Bill 72, “Buy Ontario” and new domestic procurement policy: what procurement professionals need to know
Most public procurement professionals in Ontario will know that, the Ontario government passed Bill 72 — the Buy Ontario Act (Public Sector Procurement), 2025 — in December of 2025.. This new legislation gives the province the power to issue directives to almost all public organization in Ontario, with an objective of using public procurement as an economic tool to support domestic industry and build resilience in the Ontario economy.. On March 30th, the government provided further detail on its expectations for local procurement initiatives by issuing two new directives under the Act. (ontario.ca)
What is Bill 72?
Bill 72 came into force on December 11, 2025 when it received Royal Assent and was enacted as Chapter 27 of the Statutes of Ontario, 2025. (ola.org)
While the legislation itself does not contain substantive direction on how public procurement should be conducted, it empowers Management Board of Cabinet to issue binding directives that require public sector entities to comply with specified procurement policies, procedures, or standards. The Act also includes robust enforcement tools, including:
- The power to withhold funds from public sector organizations that fail to comply with procurement directives; and
- Authority for the Minister to order compliance reviews and corrective actions when necessary (ontario.ca)
The Act also allows the Ontario government to consolidate previously issued domestic procurement policies including the Building Ontario Initiatives Act (which was repealed on March 30th, 2026) and the Procurement Restriction Policy, which limited Ontario organizations’ ability to award contracts to U.S. businesses.
Importantly, the Act is not limited to provincial ministries. It applies broadly to public sector entities, including government agencies, designated broader public sector organizations and municipal organizations. Future regulations may expand this to include other organizations as well. (ontario.ca)
The New “Buy Ontario” Procurement Directives
The government recently issued two new directives under the Act. Coming into effect on April 13, 2026, these directives provide more information on how public organizations should prioritize Ontario and Canadian businesses.
- The Buy Ontario Procurement Directive applies to government ministries, agencies and certain Crown corporation.
- The Municipal Buy Ontario Procurement Directive applies to municipalities, local boards and municipal services organizations.
Both directives apply to the procurement of fleet vehicles and capital infrastructure. Subject to certain exemptions and qualifications, all covered Ontario public organizations must:
- Purchase or lease Ontario-made new light-duty passenger vehicles or where an Ontario-made vehicle is unavailable, purchase or lease from an Ontario vehicle producer.
- Comply with the procurement evaluation methodologies designed to maximize Ontario and Canadian made goods and services as part of capital infrastructure projects, including submission of a Domestic Supply Chain Plan by bidders.
For organizations covered by the Buy Ontario Procurement Directive, in addition to the fleet and capital construction policies, they must also:
- Based on procurement value, give preference to Ontario or Canadian businesses or apply weighted domestic evaluation criteria for all goods and services (i.e. not just light-duty vehicles or for capital infrastructure).
- Subject to certain exceptions, restrict U.S. businesses from participating in procurement opportunities.
Where applicable, both directives align the selection process to the province’s trade treaty thresholds, thus ensuring that the policies align with commitments made to its trade partners, both domestic and international.
The Directives provides further detail on exemptions to the domestic procurement policies and criteria for what constitutes Ontario and Canadian businesses and products.
“Buy Ontario”: What’s Next?
Procurement teams will need to consider:
- Policy alignment: How existing procurement policies or bylaws align with the new Buy Ontario directives and ensuring that new procurement projects incorporate the right evaluation strategy that complies with the relevant directive
- Supplier markets: Whether local companies can meet specifications and how sourcing strategies will need to evolve
- Documentation and transparency: Enhanced record-keeping to demonstrate that buying practices comply with provincial obligations
As public sector entities review the new “Buy Ontario” policies, , training, compliance tools, and well-structured procurement documents that reflect the new directives will be essential for effective implementation.
Building Local Economic Value
The Buy Ontario Act and the recently promulgated directives reinforce the idea that public procurement can be a tool for economic growth, not just a transactional process and reflects a wider shift across Canada and the globe to domestic procurement policies To adapt and keep pace, public organizations should re-think procurement through a broader lens, by supporting local SMEs, fostering workforce development, and boosting supply chain resilience while still respecting principles of fairness and competition inherent contained in broader procurement policy and at common law. (ola.org)
Buy Ontario Act (Public Sector Procurement), 2025 (Bill 72) (ontario.ca)
Legislative Assembly of Ontario – Bill 72 official legislative page (ola.org)
