Small and medium enterprises (SMEs) have borne the brunt of the COVID-19 pandemic. Early in the pandemic, a CIBC study revealed that the majority (81 per cent) of Canadian small business owners said COVID-19 has negatively impacted their operations, and many (32 per cent) worry about the viability of their business over the next year. The Government of Canada has enacted a several programs to help businesses of all sizes, like the Canadian Emergency Wage Subsidy, tax relief and deferrals, loans and direct financial support. With the pandemic now entering a second wave, the outlook is bleak for many.
Unfortunately, last month’s Speech from the Throne did not mention the federal government’s ability to use its “fiscal fire-power” to support small businesses via federal procurement. Small business applauded Minister Bains focus on this policy during the first parliament session. As Canada’s biggest buyer, the Government has an opportunity to ensure that federal procurement supports SMEs as we recover from the COVID-19 economic fallout.
The need to include SMEs in federal procurement is widely supported from an economic viewpoint. It also makes sense from a citizen services perspective where SMEs can help governments as they undertake key operational priorities in digital transformation and environmental sustainability. Moreover, big tech has cut back sales teams drastically during the pandemic, so unless SMEs are included, government itself will soon see significant impacts to its current service levels across the country.
COVID-19 has reinforced the value of strong domestic supply chains and service supply chains supported by local business. Government has an opportunity here to rethink its procurement vehicles and ensure SMEs have a meaningful role, not just “a carve out” that provides “bonus points” to manufacturers that choose to use small businesses.
For example, in my line of work, SMEs support government and enterprise print fleets across Canada. For years, hundreds of SMEs have provided cost-effective supply, installation, maintenance, and repairs for the tens of thousands of printers and other technology products supporting Government of Canada departments and businesses from coast to coast.
Today’s printers are highly complex IT machines, printing a wide array of products for Canadians across the globe. Government and business offices have wide needs from big sophisticated mainframe systems to small satellite printers – as well as adhering to high standards of security.
COVID-19’s impact on Canada’s print services business has been significant, with government requiring a fraction of the printing previously needed, as current office occupancy rates fluctuate between 10 and 20 percent. The economic shutdown has dramatically impacted the ability of SMEs like ours to sustain private sector business, let alone do business with federal departments and agencies.
That is why Government of Canada procurement policies are more important than ever. If larger multinational companies can lowball their pricing strategies to exclude SMEs, the result will not only mean poorer service and pose new security risks to the Government and businesses alike – it will lead to continued job losses and the end for small and medium locally based businesses who have long supported the private and public sector’s IT service needs, nationwide.
Shared Services Canada, Canada’s largest buyer of IT services, recently made strides to improve SME inclusion strategies in its procurements. However, unless these changes are meaningful and mandatory, these efforts will fall flat.
SMEs need to be an equal voice at the table – ensuring larger companies are motivated to collaborate with small businesses outside of slicing off a share of their total win. A mutual benefit between businesses of all sizes is required to work effectively.
Of course, price should always be an important component of a purchasing decision. In the print world, the current pricing model for print services will not allow the Government to achieve its stated outcomes and will cause significant disruption. Many of our government clients have indicated serious worries with the new procurement approach and how it will impact service delivery.
At a time when Canadian businesses need support more than ever, local business needs to be equally included in procurement approaches. Dialogue is good but we are at a juncture where tangible changes are mission-critical to the livelihood of small businesses.
COVID-19 has served as a wake-up call that governments must recognize the importance of domestic supply. I hope this applies to the delivery of print services by Canadian small businesses in federal procurements, as well as any other technology solutions that enable the private and public sector to innovate how we work on the road ahead.
Let us harness the mandate of socio-economic inclusion in all federal procurements. This is a time to unite industry, leverage local expertise in Canadian communities, and create new solutions for a post-COVID world.
Alec Milne is President of Printers Plus which supports printing services to over 50 Canadian government departments, agencies and crown corporations.