This guide explains how the Canadian government contracting market works — covering the three tiers of government, the differences between bids and tenders, and the steps required to find and win contracts across federal, provincial, and municipal agencies.
Why it matters: Canada's public sector spends over $65 billion CAD annually across federal, provincial, and municipal governments, and the procurement processes are similar enough to the U.S. that American contractors can compete effectively with the right preparation.
Key Takeaways
- Canada's public sector is a $65B+ annual market: Federal, provincial/territorial, and municipal governments collectively spend over $65 billion CAD annually on goods and services from outside suppliers.
- Bids, tenders, and standing offers follow distinct rules: Understanding the difference between competitive bids, price-only tenders, and pre-qualified standing offers is essential before responding to any Canadian government solicitation.
- Four steps determine your competitive readiness: Winning Canadian government contracts requires market research, business registration, identifying where to find opportunities, and sizing your total addressable market — tools like GovWin IQ can consolidate these steps.
What is Canadian Government Contracting?
Every government must secure the goods and services essential to serving its citizens and communities. To do so, they enter into agreements with businesses that can provide the products and services the government needs.
Governments in Canada are no different; whether they are federal, municipal, provincial or territorial governments, they still need to provide what their citizens need. The Canadian government contracting process differs depending on the type of contract or the government entity involved.
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Canadian Government Contracting 101
Discover how your business can get started and expand its sales to federal, provincial, territorial and municipal agencies across the Canadian public sector.
Types of Canadian Government Contracts
Similar to doing business with the U.S., selling to the government in Canada can differ depending on which type of government contract is on offer, such as bids and tenders (explained below), or which Canadian government agency a business is working with.
These are the three tiers of government in Canada:
Canadian Federal Government
The federal government, known as the Government of Canada, spends approximately $20 to $22 billion CAD ($15 to $17 billion USD) annually on behalf of federal departments and agencies. This process is not dissimilar to U.S. federal contracting.
To provide critical government functions, Public Services and Procurement Canada (PSPC) – the federal government's procurement arm – averages 60,000 transactions annually for goods and services.
Just like in the U.S., the Canadian federal government is also heavily invested in the defense sector. Every year, Canadian defense organizations spend billions of dollars purchasing a wide variety of goods and services. Indeed, the Department of National Defense (DND) is responsible for well over 10,000 contracts per year and will spend an estimated $26.5 billion Canadian Dollars (CAD) in 2023-24. However, Canada’s defense budget, as well as the broader Canadian federal budget, is facing proposed cutbacks.
Canadian Provincial and Territorial Government
At the provincial and territorial level, procurement spending accounts for about $30 billion CAD ($23 billion USD) each year. Canada comprises 10 provinces and 3 territories, but 4 provinces account for roughly 80 percent of total provincial and territorial spending: Ontario, Quebec, British Columbia, and Alberta.
Provinces have their own unique procurement powers that are exclusive to those of the Government of Canada.
Territories were created by the federal government and have authorities that differ from provinces.
Canadian Municipal Government
The municipal market includes municipalities, academic institutions, schools, and hospitals, also known as the MASH sector. Municipal spending amounts to $15 to $18 billion CAD ($11 to $13 billion USD) annually. Most of this spending comes from a few cities in particular: Toronto, Montreal, Calgary, Ottawa, Edmonton, Winnipeg, Mississauga, and Vancouver.
Just as in the United States, entering and succeeding in the Canadian government contracting market requires a commitment to understanding its unique needs, rules, and regulations. That’s why experts from the U.S. Commercial Service and Deltek have partnered to share tips and best practices for approaching the Canadian government contracting market with confidence in this free-to-access, on-demand presentation:
Bids and Tenders in Canada
In Canada, government solicitations are often referred to as "tenders" or "proposals".
After evaluating bids, the winning proposal is selected, and the procurement entity awards the contract on behalf of the department or agency. The public is then notified through an award notice posted on the same tendering service that was used to advertise the requirement. Several types of bid notices are used in Canadian procurement; bids and tenders are among the most common.
Canada bids and tenders are posted on government websites such as CanadaBuys.
One unique aspect of Canadian government procurement is its official language requirements for these posted notices. Canada has two official languages – English and French – so bids and tenders from the Government of Canada are published in both languages. Bidders may respond in the language of their choosing.
Below are some of the similarities and differences between bids and tenders in Canadian government contracting.
