What Trump announced

If you sell to the US government from Canada, your week just got complicated. On Tuesday, President Donald Trump posted "From now on, NO RECIPROCITY - NO ACCESS!" and accused Canadian and provincial governments of shutting out US firms from contracts. He told the US General Services Administration to partner with the US Trade Representative to "take all necessary steps to REMOVE Canadian-origin products from GSA's Multiple Award Schedules unless Canada restores full and fair reciprocity for American Farmers and Companies." One big open question: what exactly counts as "Canadian-origin products," and does that sweep in services or the parent companies behind US subsidiaries?

Market reaction and analyst view

Canadian names tied to US federal work took a quick hit. By Wednesday afternoon in Toronto, CGI Inc., WSP Global Inc., AtkinsRealis Group Inc., Stantec Inc. and Aecon Group Inc. were each off more than 2%. In a client note, National Bank of Canada analyst Doug Taylor called CGI's exposure "relatively material," adding, "We estimate US government revenue could represent between 15% to 20% of CGI's total revenue." He also pointed out that CGI mainly sells services in the US, which could make it "potentially more insulated than the current scope of the language implies." The bigger risk, he said, would be if any limits were based on Canadian parent ownership, which could pull US subsidiaries into the net.

Company response and Canadian policy backdrop

According to an email from the company, CGI Federal - the unit serving US federal agencies - is a "US-based, wholly-owned operating subsidiary," employing more than 8,000 people "who live and work across 60 US locations." The company added, "CGI Federal is proud to provide US-originated technology services and core business platforms under a wide range of contract vehicles to support the federal government's mission-critical objectives."

The clash comes after Ottawa responded to the initial tranche of US tariffs in 2025 by rolling out a federal procurement strategy that favors domestic firms and prioritizes Canadian materials on major construction and defense projects, coupled with efforts to boost digital self-sufficiency and sovereignty. Provinces have acted as well: Quebec said this week it will set aside certain tenders for Canadian firms, while Ontario has a policy that sharply curtails purchases from US suppliers and favors local companies.

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What this means for your portfolio

The directive targets GSA's Multiple Award Schedules, and the scope is fuzzy. If it ends up focusing on physical goods, service-heavy vendors may feel less heat than manufacturers. If it stretches to ownership, US subsidiaries of Canadian parents could be in play. For investors, the key is simple: know which of your holdings lean on US federal sales, and watch how definitions take shape.

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