Order in Council 1358-2026 – New Mechanisms for the Centre d'acquisitions gouvernementales
Under Order in Council 1358-2026, the Québec government authorizes, from September 7, 2026 to January 31, 2027, the Centre d'acquisitions gouvernementales (the “CAG”) to depart from the general principle that public calls for tenders must be open and without discrimination to foreign suppliers from jurisdictions bound by an intergovernmental agreement with Québec.
More specifically, Order in Council 1358-2026 establishes three mechanisms allowing the CAG, depending on the category of goods covered by the contemplated supply contract, to exclude or restrict foreign suppliers.
1. Reserved procurement for businesses established in Québec or elsewhere in Canada
Goods covered: digital learning tools; desktop computers, laptops, monitors and tablets; grocery products – Western region.
Effect: only businesses with an establishment in Québec or Canada are eligible to participate to public calls for tenders.
Maximum contract term: 60 months, including renewal.
2. Reserved procurement for Québec or Canadian businesses, subject to a Québec or Canadian content requirement
Goods covered: light vehicles; office furniture; electrical supplies; standard and adjustable classroom furniture; grocery products – Eastern region; miscellaneous meats.
Effect: While public calls for tenders are reserved for enterprises established in Québec or elsewhere in Canada, the goods acquired must also qualify as Québec or Canadian goods within the meaning of the Regulation respecting the definition of certain expressions (C-65.1, r. 7.01). This is the most restrictive framework, as it applies to both the supplier’s establishment and the origin of the goods.
Maximum contract term: 54 months, including renewal.
3. 15% Preference margin
Goods covered: used computer equipment; office supplies; dairy products; hygiene bags.
Effect: Public calls for tenders must include a preference margin based on Québec or Canadian value-added content, achieved by reducing the submitted bid by 15% to determine the successful bidder. Unlike the two previous mechanisms, foreign competitors are not excluded and remain fully eligible for the public contracts in question, but they are disadvantaged on price.
Maximum contract term: 60 months, including renewal.
Order in Council 1359-2026 – Municipal Contracts: Construction Added and a 15% Content Requirement
Order in Council 1359-2026 amends the Regulation to impose conditions for the awarding of certain supply contracts by municipal bodies (C-19, r. 2.2, the “Regulation”), which was adopted on March 5, 2025, in response to U.S. tariffs. This regulation applies to cities, municipalities, metropolitan communities and transit authorities, and originally targeted only four categories of supply contracts: computer hardware and software; medical supplies and equipment; pharmaceutical products; and scientific instruments.
The Regulation adopted in 2025 restricts foreign supplier access to certain public contracts depending on the method of award:
- Public tenders : A 10% to 25% penalty increase is applied, for evaluation purposes only, to bids submitted by U.S.-based companies without an establishment in Québec or in a territory covered by an applicable intergovernmental free trade agreement.
- Calls for tenders by invitation: Only companies established in Québec or in such a territory may be solicited.
- Contracts awarded by mutual agreement: A contract may only be awarded to businesses established in Québec or in such a territory, unless authorized by the body’s council.
What Order in Council 1359-2026 Changes
Expansion to construction contracts. With the adoption of the Order in Council, the Regulation now includes a new component covering construction contracts with an expenditure below the threshold set by the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) (currently $9.2 million).
New domestic content requirement in construction. For construction contracts, tender documents must require, with some exceptions, that at least 15% of the value of materials and equipment be from Québec or Canada—a domestic content requirement that is separate from the penalty increase applied to public tenders.
Expected Duration of the Orders in Council
Order in Council 1358-2026 (amendments to the CAG procurement powers): September 7, 2026 to January 31, 2027.
Order in Council 1359-2026 (amendments to the procurement powers of municipal bodies): in force on September 8, 2026; the municipal regulation it amends remains in effect until March 5, 2027.
Key Takeaways
These orders in council are temporary and targeted: they do not completely close public procurement in Québec to U.S. companies, but they make access to public contracts more difficult for certain categories of goods and for certain municipal construction contracts. Price is no longer the primary determining factor.
Québec or Canadian suppliers: The purpose of the orders in council is to create a real competitive advantage for domestic businesses by prioritizing access to public procurement for companies with an establishment in Québec or Canada and promoting the procurement of goods manufactured or processed in Québec or Canada.
Suppliers established abroad, including in the United States: The impact of the orders in council on foreign companies depends entirely on the applicable category and mechanism. The same supplier could be excluded from one procurement process, disadvantaged by 15% in another, or fully eligible in a third. It is therefore recommended that any foreign supplier of goods or services first identify which framework applies to the public contract in question and then assess the mechanisms that may be available to it, such as through the use of a subsidiary, plant or distribution centre in Québec or Canada, adjustments to its supply chain to meet the domestic content threshold, or reliance on the exceptions provided for under the legislation.
Next Steps: Companies operating in the targeted sectors should promptly review their current and upcoming calls for tenders and their supply sources to remain compliant and competitive while the orders in council are in effect.
Fasken supports its clients wherever they are located in the world—whether in Canada or elsewhere—to assess their exposure, seize the opportunities created by these measures, and position themselves as advantageously as possible within the applicable regulatory framework.
