Local Content Policies in the Extractive Industry in Canada

Although Canada has not been recognised as a go-to nation in local content policies, this paper argues that local content policies (LCPs) are well embedded in extractive industry regulation in Canada. While the Canadian federal government does not have an official LCP as we know it, as there is no policy document that makes explicit reference to local content, the federal government has incorporated the policy in some form under the federal foreign investment policy since at least 1973. Local content is also fully embedded in requirements for the submission of benefits plans under accords negotiated between the federal government and the Atlantic provinces of Newfoundland and Labrador and Nova Scotia to enhance benefits to the provinces from offshore oil and gas development in Canada’s continental shelf appurtenant to the two provinces. Furthermore, unlike in most other countries, LCPs in Canada are not characterized by the setting of stringent targets that companies must fulfil but are instead characterised by a more flexible approach that encourages negotiation between the government and project developers to determine the acceptable level of local content. In addition, the understanding of ‘local’ under Canada’s local content regime embraces three types of ‘local’: Canadian nationals (and permanent residents) as a whole, provincial residents, and Aboriginal people. Each of these locals is the focus of separate local content programmes. This approach shows how the LCP can be strategically harnessed to address the socio-economic situation of different segments of the national population—an approach that contains policy lessons for other countries.