Federal departments can seek an exemption from Ottawa’s “Buy Canadian” procurement rules when applying them is expected to raise costs by 25% or more, according to the policy cited in a parliamentary response to Conservative MP Rachael Thomas. 

The rules also allow exceptions for insufficient Canadian supply, public interest concerns and delays affecting critical defence or national security equipment. 

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Thomas asked which federal bodies are exempt from prioritizing Canadian suppliers and materials, and which purchases qualify for exceptions. The answer lies partly in the policy itself: its Canadian supplier and content rules apply to strategic federal procurements valued at $5 million or more as of June 15, 2026. Even when a contract falls within that scope, a department may seek an exception on a case-by-case basis.

For strategic contracts, the policy says a projected cost increase of at least 25% above current market rates may fail its “best value” test. A separate policy covering Canadian steel, aluminum and wood in large construction and defence contracts permits a similar exception when using domestic materials would increase the overall cost by at least 25% over non-Canadian materials. That difference must be backed by documented market analysis.