In November, Finance Minister Jim Flaherty tabled a seasonal Fiscal and Economic Update before Parliament. This week I would like to share my specific concerns regarding the future of small and medium sized enterprises (SMEs), which were almost completely left out of the Update.
SMEs are the lifeblood of our economy. There are 3 600 in Ottawa South alone and they vary greatly in size and industry. For example, I have met with such diverse enterprises as Go Travel Direct, NAVCanada, Advanced Business Interiors, Yasmin Bakery, and the Ottawa Central Railway on a variety of important issues.
Across Canada, there are nearly two million SMEs and they employ six out of every ten working Canadians. It is essential that we give them every opportunity to succeed. But the Fiscal Update’s only reference to SMEs suggests that they get access to technology at Canada’s community colleges. It does not address a far more profound economic stimulant that remains available: procurement.
Making Federal Procurement Effective for Canadian SMEs
I agree wholeheartedly with comments made recently, at a conference hosted by the Ottawa Centre for Research and Innovation, by Mitel Networks and Newbridge Networks founder Terry Matthews. He stated bluntly that the federal government should be "brought to task" for procurement policies that favour large corporations at the expense of our SMEs.
When facing red tape, SMEs must devote more of their revenue than large corporations do to overcome the same complexities. When the federal government pays only after all its steps are triple-checked, payments may come too slow for small companies to survive. Sometimes there are even explicit size barriers to SME competition or participation in government contracts.
In my first year in Parliament, I fought to ensure that then minister of Public Works, Scott Brison left the Parliament buildings and heard the concerns of Eastern Ontario businesses about procurement reform. These consultations led to the creation of the Office of Small and Medium Enterprises inside the department of Public Works and Government Services, a first step to addressing small business concerns.
Listening to SMEs and Entrepreneurs
The Ottawa Citizen reported that the Conservative government will not meet its commitment to save $2.5 billion on procurement over 5 years. Since the 2006 federal election, procurement changes have happened rapidly, emphasizing limited-competition contracting which runs right against the interests of SMEs.
Furthermore, these changes have not happened as transparently as citizens should rightly expect. I have raised questions on the floor of the House of Commons, but we have yet to hear straight answers. Over the summer, many local enterprises approached me with concerns that they were being sidelined by these rapid changes. My regional colleagues and I called for a full moratorium on changes until the appropriate balance could be found.
When the outcry was evidently widespread and vocal, the government held off on some of the most problematic evolutions. Still, I am not convinced that Senator Fortier, the current minister of Public Works, is yet listening to SMEs – and successful entrepreneurs like Mr. Matthews – about the proactive steps that need to be taken to bolster our economy from the roots up.