The Buy Ontario Act Meets the CPTPP: A New Procurement Challenge for International Contractors

Canadian and U.K. businesses looking to capitalize on Canada's recent ratification of the U.K.’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”) are facing an unexpected hurdle in Ontario. 

While the CPTPP promotes open, non-discriminatory access to government procurement, Ontario's recent implementation of the Buy Ontario Act (Public Sector Procurement) (the “Act”) restricts procurement to prioritizing goods and services sourced from Ontario and Canada.

For contractors and suppliers pursuing public projects in Ontario, these competing procurement objectives create significant uncertainty. 

Ontario’s Buy Ontario Act

The Act came into force on December 11, 2025, with two procurement directives (the “Directives”) taking effect on April 13, 2026.

Broadly speaking, the Act – through the Directives – requires public-sector entities to prioritize the procurement of goods and services from Ontario and Canada. The Directives also impose additional restrictions affecting U.S. businesses and require reporting regarding the sourcing of goods and services. 

Importantly, the practical burden of compliance will fall on contractors, subcontractors and suppliers, as they are typically responsible for procurement on public infrastructure projects.

Non-compliance may carry significant consequences. Under section 6(1) of the Act, the Management Board of Cabinet may withhold funding from public entities that fail to comply with applicable procurement directives. Ultimately, the withholding of funds from public entities means the withholding of funds from the contractors and subcontractors.

Canada’s ratification of the U.K.’s accession to the CPTPP incentivizes U.K. contractors to further expand their operations into the Canadian market. CPTPP member nations are afforded expanded procurement protections, including obligations requiring equal treatment in certain government procurement processes. The CPTPP also provides qualifying investors with access to investor-state dispute settlement (“ISDS”) arbitration for alleged breaches of investment protections.

The CPTPP and the Act now operate within the same procurement landscape, yet they pull procurement in opposite directions. 

The CPTPP promotes equal treatment for qualifying foreign suppliers. Conversely, the Directives discourage public entities from sourcing goods and services outside Ontario and Canada.

This raises practical questions for contractors and procurement teams alike. Will suppliers from CPTPP member nations be considered sufficiently “local” for procurement purposes? In other words, will sourcing from a CPTPP nation satisfy Ontario procurement requirements? Much of this will likely depend on how individual RFPs are drafted and evaluated. 

It is also possible that CPTPP members may challenge aspects of Ontario’s procurement regime. A CPTPP contractor excluded from Ontario public procurement opportunities as a result of domestic-preference requirements may argue that those measures violate CPTPP investment protections.

The Canadian federal government bears responsibility for compliance with the CPTPP, while the Act is provincial legislation limited to Ontario. This creates tension between Canada’s international trade obligations and Ontario’s domestic procurement policies.

For contractors, subcontractors and suppliers, the issue is more than theoretical.

Public owners are unlikely to absorb the legal and practical risks associated with these competing procurement frameworks. If the CPTPP and the Act are considered together, local procuring entities will face increased scrutiny regarding sourcing, significant disclosure obligations and heightened RFP compliance constraints, while CPTPP contractors may be required to forego certain benefits afforded under the CPTPP in order to comply with the Act. 

The Bottom Line

How these competing procurement priorities will be reconciled remains unclear. 

What is clear, however, is that Ontario’s public procurement landscape is becoming increasingly complex for international contractors and suppliers. 

RAR Litigation advises contractors, subcontractors and other procurement participants on construction and infrastructure-related disputes and risk management. 

We assist clients in assessing procurement risk, reviewing tender and RFP requirements, advancing claims and responding strategically while protecting both legal and commercial interests.