With large project opportunities flooding the landscape and gaining momentum, developers can be increasingly discerning about which projects they pursue. That could mean walking away from overly cumbersome procurement processes or commercial terms that can have a significant upfront investment, whether time, money or both. If procurement fails to align with market-tested leading practices, project proponents aren’t likely to stick around.
At a deeper level, improving procurement can make projects increasingly attractive — and genuinely possible — for a much broader range of businesses at varying stages of the growth journey. This is necessary to attract talent and investment for our nation-building projects.
Opportunities abound across Canadian industries. For example, we know Canada’s next era of nation-building will hinge in many ways on the country’s defence agenda. Nationally, Canada will increase defence spending to 5% of GDP by 2035. Ottawa has announced the first-ever Defence Industrial Strategy, which includes tens of billions of dollars in defence spending. Specifically, the policy seeks to prioritize Canadian suppliers, materials, innovation and commercialization
Still, as EY Canada’s Paul Vail and Dr. Lance Mortlock have said: “Strengthening the defence supply chain will require not only investment, but a deliberate shift towards resilience, flexibility and sovereign capability with commensurate sustainment capacity.”
Procurement can be a key lever on that front. The policy already seeks to streamline procurement, providing more consistent and predictable demand for Canadian businesses looking to take advantage of $180 billion in defence procurement opportunities – with $290 billion in defence-related capital investment opportunities – over the next 10 years.
At a minimum, manufacturers here need simplified and flexible procurement models to participate fully in the nation-building and defence agenda. More broadly, a different approach to procurement could help manufacturers and other Canadian businesses collaborate with international partners. It could also help them derive more value from upfront investments in major project. For example, a Canadian steel producer could ramp up production to supply transportation routes today, then use that added capacity to compete in international markets tomorrow. That creates momentum, enabling businesses to contribute while mitigating risks.
Above all, the policy requires enforcement to truly work. Industrial businesses across Canada are already raising red flags, worried that without enforcement, the policy cannot drive meaningful change.
When procurement reflects the realities businesses face, more companies can participate and benfit. To get there, procurement leaders to need to rethink the process from the bidder’s point of view. They also need to make it easier for proponents to succeed through clearer rules, practical compliance measures and stronger enforcement.
Rebuild procurement to work for more Canadian businesses and real-world scenarios
Some Canadian jurisdictions have earned strong reputations for procuring megaprojects and managing complex contracts. Others have struggled with overly complex processes and institutional rigidity, with negative consequences for project outcomes. Private sector companies weigh their likelihood of winning against the cost, complexity and time required to bid. In some cases, those costs can reach millions of dollars. If a public organization is known for troubled procurements, weak commercial discipline or frequent disputes, businesses may think twice before taking part.
Businesses that are new to projects of this scale can face a different set of procurement challenges. Middle- market suppliers, in particular, may struggle with complex requirements, short response timelines and limited access to procurement decision-makers. A bid can require immediate attention from already stretched teams or owner-operators, with little opportunity to ask questions directly.
Procurement requests can also be disconnected from how industries actually work. A requirement for a specific product - whether a certain length of steel or a particular size of windshield washer fluid – can send suppliers searching for days. In some cases, they may run out of time before they understand why the request was framed that way in the first place.
To make procurement a more accessible process capable of fuelling much broader growth in Canadian industries, we need a model that aligns more closely with how businesses and suppliers actually function.
To adapt, project sponsors and procurement leaders must acknowledge the inefficiency of their process and what they are asking, then look at projects through the bidders’ lens. To expand procurement’s potential for businesses of varying shapes and sizes, procurement teams will also need to take a wider perspective than in the past.
Engage the market early and look inward to answer five key procurement questions now
Seeking opinions and testing commercial concepts can be a solid starting point for positive change. Unconstrained by the formalities of an actual procurement, prospective bidders – whether large developers, medium-sized manufacturers or small business owners – could be more likely to provide candid feedback about which delivery models would actually work. Two-way dialogue can generate opinions and thoughts on key risks and lessons learned.
Engaging the market early can be invaluable for procurement leaders, especially while delivery models, commercial terms and other project details are still flexible. The insights gleaned can help shape stronger evaluation and more realistic timelines, giving a broader range of businesses a fair opportunity to submit complete bids.
It also sends an important signal to prospective bidders. Early engagement shows that the project environment will be collaborative, practical and focused on effective delivery from the start.
To move in this direction, ask key questions like:
1. Are we designing procurement around internal processes, or the way suppliers actually operate?
2. What is the true cost for suppliers to participate in our tenders, and is that limiting competition?
3. Where are we unintentionally excluding mid-market or Indigenous suppliers through overly rigid requirements?
4. How early can we engage the market before locking in delivery and commercial models?
5. Do our current procurement models incentivize long-term capability building in Canada, or just lowest-cost bids today?
Taking time to reset procurement in this way could very well accelerate project success over the long term — all while strengthening the entrepreneurial ecosystem that has fuelled Canada for generations. This requires a reset in approach, enforcement and compliance. Anything less would be an opportunity Canada simply cannot afford to miss.
