A fresh study from the Montreal Economic Institute reveals that Canada’s federal 'Buy Canadian' policy could lead to an increase in expenditures on major infrastructure projects by more than $12 billion per year. This potential financial burden arises from the preference for domestic goods, which, while aimed at bolstering the national economy, may inadvertently inflate costs significantly. The policy seeks to ensure that Canadian taxpayers receive better value by supporting local industries, yet the implications on public spending could be profound.

In the comparative scope of procurement across the Organization for Economic Co-operation and Development (OECD) countries, public procurement accounted for 12.9% of GDP in 2021. Canada’s figure was notably higher, at 13.4%, indicating that government purchases are a crucial component of the Canadian economic landscape, exceeding the OECD average. This statistic underlines the significant role that governmental expenditures play in the Canadian economy and emphasizes how changes in procurement policies can have far-reaching effects on overall economic health.

The study also notes a shift in Canada’s approach to public procurement in light of trade tensions with the United States, leading the country to engage in procurement more cautiously. As the government now embraces the 'Buy Canadian' mandate, concerns are raised regarding the balance between protecting domestic jobs and the risk of increased costs to taxpayers. The ramifications of procurement protectionism could create a scenario where spending efficiencies are sacrificed, ultimately affecting the fiscal landscape for Canadian citizens and the economy as a whole.