Late last year, the Province passed Bill 72, the Buy Ontario Act, 2025, replacing earlier legislation aimed at encouraging public sector organizations to purchase Ontario-made goods and services. The goal of the new Act is to boost the provincial economy, protect jobs, and strengthen supply chains amid global uncertainty.
In mid-January, the Ministry of Public and Business Service Delivery and Procurement (MPBSDP) released a regulatory proposal that would significantly expand how Buy Ontario rules apply, particularly for municipalities.
What’s Changing for Municipalities?
The proposal would formally require all 444 Ontario municipalities and their local boards to comply with provincial procurement directives. While Buy Ontario policies were previously encouraged, this regulation would make them mandatory.
This shift raises several concerns:
- Reduced local control: The province would be able to issue binding procurement rules that override municipal bylaws.
- More red tape: Smaller, rural, and northern municipalities may struggle to verify Ontario-made requirements without added staff or resources.
- Financial risk: Provincial funding could be withheld for non-compliance, even for technical procurement errors.
New Rules for Municipal Fleet Vehicles
Municipalities would be required to follow a mandatory preference hierarchy when purchasing or leasing light-duty fleet vehicles.
- Tier 1 – Made-in-Ontario vehicles, identified by a VIN starting with “2”
- Tier 2 – Vehicles from manufacturers with significant production operations in Ontario
Only if these options are unavailable or impractical could municipalities look elsewhere—and they would need to document why.
Currently, eligible vehicles are produced by Honda, Toyota, Stellantis, General Motors, and Ford at Ontario plants.
Construction and Infrastructure Projects
The proposal also extends Buy Ontario preferences to municipal capital infrastructure and construction projects, requiring contractors to prioritize Ontario- and Canadian-made goods and services.
Potential impacts include:
- Increased administrative oversight of contractors and subcontractors
- Higher project costs due to reduced competition
- Possible conflicts with federal funding rules
Trade Agreement Conflicts
Municipal procurement is already governed by trade agreements such as Comprehensive Economic and Trade Agreement (CETA) and the Canada Free Trade Agreement (CFTA), which require open, non-discriminatory bidding above certain thresholds.
Rigid Buy Ontario requirements could conflict with these obligations, creating legal risk, bid challenges, or funding delays, especially for federally funded projects.
What Happens Next?
Good Roads will raise these concerns in a formal submission to the Ontario Regulatory Registry, calling for exemptions or thresholds to ensure municipalities can remain compliant with trade agreements while managing costs and delivering infrastructure effectively.
Read the full regulatory proposal here.
