Small businesses are the backbone of Canada's economy, employing millions of Canadians, driving innovation, and strengthening communities from coast to coast. Yet many small businesses continue to face barriers when trying to access federal procurement opportunities.
To help address these barriers, Public Services and Procurement Canada (PSPC) is advancing the Small Business Procurement Program (SBPP), while Innovation, Science and Economic Development (ISED) will leverage the Innovative Solutions Canada (ISC) program to support innovation-focused procurement opportunities. These complementary programs will help federal procurement to prioritize Canadian suppliers and position the Government as an anchor customer for Canadian small businesses.
Under the new SBPP and through ISC , the Government of Canada is launching a series of measures to increase the participation of Canadian small businesses in federal procurements and make it easier to navigate the federal procurement system. By reducing barriers, simplifying processes, and creating more opportunities to do business with the federal government, these measures will help Canadian businesses grow, create jobs, invest in innovation, and scale their operations.
The initiative is part of the Government's broader effort to use federal procurement more strategically to support Canadian workers, strengthen domestic supply chains, and build a stronger and more competitive economy. As the Government advances its Buy Canadian agenda, these measures will help ensure that more federal purchasing power supports Canadian businesses, expertise, and innovation.
Why action is needed
Small businesses play a critical role in Canada's economy but continue to face barriers in accessing federal procurement opportunities.
As highlighted through engagement with industry, small businesses have identified key barriers, including:
- Complex and highly technical requirements
- Repetitive and time consuming documentation processes
- Difficulty understanding solicitation requirements
- Limited capacity to compete with larger firms with dedicated bidding resources
- Challenges navigating federal procurement systems
These barriers can disproportionately affect small businesses, limiting their participation and reducing competition in federal procurement.
The measures announced are designed to directly address these barriers by simplifying processes, reducing duplication and making procurement opportunities easier to understand and access.
Building on procurement modernization
The Government of Canada's actions to simplify procurement for small businesses build on a broader effort to modernize federal procurement and reduce barriers to participation.
Since 2017, Public Services and Procurement Canada has advanced key initiatives to make procurement more accessible, efficient and user friendly, including:
| 2017 |
|
|---|---|
| 2018 | Supplier barrier reduction work (2018) - Identified and reduced systemic barriers limiting small business participation |
| 2019 | AI Source List (2019) - Speed ups sourcing with pre-qualified suppliers |
| 2021 | Social Procurement - Simplified socio-economic integration |
| 2022 | CanadaBuys platform - Introduced a modern, digital procurement system to improve access to procurement opportunities |
| 2023 | Prompt Payment legislation - Accelerated payment timelines, reducing financial and administrative pressures on businesses |
| 2025 | Buy Canadian - Simplified domestic sourcing decisions |
Together, these efforts have laid the foundation for the new measures announced under the Small Business Procurement Program, accelerating the shift toward a more streamlined, accessible and user-focused procurement system for Canadian businesses.
What is changing
The Government is implementing a phased set of measures to improve the supplier experience and reduce barriers to participation. They represent a series of measures under the newly launched Small Business Procurement Program and support the Government's Buy Canadian Policy, which leverages federal procurement to strengthen domestic supply chains and support Canadian industries.
Phase 1
Beginning in summer 2026, immediate actions will be introduced to address key challenges:
- Proportional requirements
Federal buyers will be required to design procurements with small businesses in mind. This will ensure requirements are proportionate to the opportunity and reduce unnecessary administrative burden.
- Enhanced digital tools
Improvements to the Procura chatbot will provide suppliers with clear, on demand, information to help them understand requirements, navigate processes and identify relevant opportunities.
- Standardized procurement documents
Expanding the use of standardized solicitation and contract templates across departments will improve consistency, reduce confusion and lower the time and cost required to prepare bids.
Phase 2
By the end of 2026, additional measures will be introduced to further streamline the procurement experience:
- Plain language tender summaries
Simplified summaries will clearly outline key requirements, evaluation criteria and expectations, helping businesses quickly determine whether the procurement opportunity is a good fit to bid on.
- "Tell Us Once" approach
Suppliers will be able to submit common attestations and documents once and reuse them across bids, reducing duplication and administrative burden.