Canadian Government Bids
A government bid can be any bid, proposal, quote, or offer made by one or more private entities to do business with the government. If a government bid is accepted, the parties will enter into a government contract agreement that outlines the delivery of goods or services.
Canadian government bids are generally issued by a public-sector entity in Canada through a competitive process that requires potential sellers to submit offers and qualifications in response to a government solicitation.
Canadian Government Tenders
Tenders are used in addition to bids in Canada, but are more focused on price. With tenders, vendor selection is based solely on price, and negotiation is not permitted. They are used for the provision of specific goods and services.
Other Types of Government Opportunities
Aside from public tenders and bids, there are other unique terms and methods, such as standing offers and supply arrangements, that can be used to sell to the government in Canada.
- Standing Offer: A standing offer is an offer from a potential supplier to provide goods and/or services at pre-arranged prices, under set terms and conditions, when and if required. It becomes a contract once the government issues a "call-up" against it. Until that time, the government is under no actual obligation to purchase.
- Supply Arrangements: Supply arrangements allow public sector organizations in Canada to solicit bids from a pool of pre-qualified suppliers for specific requirements. A supply arrangement includes a set of predetermined conditions that will apply to bid solicitations and resulting contracts. Neither party is legally bound by signing a supply arrangement alone, and the prices established under a supply arrangement are negotiable.
What is CanadaBuys?
CanadaBuys is the designated public platform for federal bids and tenders in Canada. Searches can be filtered by a few features, such as keyword(s), tender notice status, or location.
Sellers to the Canadian federal government should register with CanadaBuys and become familiar with how the site works and how goods or services fit within it, to help them search for and monitor relevant opportunities.
How to Get Government Contracts in Canada
The Canadian government offers businesses plenty of opportunities to find and win government contracts. Before your company can bid on government contracts in Canada, you need to follow a few key steps to best position yourself for success.
1. Understand the Canadian Public Sector Market
The first step to doing business in Canada is understanding the market and where your business is likely to be successful by answering the following questions:
- Which governments buy goods and services that your business provides?
- How much have these governments bought before, and how do they make their purchases?
- What are these governments' plans for buying in the future?
- Which regions or jurisdictions are a good fit for your company?
The answers to these and other similar questions can be determined by getting a holistic view of the Canadian market and comparing what each government needs or is likely to buy. That information is obtained by analyzing tender and contract data, reviewing budget and planning documents, and identifying market trends.
Businesses can use tools like GovWin IQ from Deltek to gather this information in one place.
2. Register Your Business in Canada
To do business at any level of government in Canada, your second step should be registering your business. At the federal level, you should follow these steps:
- Be prepared with your Business Number (BN) from the Canada Revenue Agency (CRA). If your business is based outside of Canada, contact a Tax Service Office (TSO) to apply for your BN.
- Register as a supplier in the Supplier Registration Information (SRI) system.
- Sign up for SAP Ariba if you have not done so previously.
- Register in procurement databases and/or methods of supply relevant to your company.
3. Find Canadian Government Contracts
The third step to doing business in Canada is knowing where and how to locate opportunities.
CanadaBuys is the officially designated site for federal bids and tenders. Suppliers should become familiar with the language of CanadaBuys and how goods or services fit within it, to help them search for and monitor opportunities. Provinces, territories, and municipalities usually have their own online tendering platforms, though they differ in capabilities and search features.
4. Understand The Addressable Canadian Government Market for What You Offer
It is more than likely that Canadian government buyers across federal, provincial, territorial, and MASH (municipalities, academic institutions, schools, and hospitals) sectors are soliciting tenders and bids for the types of goods or services that your company provides.
Browsing GovWin IQ's sample government contracts site can give you an idea of what these governments are looking for. This will help you get an idea of your potential total addressable market (TAM) in the Canadian public sector.
Similar to the U.S. public sector market, numerous and varied procurement opportunities exist at all levels of government in Canada and are accessible to all types of suppliers.
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Win More Canadian Government Contracts with GovWin IQ
Are you looking to gain an edge in the Canadian public sector market? GovWin IQ from Deltek offers access to comprehensive, centralized coverage of Canadian federal, provincial, territorial, and municipal markets in one platform.
As the leading provider of U.S. contracting market intelligence across federal, state, and local contracting, Deltek GovWin IQ is now applying its tried-and-true methods to the Canadian market. Everything your company needs to do business in Canada successfully, from bids to contracts to market insights, is available on the user-friendly GovWin IQ platform.
