Aside from encouraging people to buy local, there have been no major procurement changes.
- Quebec
- Penalty of up to 25 per cent on bids by American companies.
- Administrative and regulatory mechanisms are being strengthened to restrict access to tenders for American companies, while complying with existing trade agreements. Currently, none of these measures are in place yet.
- Issues at the Government Procurement Centre (CAG), under the Treasury Board
- The CAG is under investigation by the Auditor General regarding its governance and procurement practices.
- Significant tensions exist with the Ministry of Cybersecurity and Digital regarding the division of responsibilities for the procurement of group digital solutions.
- Lack of clear coordination is causing blockages and confusion over roles and responsibilities.
- Government tender processes are slowed down.
- An extreme climate of caution prevails among public managers.
- Delays are occurring in both adjudication and contract awarding processes.
There is high uncertainty for suppliers.
- Manitoba
- Prioritizing Canadian suppliers by amending the Government Purchases Act. Under the Buy Canadian Act, the province may give preferential treatment to Canadian suppliers when purchasing goods.
- Bill 47, the Fair Trade in Canada Act is designed to address interprovincial trade barriers, while Bill 42, the Buy Canadian Act, prioritizes Canadian businesses and workers, both of which were passed into law earlier this summer.
- Bill 42 includes –The Government Purchases Actis amended to establish a buy Canadian policy. Under the policy, preferential treatment may be given to Canadian suppliers when making government purchases.
- Signed MOUs this week with NB, SK, BC and PEI aimed at reducing trade barriers and improving labour mobility.
- Saskatchewan
- Dropped anti-tariff measures in June. Has returned to standard procurement process.
- Dropped anti-tariff measures in June. Has returned to standard procurement process.
- Alberta
- Opted for diplomacy over retaliatory measures. Walked back procurement policy excluding American companies in April.
- New Indemnification and Unlimited Liability Clause: The Government of Alberta has recently implemented new indemnification language in procurement contracts. These clauses often require vendors to assume unlimited liabilityfor direct and indirect damages, including third-party claims.
- Trade Agreements and Procurement Thresholds: There is a danger thatunder some of these agreements, Alberta would have to comply with obligations to treat out-of-province and international bidders equally, which could potentially constrain “Alberta-first” policies which are on the rise, as they are in other provinces.
- Economic Diversification and Alberta-Centric Procurement Priorities: The Government of Alberta is trying to align procurement with its economic diversification agenda, including innovation, agriculture, energy transformation, and digital government. There is more support for Alberta-based innovators, Alberta job creation tiebreakers (where benefit to the province is realized, it could break a tie in procurement contracting), and emerging policies that encourage engagement with Indigenous businesses.
- British Columbia
- Passed the Economic Stabilization (Tariff Response) Act which applies to B.C. government, health authorities and certain Crown corporation. Restrictions include:
- Must not include a U.S. supplier in any procurement unless the Deputy Minister to the Premier is satisfied it is necessary to meet operational requirements;
- Must not acquire goods or services under existing contracts with U.S. suppliers, where viable considering financial, legal or operational factors
- These procurement restrictions:
- Do apply to contracts for software subscriptions, licenses and related services
- Do not apply to Canadian subsidiaries of U.S. suppliers
- Premier Eby has signed trade agreements with Ontario, Manitoba, Yukon.
- Passed the Economic Stabilization (Tariff Response) Act which applies to B.C. government, health authorities and certain Crown corporation. Restrictions include: