The Buy Ontario Act establishes a directive-based regime under which the Management Board of Cabinet (the Board) can require public sector entities to follow specified procurement policies, including giving preference to Ontario- or Canada-made goods and services and restricting who may bid. The Act applies to government entities, designated broader public sector organizations, and other entities that the Lieutenant Governor in Council may prescribe by regulation, and it lets the Board incorporate other government policies into directives — including future amendments.
The Act creates new compliance and enforcement tools: contracts with third‑party supply‑chain managers must flow down directive obligations; directives affecting funded organizations are deemed part of their funding agreements; the Board can direct ministers to withhold payments for non‑compliance (with amounts remaining unpaid after March 31 flowing to the Consolidated Revenue Fund); and the Minister may commission compliance reviews and publish findings. The Act also contains a broad extinguishment clause barring most civil, contractual and administrative claims arising from directives, repeals the Building Ontario Businesses Initiative Act, 2022, and includes unrelated amendments to the Highway Traffic Act and the Legislation Act, 2006.
At a Glance
What It Does
The Board may issue directives imposing procurement policies, such as preferential treatment for Ontario or Canadian suppliers, vendor performance standards, reporting obligations and restrictions on bidder eligibility. Directives may incorporate other government policies and future amendments by reference, and they are not subject to Part III (Regulations) of the Legislation Act, 2006.
Who It Affects
Applies to provincial government entities, designated broader public sector organizations (e.g., hospitals, colleges) and any additional entities prescribed by regulation; it also binds third‑party supply‑chain managers under contract and can alter terms of funding agreements between recipients and the Crown.
Why It Matters
This law swaps rule‑making for centrally issued directives and gives the province fast, flexible instruments to steer buying toward local suppliers while creating strong enforcement levers (payment withholding, deemed contractual terms) and legal shields for the Crown — a structural shift in how procurement policy will be implemented and litigated in Ontario.
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What This Bill Actually Does
The Act empowers the Management Board of Cabinet to set procurement policy for a wide swath of the public sector by issuing directives that public bodies must follow. Those directives can do more than encourage local buying: they can require preference for Ontario or Canadian goods or services, set vendor performance rules, dictate reporting, and even narrow who may bid on contracts.
The Board can also fold other government policies into directives and let those references automatically track future changes, which means a single directive can import shifting standards without a new legislative step.
When a public sector organization uses an external supply‑chain manager the Act requires that the organization's contract obligate that manager to comply with any directive‑level requirement applicable to the organization, with necessary adjustments. For designated broader public sector organizations and any prescribed entities, requirements in directives are treated as if they are already terms of the organization's funding agreements with the Crown, so non‑compliance can trigger financial consequences under existing funding relationships.To enforce compliance the Board can order a minister to withhold payments otherwise payable to non‑complying organizations; withheld amounts remain withheld until compliance and, if the breach persists past the March 31 following the direction, the organization loses entitlement to the funds and the money becomes part of the Consolidated Revenue Fund.
The Minister may also order reviews of entities’ compliance, designate reviewers, require cooperation and records access, and publish findings or direct corrective action after a review.The Act shields the Crown, many public servants and public sector entities from almost all civil, contractual and administrative claims tied to the Act, directives or regulations — though that protection does not remove access to judicial review or constitutional remedies. The statute also provides for regulations to prescribe which additional entities are subject to the Act, to define terms, to grant exemptions, and to manage transitional matters, and it repeals the earlier Building Ontario Businesses Initiative Act, 2022.
The Five Things You Need to Know
The Board can demand that procurement give preference to Ontario or Canadian goods or that eligibility to bid be limited to support Ontario businesses.
Directives may incorporate other government policies ‘rollingly’ — meaning future amendments to those policies apply automatically to the directive.
Contracts with third‑party supply‑chain managers must include obligations to follow applicable directives, effectively flowing obligations down the contract chain.
If a funded organization remains non‑compliant past March 31 after a withholding direction, the withheld funds become part of the Consolidated Revenue Fund and the organization loses entitlement to payment.
Section 11 bars virtually all private civil, contractual and administrative claims arising from the Act or directives, leaving only judicial review and constitutional remedies available.
Section-by-Section Breakdown
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Board directives create binding procurement policy
Section 3 is the operative engine: it gives the Board authority to issue directives that require public sector entities to adopt particular procurement policies, procedures or standards. Practically, this lets the province set one‑off or class‑based rules (for example, rules for hospitals or transit authorities) without standard regulatory processes; the section expressly lists options such as buy‑local preferences, bidder eligibility limits, vendor performance criteria and reporting duties, and permits directives to require enforcement measures to be built into procurement.
Rolling incorporation by reference
These subsections allow directives to import other government policies and to track future amendments to those policies automatically. That reduces the need for reissuing directives when underlying policies change, but it also makes the content of a directive depend on documents outside the directive itself — a key practical point for compliance teams who must monitor not only directives but any referenced policies and their future revisions.
Flows‑down to supply‑chain managers
Section 4 requires public sector entities to include, in contracts with third‑party supply‑chain managers, contractual terms obliging those managers to comply with any directive requirement applicable to the entity. That creates direct contractual exposure for private sector contractors and means compliance obligations will travel into commercial procurement relationships, increasing contract management workload and potential liability for vendors.
