OTTAWA – A growing chorus of Canada’s closest trade partners are calling out Prime Minister Mark Carney’s new Buy Canadian procurement policy, saying it flouts promises Ottawa made in trade pacts to give them access to government contracts.

A U.S. representative raised the issue with the World Trade Organization’s procurement committee in March, according to the organization’s account of the closed meeting. The Americans aren’t the only ones complaining. The European Union, Japan, New Zealand, Norway, Switzerland and the United Kingdom have all spoken against the policy at the WTO. 

“According to these parties, the recent developments raised concerns regarding whether Canada was acting in accordance with its commitment… to guarantee non-discriminatory access to other parties,” the WTO Secretariat said in a public meeting summary.

Australia has also flagged the program as a concern, The Logic has confirmed.

The WTO declined to provide more context about the complaints, and U.S. Trade Representative Jamieson Greer’s office did not respond to a request for comment, though he flagged the Buy Canadian policy as an irritant in a recent report to U.S. Congress and President Donald Trump. 

“U.S. companies have reported concerns regarding additional barriers to compete for federal contracts in Canada, including being forced to share information about their boards of directors and prove their Canadian subsidiary’s independence from the U.S. parent company,” Greer said in the annual report on foreign trade barriers.

The objections of countries other than the U.S. may be of greater concern for Canada, however, as the country looks to diversify its trade and reduce its economic reliance on its southern neighbour. The Liberals pitched the policy during the last election in response to trade aggression from the Trump administration as a way to shore up domestic demand for Canadian businesses dented by tariffs put on exports to the U.S. 

Carney and Procurement Minister Joël Lightbound announced details of the protectionist procurement policy in December. It gives preference to companies with a presence in Canada when awarding federal contracts worth more than $25 million, and requires firms that do business with the government to use Canadian-produced steel, aluminum and wood products for large federal construction and defence projects. 

The government plans to extend the Buy Canadian policy this spring to contracts valued over $5 million sometime this spring.

A few weeks before the announcement, it changed Canadian International Trade Tribunal rules to prevent companies abroad from challenging the preferential treatment given to Canadian firms. That means it will be up to other governments to advocate for their businesses’ access to Canadian contracts through the mechanisms in their trade agreements. 

“You wouldn’t need to create these sorts of protections for yourself if what you were doing was totally consistent with the trade rules,” said Timothy Cullen, a public procurement lawyer with McMillan LLP, of the trade tribunal amendments.

Some countries have a greater right to their grievance than others, he said. Canada’s agreement with the EU, for example, has clear restrictions on giving preferential treatment to domestic procurement partners, he said. “This is not something that is allowed under the agreement,” said Cullen, who co‑leads McMillan’s government and public policy group. 

The U.S. doesn’t have the same kind of procurement pact with Canada, but is covered by the WTO’s procurement agreement, which has a more limited scope.

The federal Procurement Department didn’t immediately respond to a request for comment. However, Canada’s representative at the WTO told the procurement committee on March 4 that Canada is “among the countries most exposed to the restructuring of global trade,” and that the policy responds to “exceptional challenges” for trade-dependent sectors with highly integrated supply chains. The Buy Canadian policy still allows foreign firms to bid on government contracts, it noted. 

Those trading partners’ concerns may be overblown, said Nicolas Lamp, director of Queen’s University’s Institute on Trade Policy. “When you announce a Buy Canadian policy, it always kind of strikes fear in your trading partners, and it sets a particular tone,” he said. 

Canada’s obligations boil down to providing reciprocal access to contracts that trading partners afford Canadian firms, Lamp said. Because other countries have protectionist procurement policies of their own, there’s room for flexibility for the government to prioritize Canadian bidders without running afoul of the rules, he added. The U.S. has had its Buy American regulations since the 1930s, for example, and the EU recently introduced something similar called the Industrial Accelerator Act to boost demand for low-carbon technologies and products made in Europe. 

The European program lets Canadian firms bid on contracts, but only to the extent that the Canadian government does the same for EU businesses, Lamp said. That means Canada has an incentive to keep its procurement market open. 

Cullen, the procurement lawyer, noted that the government can also be exempted from its trade obligations on national security grounds, which would give Ottawa the ability to waive the rules on national defence contracts.