The Province of Ontario has released its final Buy Ontario procurement directives, bringing new requirements for municipal purchasing of light-duty fleet vehicles and capital infrastructure goods and services into effect. Good Roads welcomes the Province’s commitment to strengthening Ontario’s domestic supply chains and supports the broader objectives of the Buy Ontario Act. This update summarizes the key changes and highlights areas where Good Roads believes additional guidance would support municipal implementation.

Background

In February 2026, Good Roads submitted detailed feedback to the Ministry of Public and Business Service Delivery and Procurement (MPBSDP) in response to a provincial consultation on new procurement policies to be established under the Buy Ontario Act (Public Sector Procurement), 2025. The consultation proposed requirements for municipal purchases of light-duty fleet vehicles and goods and services in capital infrastructure projects.

Good Roads’ submission expressed support for the Province’s economic objectives while raising nine specific recommendations to ensure the policies would be workable for Ontario’s diverse municipal sector.

In early April, the Province released the Municipal Buy Ontario Procurement Directive alongside two operational guides: one covering fleet vehicles and one covering capital infrastructure. These documents establish the policy framework municipalities must now follow. The guides can be accessed on the Supply Ontario website.

What’s Changing for Municipalities

The new directives introduce requirements across two procurement areas. The effective dates vary by entity type.

Fleet Vehicle Procurement

Effective April 13, 2026 for municipalities (June 1, 2026 for local boards and municipal services corporations)

Municipalities must now follow a prioritized sequence when purchasing or leasing new light-duty passenger fleet vehicles. The steps are:

Step 1: Made-in-Ontario Vehicles (MIO): Vehicles manufactured in Ontario, identified by the number “2” as the first digit of the Vehicle Identification Number (VIN). Examples currently include Chrysler Caravans, Pacificas, certain Chevrolet Silverado Crew Cabs, Honda CR-Vs, and Toyota RAV4 Hybrids.

Step 2: Ontario Vehicle Producers (OVP): If a Made-in-Ontario vehicle is unavailable or not operationally feasible, municipalities must next consider vehicles from OEMs with at least 1,500 annualized jobs in Ontario. Current examples include Ford, GM, Honda, Stellantis, Toyota, and Volkswagen.

Step 3: Alternative approaches: Only if neither of the above can meet operational needs may municipalities consider other options, with documented rationale and appropriate internal approval.

The policy applies to all new competitive and non-competitive procurements regardless of value, including purchases and leases. It does not apply to specialty vehicles (ambulances, school buses, police cruisers), vehicles over 4,500 kg GVWR, short-term leases up to 12 months, or used vehicles.

Capital Infrastructure Procurement

Effective May 15, 2026 for municipalities (June 1, 2026 for local boards and municipal services corporations)

Municipalities must now require vendors to submit a Domestic Supply Chain Plan for all new capital infrastructure procurements. This applies to construction projects, transit fleet vehicles (buses, rail), and fixtures and equipment that are part of a construction contract — at any dollar value.

The plan requires vendors to identify the origin (Ontario, Canadian, or other) and dollar value of each major good and service. Major goods are defined broadly and include structural materials (concrete, steel, lumber), building envelope components, HVAC systems, elevators, generators, and transit fleet vehicles.

Municipalities must apply one of two approaches to evaluate these plans: an evaluated approach (where the plan contributes to bid scoring through a 10% evaluation advantage to the highest Ontario content bidder) or a commitment-based approach (where vendors must commit to a minimum percentage of Ontario or Canadian content as a mandatory eligibility requirement).

A value-for-money exclusion is available in limited circumstances where a detailed market assessment demonstrates that applying the requirements would increase procurement costs by 25% or more. This exclusion requires appropriate internal approval and documentation.

The policy does not apply to medical equipment, information technology, furniture and equipment acquired solely for ongoing operational use after a facility is complete, or routine maintenance and repair (unless it involves repairing the physical structure).

Ongoing Concerns

While we are encouraged by the steps the Province has taken, several important gaps remain. Good Roads will continue to advocate on behalf of our members on the following issues and looks forward to further engagement with the Ministry.

Fleet Vehicle Policy

• Eligibility lists are illustrative, not official: The vehicle examples in the fleet guide are explicitly noted as non-exhaustive and may change as manufacturing evolves. There is no mechanism for regular updates or a definitive official list. Municipalities searching for certainty — particularly around pickup truck availability, which is essential for public works operations — are directed to rely primarily on vendor attestations. Good Roads continues to recommend that the Province publish and maintain a comprehensive, regularly updated eligibility list.
• Standardized criteria for “operational infeasibility” are absent: While the guide provides a definition, municipalities still apply it subjectively on a case-by-case basis. Without common criteria, application will vary across the province and municipalities may face inconsistent audit outcomes. Good Roads recommends the Province develop practical examples and documentation guidance.
• Supply chain capacity and delivery timelines are unaddressed: Ontario municipalities are still managing residual fleet lifecycle challenges from pandemic-era supply disruptions. Concentrating significant new public sector vehicle demand within a constrained pool of eligible manufacturers carries real risk of supply pressure and cost escalation. Good Roads had recommended proactive provincial engagement with OEMs, supply monitoring, and collective purchasing mechanisms.

Capital Infrastructure Policy

• No value-based thresholds for Domestic Supply Chain Plans: The requirement to prepare and evaluate Domestic Supply Chain Plans applies to all capital infrastructure procurements at any dollar value. Smaller municipalities with limited procurement staff will face a proportionally greater administrative burden. Good Roads had recommended scaling the depth of requirements to the size and complexity of the procurement.
• Trade and funding agreement interactions remain unclear: The directive acknowledges the existence of federal funding conflicts but does not provide the formal legal interpretation guidance Good Roads recommended. Municipalities receiving federal funding through programs may face unresolved tension between provincial and federal procurement conditions. Good Roads recommends the Province provide formal guidance and confirm whether compliance with the directive constitutes a safe harbour against trade agreement challenges.
• Compliance verification remains a municipal responsibility: The directive permits municipalities to rely on vendor attestations as evidence of domestic content, which provides some protection. However, it does not establish a provincial audit or oversight framework. Good Roads had recommended a risk-based, Province-led model to ensure consistency and protect municipalities from disproportionate audit risk if vendor attestations prove inaccurate.
• No monitoring framework for cost or competition impacts: Good Roads is concerned that requiring all vendors to prepare Domestic Supply Chain Plans for every capital procurement may increase administrative costs — which will ultimately be reflected in contract prices — and may discourage participation by smaller regional contractors. No mechanism for monitoring these impacts or triggering policy adjustments has been established.
• Reporting obligations still flow to multiple provincial entities: While consolidated in one section, municipalities may still receive data requests from Supply Ontario, MPBSDP, MMAH, and Treasury Board Secretariat. Good Roads continues to recommend a single-contact-point model and standardized reporting templates aligned with existing capital project reporting structures.

Next Steps

Municipalities should review the Municipal Buy Ontario Procurement Directive, the Capital Infrastructure Guide, and the Fleet Vehicle Guide to understand how these requirements apply to their procurement activities. The Ministry will be holding training sessions on the directives in early May. To read the guides and register for the training, please visit the Supply Ontario website.

Good Roads will continue to engage with the Province on the outstanding concerns noted above and will provide further updates as additional guidance is issued.