Where public spending is heading, and what it means for BC firms
Federal buyers now favour Canadian suppliers, defence budgets are rising fast, and the Province is repacing its capital plan. Each change shifts where the work is and how it is scored.
Photo by Ewan Streit on Unsplash
Public spending in Canada is changing in three ways at once. Federal buyers are favouring Canadian suppliers. Defence budgets are rising quickly. And in British Columbia, the Province is slowing the pace of its capital program after years of rapid construction. For BC engineering, construction and consulting firms, each change affects which pursuits are worth the effort and how a submission will be scored.
The scale of public spending
The federal government is one of the largest buyers in the country. In 2024-25, the Government of Canada awarded $66.9 billion in contracts for goods, services and construction, of which Public Services and Procurement Canada awarded $55.6 billion.
The rules that govern how that money is spent changed this past year.
Buy Canadian is now a scoring rule
Budget 2025 described the new Buy Canadian Policy as a move from “best efforts” to a clear obligation to buy Canadian. When domestic suppliers are not available, purchases are to include Canadian content or come from trusted partners, and those cases require ministerial approval. The federal policy on prioritizing Canadian suppliers and Canadian content applies in stages. It covered strategic procurements of $25 million and up published after 16 December 2025, and strategic procurements of $5 million and up published after 15 June 2026.
Strategic procurements are those above the thresholds in sectors such as defence, health, infrastructure, and information and communications technology. The policy gives buyers several tools:
- limiting a competition to Canadian suppliers and eligible trading partners;
- reducing a Canadian supplier’s financial proposal by 10% for evaluation purposes;
- allocating 25% of the total evaluation score to a Canadian value-added criterion, or applying a 25% price-based credit instead.
The same announcement set out a second policy, which requires Canadian-produced steel, aluminum and wood products in large federal construction and defence projects, where supplies are available. It applies to projects over $25 million that need at least $250,000 in those materials.
For consulting and construction firms, the practical effect is that Canadian content is now something to document, not just to state. Expect to show where your team is based, where the work is done, and where materials come from.
Public spending is shifting towards defence
The largest new stream of federal money is defence. Budget 2025 proposed $81.8 billion over five years, starting in 2025-26, to rebuild, rearm and reinvest in the Canadian Armed Forces. That includes $19.0 billion over five years to repair and sustain military capabilities and invest in defence infrastructure, such as ammunition and training facilities, and $10.9 billion for digital infrastructure.
The government has also changed how defence buying is done. In October 2025 it announced the Defence Investment Agency, set up within the Public Services and Procurement Canada portfolio to accelerate defence procurement.
Defence work is not only for defence contractors. Bases need buildings, utilities, roads and environmental work. Projects need cost estimators, schedulers and engineers. Many of these contracts carry security requirements, and clearances take time to obtain. Firms that want a share of this work should start that process before the opportunity they want is posted.
Canadian content is now something to document, not just to state.
Housing has a new federal buyer
On 14 September 2025, the federal government launched Build Canada Homes, a new agency whose mission is to build and finance more affordable homes. A new agency means new procurement processes, new standing offers and new evaluation approaches. Firms in housing design, construction and project management should follow its notices closely in its early years, while its supplier relationships are still forming. Its first contracts will show which delivery models and partners it prefers.
BC is repacing its capital plan
The Province’s priorities are different, and its pace is slowing. Budget 2026, released on 17 February 2026, invests $37.7 billion in taxpayer-supported capital over three years. That includes $13.8 billion for transit and transportation infrastructure, $11.1 billion for new and upgraded health-care facilities, and $3.9 billion to build, renovate and seismically upgrade schools. Commercial Crown corporations expect to spend a further $15.3 billion over three years.
The Minister of Finance described this as carefully repacing the capital plan. For firms, that means fewer new starts in some programs and stiffer competition for the projects that proceed. Transportation and health care remain the largest categories, so pursuits there deserve the most attention.
What it means for BC consultants
A few adjustments follow from all of this.
Document your Canadian content. Keep a current record of where your staff are based, where your work is performed, and the origin of materials you specify or supply. Expect to be asked for it in federal bids.
Check your partners. If you team with firms outside Canada, understand how that affects your Canadian value-added score before you sign a teaming agreement.
Prepare for defence work early. Security clearances, facility requirements and past performance all take time to build. Decide now whether defence infrastructure is a market you want.
Follow the capital plan, not the headlines. In BC, transportation and health-care facilities carry most of the provincial capital budget. Build relationships with the owners of those programs before their tenders are posted.
Keep Indigenous participation in view. The federal 5% target still applies alongside Buy Canadian. Our note on Indigenous participation in public bids covers what evaluators look for.
A practical next step
Review your pipeline for the next 12 months against these shifts. For each pursuit, note whether it is likely to be a strategic procurement, whether Canadian content will be scored, and whether security requirements apply. Drop the ones you cannot compete for, and start preparing for the ones you can.
Our Public Sector & Bids practice tracks federal and BC opportunities and helps firms decide which to pursue.
Sources
- “Government of Canada implements Buy Canadian Policy to strengthen Canada’s economy and support homegrown industries”, Public Services and Procurement Canada, 16 December 2025. https://www.canada.ca/en/public-services-procurement/news/2025/12/government-of-canada-implements-buy-canadian-policy-to-strengthen-canadas-economy-and-support-homegrown-industries.html
- “Policy on Prioritizing Canadian Suppliers and Canadian Content in Strategic Federal Procurements”, CanadaBuys, Government of Canada. https://canadabuys.canada.ca/en/buy-canadian-policy/policy-prioritizing-canadian-suppliers-and-canadian-content-strategic-federal-procurements
- “Budget 2025, Chapter 4”, Government of Canada. https://budget.canada.ca/2025/report-rapport/chap4-en.html
- “Government announces Defence Investment Agency”, National Defence, October 2025. https://www.canada.ca/en/department-national-defence/maple-leaf/defence/2025/10/government-announces-defence-investment-agency.html
- “Budget secures B.C.’s future, protects critical services”, BC Gov News, Ministry of Finance, 17 February 2026. https://news.gov.bc.ca/releases/2026FIN0003-000158
- “Budget 2025, Chapter 3”, Government of Canada. https://budget.canada.ca/2025/report-rapport/chap3-en.html
- “Budget 2025, Chapter 2”, Government of Canada. https://budget.canada.ca/2025/report-rapport/chap2-en.html