Deemed contractual terms and payment withholding
Section 5 deems directive requirements that apply to designated broader public sector organizations or prescribed entities to be terms of those organizations’ funding agreements with the Crown. Section 6 allows the Board to direct ministers to withhold some or all payments for non‑compliance, requires repayment only upon compliance, and includes a fiscal‑year end backstop: if a failure persists to March 31, the organization loses entitlement to the sums and the withheld amount becomes Consolidated Revenue Fund money. That combination turns procurement directives into financial levers tied directly to cash flows.
Compliance reviews, reporting and publication
Section 7 gives the Minister power to order compliance reviews, designate reviewers, require cooperation and record access, and requires reviewers to limit use of collected information to the review process. After a review the Minister may publish findings online and direct corrective action. The side‑effect is a quasi‑audit regime that can produce public reputational consequences as well as administrative requirements to fix identified gaps.
Broad shield from claims (extinguishment of causes of action)
Section 11 is unusually far‑reaching: it extinguishes causes of action and bars most proceedings against the Crown and many public and private actors for anything done under the Act, its regulations or directives. It also disclaims remedies — including injunctions and damages — except for judicial review or constitutional claims. For vendors and organizations this restricts the usual dispute resolution toolbox and shifts the balance of enforcement toward administrative controls rather than litigation.
Regulation‑making and prescribed entities
Section 12 gives the Lieutenant Governor in Council a broad regulation‑making power to prescribe additional public sector entities, define terms, exempt entities, and handle transitional matters. The choice of which entities to prescribe is consequential because it can expand the Act’s reach to entities that are not government or designated broader public sector organizations; regulations will be where the Act’s practical perimeter is finalized.
Minister can order municipal sign installations
Schedule 2 adds a new power allowing the provincial Minister to direct municipalities to install signs in community safety zones adjacent to schools and within 500 metres of schools; if a municipality fails to comply the Minister or a Minister’s agent may enter municipal highways and install the signs directly, despite municipal by‑laws or permitting regimes. The schedule also authorizes regulations governing the use and timing of flashing amber signals in school and community safety zones.
Carves out certain Protecting Condominium Owners Act provisions from automatic repeal
Schedule 3 amends section 10.1 of the Legislation Act, 2006 to prevent specific provisions of the Protecting Condominium Owners Act, 2015 (Schedule 1) from being automatically repealed on December 31, 2025, and stages the coming‑into‑force of that preservation to January 1, 2027 for one subsection; it’s a targeted timing and preservation measure rather than a substantive policy change.
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Explore this topic in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Ontario manufacturers and service providers that meet the Buy Ontario criteria — the Act increases their chances of winning public contracts by allowing explicit preference and, in some cases, by narrowing bidder eligibility to local firms.
- Provincial buyers and policy makers — the Board gains a centralized, flexible tool to direct procurement toward economic development and supply‑chain resilience objectives without permanent legislative change.
- Workers in Ontario sectors targeted by directives — where directives prioritize local production, employment and local supply chains may increase, supporting local jobs tied to public procurement programs.
- Crown and provincial decision‑makers — the broad immunity and ability to withhold funds reduce the province’s exposure to litigation risk and give administrators leverage to enforce policy quickly.
Who Bears the Cost
- Out‑of‑province and foreign suppliers — preferential treatment and potential bidder exclusions will reduce their access to provincial public contracts and increase their competitive disadvantage.
- Designated broader public sector organizations and prescribed entities — they will face new compliance, reporting and contractual obligations that may require procurement policy changes, staff time, and contract renegotiation costs.
- Third‑party supply‑chain managers and vendors — contracts must include directive‑compliance clauses, adding contractual risk, monitoring duties, and potential penalties for failing to enforce directive terms.
- Municipalities — Schedule 2 reduces municipal autonomy over signage and requires municipalities to comply with provincial directives or face provincial installation and possible administrative burden to supply requested information.
Key Issues
The Core Tension
The core tension is between two legitimate objectives that pull in opposite directions: using the province’s purchasing power to protect and grow Ontario businesses and supply chains versus maintaining open, competitive procurement that achieves value‑for‑money and respects interjurisdictional trade commitments and legal remedies. The Act favors rapid administrative control and local economic goals, but doing so tightens legal protections for the Crown and shifts dispute resolution away from courts — a trade‑off between policy agility and traditional checks on executive power.
The Act packs powerful administrative levers into a short statute, but those levers raise implementation and legal coordination questions. First, the text leaves key operational terms — notably what constitutes a valid “preference,” how eligibility restrictions must be drawn, and how vendor performance standards are measured — to directives and regulations, so much of the policy’s practical effect will be set out later and may vary across sectors.
That increases uncertainty for vendors and procurement officials until detailed directives or regulations appear.
Second, the Act’s interaction with interprovincial and international procurement commitments is an open implementation issue. Provinces operate under the Canadian Free Trade Agreement and other procurement commitments which limit discriminatory practices; the Bill’s text does not resolve potential conflicts, meaning the Board and regulators will need to design directives that either comply with trade obligations or risk successful challenges outside the narrow carve‑outs the Act permits.
Finally, Section 11’s broad extinguishment of causes of action narrows judicially enforceable remedies for affected parties, pushing disputes into administrative channels. That reduces litigation risk for the Crown but raises questions about accountability, the availability of relief for contractors that lose business, and how proportionality will be preserved when financial withholding affects service delivery.
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