Buy Ontario in 2026: What construction stakeholders need to know

Ontario has overhauled its public-sector construction procurement framework. As of April 13, 2026, every new procurement issued by a covered owner must comply with Buy Ontario procurement directives – a mandatory domestic-content overlay enacted under the Buy Ontario Act (Public Sector Procurement), 2025, SO 2025, c. 27, Sch. 1 (the “Act”).1 For construction work specifically, the change introduces a new bid deliverable, a new evaluation mechanic, and a new compliance file.

What changed

Two directives, both issued under the Act, came into force on April 13, 2026: the Buy Ontario Procurement Directive for the Ontario Public Service and broader public sector (the "Provincial Directive”),² and the Municipal Buy Ontario Procurement Directive for the municipal sector³ (the "Municipal Directive", and together with the Provincial Directive, the "Directives").

The Provincial Directive carries three substantive overlays:

a preference regime for Ontario and Canadian businesses under the Building Ontario Businesses Initiative ("BOBI")⁴ in s. 4.2;
the Procurement Restriction Policy excluding U.S. businesses in s. 4.3; and
the Strategic Categories regime in s. 4.4.

The Directive itself excludes capital infrastructure from BOBI, so construction procurements live in s. 4.4.2, which builds around a Domestic Supply Chain Plan and a Weighted Domestic Criteria requirement.

What procurement is covered by the Directives

The Provincial Directive applies to all ministries, all provincial agencies, Ontario Power Generation and its subsidiaries, the Independent Electricity System Operator, and every designated broader public sector organization under the Broader Public Sector Accountability Act, 2010⁵ and the corresponding BPS Procurement Directive⁶ – capturing the hospital, school board, college, and university sectors.

The Municipal Directive applies to every municipality, local board, and municipal services corporation prescribed under O. Reg. 54/26.⁷

1 https://www.ontario.ca/laws/statute/25b27
2 https://www.ontario.ca/page/buy-ontario-procurement-directive
3 https://www.ontario.ca/page/municipal-buy-ontario-procurement-directive
4 https://www.supplyontario.ca/wp-content/uploads/BOBI-A-Guide-for-Buyers-March-31-2026.pdf
5 https://www.ontario.ca/laws/statute/10b25
6 https://www.ontario.ca/files/2024-02/tbs-bps-procurement-directive-en-2024-02-08.pdf
7 https://www.ontario.ca/laws/regulation/260054

The regime captures new procurements only – those not issued or posted before the applicable start date: April 13, 2026 for most owners, May 15, 2026 for municipal capital infrastructure, and June 1, 2026 for local boards and municipal services corporations. Existing contracts, and contract extensions built into the original agreement, are unaffected.

There are some carve-outs to consider: the Directives exclude procurements needed to address situations that are both urgent and unforeseen. Each instrument also carries its own short list of exclusions – worth checking before relying on the regime.⁸

What does "capital infrastructure" mean

Both Directives define “capital infrastructure procurements” the same way – s. 4.4.2 of the Provincial Directive, s. 4.2.2 of the Municipal Directive. The definition is broad, with three branches: construction; incidental fixtures, furniture and equipment; and transit fleet vehicles.

"Construction" tracks the BPS Procurement Directive’s longstanding wording: physical construction, reconstruction, demolition, repair, and renovation, together with site preparation, excavation, drilling, seismic investigation, and any products, equipment, or machinery bundled into the construction. Professional consulting services related to the construction contract sit outside the definition unless bundled into the procurement.

The second branch covers fixtures, furniture and equipment that are incidental to the construction and needed for the facility’s operational readiness immediately after completion – whether delivered through the construction contract or procured separately.

The third covers transit fleet vehicles, such as rolling stock and buses; light-duty passenger vehicles fall under the separate fleet-vehicle rules instead.

Four categories are expressly excluded, even when they relate to the same facility: medical equipment; information technology; fixtures, furniture or equipment bought solely for ongoing operations after the facility is up and running; and routine maintenance, repair and operations, unless the work involves repairing or renovating the physical structure.

The Domestic Supply Chain Plan is the new core deliverable

Every covered construction procurement must now include two new pieces in the procurement documents:

a list of the major goods and services required for the deliverable; and
a requirement that bidders submit a Domestic Supply Chain Plan identifying the source of each.

"Major goods" is defined broadly in the Directives – structural materials (concrete, steel, lumber), building envelope components, mechanical and electrical systems (HVAC, generators, elevators), specialty items, fixtures, furniture and equipment, and transit fleet vehicles.

The Directives give owners a choice of evaluation method: an Evaluated approach that hands a 10% advantage (or, at higher values, a preferential-award rule) to bidders with higher Ontario or

⁸ The Provincial Directive's Capital Infrastructure regime does not apply to OPG or the IESO, and both Directives carve out specific procurement categories and allow cost-based and feasibility-based exclusions with senior approval: see ss. 3.0 and 4.4.2 of the Provincial Directive and ss. 3.0 and 4.2.2 of the Municipal Directive. O. Reg. 54/26, s. 1(1) adds further exclusions for the municipal sector.

Canadian content, or a Commitment approach that imposes a mandatory eligibility floor. Table 1 of each Directive sets out the thresholds and mechanics.

For procurements under the Provincial Directive above $368,000, Weighted Domestic Criteria must also be applied wherever feasible, capped at 35% of overall evaluation weighting (Table 2 of the Provincial Directive). The Municipal Directive has no equivalent.

Practical steps

For public-sector owners:

Confirm coverage by working through three tests in order: entity, procurement type, and carve-outs.
Update the templates of procurement documents to include the major-goods list, the Domestic Supply Chain Plan requirement, the chosen evaluation method, and – under the Provincial Directive – Weighted Domestic Criteria and U.S. business exclusion language.
Establish approval workflows for the exception routes.

For contractors and subcontractors:

Confirm Ontario or Canadian Business status.
Map the supply chain by major goods and services before the next bid.

If you have questions about how the Buy Ontario Procurement Directive or Municipal Buy Ontario Procurement Directive affect your construction procurement strategy, our team at Construct Legal can help.

This article is not legal advice and is provided for informational purposes only.