- Structured response formats
Standardized formats will simplify bid preparation and reduce the time required to prepare submissions.
- Pre submission completeness checks
Tools will help suppliers verify the completeness of their bids before submission, reducing errors and the risk of disqualification.
- Supplier recognition program
A new program will recognize trusted Canadian small businesses and support their continued participation in federal procurement.
Innovative Solutions Canada (ISC)
In support of advancing the implementation of the Buy Canadian Policy, ISED will receive $79.9 million over five years, beginning in 2026 - 27, for ISC. This funding will enable ISC to enhance its capacity to foster innovation and support increased participation of Canadian small businesses in federal procurement.
As part of this funding, ISC will make a number of enhancements in order to make the program faster, more flexible and better able to support Canadian small businesses. Beginning in summer 2026 and throughout 2026, actions will be introduced to simplify program processes and give more opportunities for small businesses:
- Clearer entry points: A simpler way for businesses to access ISC opportunities at different stages of innovation.
- Streamlined procurement pathway: A clearer and more direct way for Canadian small businesses to move from successful ISC projects toward federal procurement opportunities.
- IP support: Supports to help Canadian small businesses identify and address protection, licensing, and commercialization issues.
How this supports small businesses
Collectively, through the SBPP and ISC, these measures will:
- Reduce administrative burden and paperwork
- Shorten bid preparation time
- Improve clarity of procurement opportunities
- Increase fairness and accessibility in procurement processes
- Enable more small businesses to compete successfully
These changes will help level the playing field between small and large suppliers, ensuring that Canadian small businesses can fully participate in federal procurement and benefit from government spending.
For reference, a small business is a company with 499 employees or fewer, including those of its affiliates, or a joint venture whose total number of employees does not exceed 499.
Buy Canadian Policy: Progress to date
The measures are a key component of the Government's Buy Canadian Policy.
- Announced by the Prime Minister in September 2025, the Buy Canadian policy aims to protect and strengthen Canadian industries, helping them become more self-sufficient and resilient to changes in the global economy.
- Implemented in December 2025, the policy prioritizes Canadian suppliers, materials and content in federal procurement
- The government is actively incorporating the Buy Canadian policy into requirements that meet applicable policy thresholds.
- As of June 25, 2026, 14 contracts worth a total of $ 726.4 million have been awarded under the Buy Canadian Policy.
These early results demonstrate how federal procurement is being used to help create a strong Canadian supply chain by prioritizing Canadian suppliers and Canadian-made goods and services whenever possible.
For reference, a Canadian supplier is defined as per the Policy on Prioritizing Canadian Suppliers and Canadian Content in Strategic Federal Procurement in section 3.2.
ISC: Progress to date
ISC has partnered with over 60 federal departments and agencies since program launch, delivering over 1,650 grants and contracts to Canadian firms to support the development, testing and commercialization of made-in-Canada innovations. To date, over 95% of awardees are Canadian small and medium sized enterprises.
Expanding Impact
On June 15, 2026, the Government is expanding the reach of the Buy Canadian Policy by lowering the minimum threshold for the Policy on Prioritizing Canadian Suppliers and Canadian Content in Strategic Federal Procurements from $25 million to $5 million.
This change will:
- Increases the number of procurements covered by this Policy - approximately five times more federal procurements will now be subject to Canadian preference measures, such as Canadian Value-Added
- Creates more economic opportunities for Canadian suppliers
- Strengthens domestic supply chains across key sectors
Supporting a stronger Canadian economy
In 2024 to 2025, the Government of Canada awarded $66.9 billion in contracts for goods, services, and construction. Of this total, $55.6 billion was awarded by Public Services and Procurement Canada (PSPC).
Small and medium-sized businesses:
- Represent 47.2% of private sector GDP
- Employ 63.6% of the private sector workforce
- Currently account for only 20 - 30% of PSPC contract value
By simplifying procurement and increasing access to opportunities, the Government is working to ensure that more federal spending supports Canadian small businesses and creates jobs across the country. These measures will also help make federal procurement more accessible to underrepresented and disadvantaged groups by reducing barriers to participation. This more inclusive approach will promote equitable access to opportunities, enabling a broader range of diverse suppliers to participate and succeed in Canada's economy.
