OTTAWA — BluWave-ai CEO Devashish Paul had waited a long time for Canadian demand to catch up with his company’s technology. That’s why he was so demoralized when the City of Ottawa started testing software from a German competitor before Canadian companies had a chance to bid on the opportunity.

Founded in 2017, Paul’s Ottawa-based firm uses artificial intelligence to help customers surf the unpredictable peaks and valleys of local power consumption to minimize their costs and carbon footprint. The technology is particularly useful for managing the cost of charging a large number of electric vehicles, but Canadian public transit operators like Ottawa’s OC Transpo have only added EVs to their fleet relatively recently.

The city’s new ABB EV chargers came with software from a German partner-firm called The Mobility House. When Paul asked the city if he could also run his software in the depot until it issued an official request for proposals, the city turned him down. A year later, Ottawa put out the tender with no preference given to Canadian companies, but Paul said the city assured him 99 per cent of the municipality’s contracts go to Canadian suppliers. 

The only problem: according to Paul, the city defines “Canadian” as any company with a Canadian address, including those headquartered in other countries. “They needed to go with some definition, and that’s what they have used—until another definition comes up,” said Paul.

Down the street from Ottawa City Hall, the federal government is working out a fundamental question: what does it mean to be a Canadian company? Whatever definition it settles on will serve as the foundation of the country’s Buy Canadian strategy, as well as a blueprint for provinces and cities to follow. The answer won’t come easily, as smaller domestic companies worry they could be boxed out by established multinationals if the government grants Canadian status to large foreign firms that set up shop here.

For now, the federal government determines a company’s Canadian credentials simply by asking whether it has a “clearly identified” permanent address in Canada accessible during normal business hours. Under the new policy, though, companies will need to have a “real presence,” in Canada, “not just a shell company,” Prime Minister Mark Carney said at a press conference Monday in Fredericton.

Carney’s Buy Canadian strategy would see public servants pick Canadian firms by default whenever a government department, agency or Crown corporation spends money, he said. “In those cases when domestic suppliers aren’t available, purchases will be required to include Canadian content or to be sourced from trusted partners,” Carney said. Exceptions would require ministerial approval, he said. 

The government’s goal is to spur domestic demand for Canadian products and help the domestic economy grow, but some players in the innovation economy believe that can only be done by prioritizing Canadian-owned businesses. Otherwise, established foreign players will have the advantage. “They have been at the table for a long time, and they will push back significantly on what it means to be a Canadian company,” said Dana O’Born, Council of Canadian Innovators’ vice-president of strategy and advocacy. 

The industry group puts particular emphasis on keeping intellectual property in Canada, but said the government should develop the new definition in partnership with the Canadian companies it hopes to support. These conversations “can’t be done behind closed doors,” O’Born said. 

The Buy Canadian policy could make the federal government a strong anchor customer for Canadian firms, said Abdullah Snobar, executive director of Toronto Metropolitan University’s tech incubator DMZ, but only if the government is careful not to leave loopholes that let foreign firms benefit. “We will certainly need to make sure that this is a true and proper Buy Canadian policy that would actually benefit Canadians and Canadian companies and Canadian employees,” he said. 

The ultimate definition will likely depend on exactly what the government hopes to achieve. The U.S., which has had a “Buy American” policy since 1933, focuses on where goods are made and where the parts come from as a way to boost jobs. Generally, to be considered a U.S. good, it has to be manufactured in the U.S. and at least half of the cost of the components in it has to go to American sources. The U.S. has also put “Buy American” conditions on federal funding agreements for things like infrastructure to increase the demand for domestic manufacturing, just as Canada hopes to do.

That approach could make sense as Canada looks to drive down unemployment brought on by U.S. tariffs. The budget lists “procurement supports” as one of the ways the government hopes to support tariff-affected industries. 

For Paul at BluWave-ai, the stakes are high. Every contract that goes to a foreign competitor makes that competitor stronger, he said, making it harder for him to sell to other customers in Canada and around the world. Without Canadian customers, he said, his firm might as well follow the money abroad. 

He would ideally like his company to grow in Canada, and to sell his product globally. “We’re kind of at that point where either we’re going to have a path to do that, or it’s going to be difficult,” he said. He fears without a clearer policy, Canadian-born firms will struggle to compete for government contracts.

Before he can tell whether the Buy Canadian policy might pave the way, he’ll need to see how exclusive it actually is.