What is Hydro One's Localised Supply Chain Strategy?

Global trade tensions and manufacturing constraints are reshaping how North American utilities approach procurement.

Canadian utility Hydro One provides one case study in how infrastructure operators are localising their supply networks to manage external risks.

According to Hydro One's 2025 Sustainability Report, the company now directs 91% of its spending to Canadian suppliers.

This strategy change emerged against conditions including international conflict, cost increases and supply availability issues.

Canada First purchasing model

Hydro One adopted what it terms a Canada First buying strategy in response to global economic conditions. The report states that this approach was implemented to ensure Ontario receives required infrastructure as electricity demand grows.

The utility has moved beyond simply redirecting purchase orders. Hydro One committed approximately C$165m (US$120m) to engineering firm Northern Transformer to support expansion of its Ontario factory.

This investment means power transformers for Canada are now manufactured domestically. The company frames this as protection against external supply disruptions.

Local sourcing could also build community relationships that support grid expansion plans. The utility needs social licence to build new transmission infrastructure across Ontario.

Indigenous ownership in transmission assets

Hydro One operates a First Nation Equity Partnership Model that allows nearby Indigenous communities to invest in up to half the ownership of new transmission line projects. The company positions this as economic reconciliation through infrastructure development.

The Chatham to Lakeshore Transmission Line in Ontario became the first project to reach approximately 50% Indigenous ownership by the end of 2025. All five First Nation partners in the project had invested by that date.

According to the report, Hydro One spent C$216m (US$158m) with Indigenous businesses in 2025. This represented 7.1% of total spending and exceeded its 2026 target.

The partnership model turns transmission projects into investment opportunities for local First Nations. This procurement approach could reduce opposition to infrastructure development in Indigenous territories.

Operational performance and fleet transition

Hydro One recorded an injury rate of 0.68 per 200,000 hours worked in 2025, below the industry average according to the company. The utility recovered 96% of spills and recycled approximately 1.5 million litres of oil waste.

The company is converting its vehicle fleet to electric and hybrid models. By December 2025, 57% of its sedans and SUVs were electric or hybrid, exceeding its 50% target.

Hydro One aims for full fleet conversion by 2030. The company has installed 148 charging stations at 57 sites across Ontario to support this transition.

"Hydro One's sustainability strategy is evolving to enhance our focus on the areas that create the greatest value for our business and the communities we serve, safe, reliable service, community resilience, electrification and long-term affordability across Ontario," says Lisa Pearson, Executive Vice President, Corporate Affairs at Hydro One.

"We are building a resilient, sustainable business designed to endure shifts in our operating environment and will continue to reflect this focus in our business and future sustainability reports."

According to Hydro One, the company has reduced greenhouse gas emissions from operations by 27% since 2018. This reduction occurred alongside the fleet transition and operational changes.