Quebec moves to protect supply chains, expand relief to more businesses as trade war intensifies

Quebec moves to protect supply chains, expand relief to more businesses as trade war intensifies

15% local content requirements on public construction, broader access to trade relief funds

With Canada's new counter-tariffs against the United States set to take effect Tuesday, Quebec's government has announced measures it says will diversify the economy while protecting local businesses and jobs.

"The government aims to be prepared should the situation escalate further," reads a news release issued late Monday evening by the Treasury Board Secretariat and the Ministry of Economy, Innovation and Energy.

Premier Christine Fréchette stepped back from the provincial election campaign Monday to call a special cabinet meeting on the intensifying trade war with the United States.

The move comes as Canada plans to retaliate against the latest U.S. tariffs, slapping new duties ranging from 15 to 50 per cent on hundreds of American products. Those Canadian counter-tariffs are set to take effect Tuesday.

The new Canadian duties are part of the dollar-for-dollar response promised by Prime Minister Mark Carney last August, following the breakdown of negotiations with the U.S. — and the implementation of 50 per cent tariffs on nearly $28 billion worth of Canadian products.

Under the procurement changes outlined in the release, the Centre d'acquisitions gouvernementales can now reserve public contracts for companies with an establishment in Quebec or Canada.

No talks scheduled as Canada's counter-tariffs against U.S. set to take effect at 12:01 a.m.

Public tenders can also require goods to be manufactured or processed locally, and bidders can receive a 15 per cent preference margin based on Quebec or Canadian value-added content.

"The government is using its purchasing power to support the local economy — creating more opportunities for businesses, sustaining jobs and reducing reliance on the U.S. market," the release says.

Contracts need Quebec, Canadian sourcing

Additionally, for construction contracts valued under $9.2 million, the Transport Ministry, Santé Québec and the Société québécoise des infrastructures will have to require that at least 15 per cent of the value of materials and equipment be Quebec- or Canadian-sourced.

The release notes that the $9.2-million threshold on construction rules aligns with flexibility allowed under international trade agreements. The 15 per cent local content rule was chosen to boost regional suppliers without causing material shortages or supply-chain overheating.

For projects exceeding $9.2 million, more ambitious requirements could be imposed on a case-by-case basis by decree, the news release says.

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The province is also expanding direct financial support. The Fonds offensif pour le renforcement des capacités économiques will be made more flexible to help businesses access needed liquidity, including by allowing available funding to be disbursed more quickly and allowing a company to repay an existing loan.

Emergency assistance for small and medium-sized enterprises (SMEs) is also being expanded, with businesses reporting annual revenue between $200,000 and $2 million now eligible.

To reduce reliance on the U.S. market, the province is deploying a dedicated interprovincial task force led by Investissement Québec International, the release says. The team will help SMEs expand into other provinces by finding buyers, securing contracts and replacing American supplies with Quebec products.

The government is also asking Crown corporations to adopt a Quebec-focused purchasing strategy amid the tariff war. It says they will be allowed to depart from the province's public-contracting law to do so, with administrative discussions already underway.

The news release says the government is not ruling out additional measures.

Retaliatory tariffs could raise costs for Canadian businesses already weathering the trade war

The premier held a meeting with party leaders after discussing the matter with her cabinet. On X, Parti Québécois Leader Paul St-Pierre Plamondon dismissed the briefing as little more than a "lecture" of decrees and measures already slated for public release. St-Pierre Plamondon said opposition leaders still have not received the detailed breakdown of Canada's retaliatory tariff list or recent updates.Quebec Liberal Party Leader Charles Milliard questioned the premier's readiness. Posting on X, Milliard said Fréchette told him she had not yet spoken with other provincial premiers about the tariff crisis, accusing the Coalition Avenir Québec government of "inaction and improvisation" and waiting until its back was against the wall before acting.

Isaac Olson is a journalist with CBC Montreal. He worked largely as a newspaper reporter and photographer for 15 years before joining CBC in the spring of 2018.