Government Operations Committee on Oct. 6th, 2011

[The Chair, NDP, Pat Martin]

Thank you, Mathieu.

Peter Braid.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you, Mr. Chair.

Welcome back to the committee. It's great to have you back. We were looking forward to your presentation this afternoon, after the preview earlier in the week.

You mentioned one of the companies that's participating in the program, 2G Robotics, and you described it as an “Ontario” company. It's actually a company in my riding of Kitchener--Waterloo, just for the record, and we're very proud of it.

With respect to the businesses that are participating in the program, are they primarily start-up companies, or are they existing companies that are innovating new products? Or is it sort of a blend between both?

[Shereen Benzvy Miller]

Thanks for that question.

It's actually all kinds of companies. It's companies of inventors who have an idea, who have proposed it because it's ready to go, it's ready to commercialize, and this will help them in that last phase of testing. It's also larger companies that have already a known track record for innovation.

So it really covers the waterfront--every-sized company, in all areas, in all industries. It's really been an exciting program to watch, from that perspective.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

There are some start-up companies that are participating.

[Shereen Benzvy Miller]

Absolutely. One of the people we entered into a contract with, for instance, thought we were going to show up with a cheque and didn't realize, for example, because they had never done business with the Government of Canada, that there was going to be an invoicing involved. That's how start-up they were. They had never done business with us. They had no idea of even how the process worked.

We are working with a gamut of business people out there, and it has really been very rewarding to see people who have never done business before having this experience for the first time.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

One of the clear goals, I suspect, is seeing some of these very small companies grow and prosper and create jobs.

[Shereen Benzvy Miller]

Absolutely. At the end of the day, this is a response to the private sector's cry, which we heard loud and clear, that the Government of Canada was very hesitant to be the first buyer of innovation. They wanted the Canadian government to step up and be the tester, because that's what's called a reference buy, when they can go to other people who may be interested in their product and other governments and say “my government bought it”. That's really a good endorsement. So it is to really help, as our minister says, kick-start Canadian companies.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

I have a question about the testing process. Is testing provided to companies only in cases where there is a contract or a potential contract?

[Shereen Benzvy Miller]

Yes, the testing is under contract. We buy it. This is a procurement, so it's not like an R and D early stage of development test. It's actually a late stage of development. You have to be technology-readiness seven to nine on a nine-point scale. It really is in the pre-commercial stage, and we will test it and it has to be under contract as something we have purchased.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

I suspect that, in addition to the scenario where the company sells to government, you would be assisting these companies in selling to other customers outside of government as well. Is that correct?

[Shereen Benzvy Miller]

No, we don't. This is a procurement program, so our money is intended for purchases made for the government to test. All kinds of different departments and agencies will be the testing sites and the partners for the testing, because obviously different innovations require different testing environments.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

I am interested in the matching process, or the matchmaking process between the companies and departments. Could you explain a little bit about how that process works?

[Shereen Benzvy Miller]

That is actually a really fun part. I refer to that as the eHarmony part of the project. It's actually really great because it's very exciting when we see, for instance, people from Health Canada labs read about what we're thinking of buying and they say they have been trying to get that for so long--spectrometers and cool things.

When we originally thought of the program we thought it might be difficult to engage other departments, that they may not see a need for it, but we were completely mistaken. The enthusiasm that departments have shown for being the testing sites and the willingness to meet all the terms of the testing plans has just been phenomenal. We're trying to keep up with the demand but the demand has been spectacular.

[The Chair, NDP, Pat Martin]

That wraps up your time. Thank you very much.

Welcome, from the Liberal Party, Dominic LeBlanc.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Thank you, Mr. Chairman, and thank you to the witnesses.

The discussion around the innovation and commercialization aspects of your work is interesting. I want to bring you back if I can to the small and medium-sized enterprise piece of your work.

I represent a riding in rural Atlantic Canada. In your binders you probably have a list of success stories of small and medium-sized businesses in New Brunswick that have successfully competed for federal procurement. I hope it's a long list; don't pull it out and read it. I hope you'll agree with me that there is a general sense among some small-business people, which is probably born out of a certain ignorance or intimidation around a competitive process, that the process is getting more complicated or more burdensome, and I'm not suggesting it shouldn't be. There are examples in the past where perhaps it wasn't precise enough and there were mistakes, so we are where we are. But the business people I talk to have a general sense that either they won't be able to successfully compete because the economies of scale of a company that would be in a larger region of the country or closer to Ottawa or closer to a large urban centre may have an advantage they don't have. I'm not saying it's necessarily true, but these are some of the impressions they leave on us.

I'm wondering if you could tell us what your office has done and what more could perhaps be done. It's almost an information campaign. I know you've done some good work. As I said, I meet business people who talk enthusiastically about their success, but they tend to be younger-generation business people. I'm not sure if their parents ran the company previously. They might have been adventurous to go online and look at some MERX system. There is a general hesitancy.

I'm wondering if we can do more from a regional perspective. The same must be true in other regions of the country.

I'm not just talking about New Brunswick, but also about the regions of Quebec and northern Ontario.

I have a sense that we could do more. Your previous minister, who started this in 2005—the small and medium-sized business office—represented rural Nova Scotia. I remember he used to talk to us, quite concerned about his sense that many of them don't compete because they don't understand that they can and should and that they will be successful if they offer the best value.

I'm wondering what more we can do to change that culture—in addition to what you've already done, I think quite successfully.

[Shereen Benzvy Miller]

As I mentioned on Tuesday, we have six regional offices that work all across the country in all rural and urban centres. That has led to an outreach to about 140,000 businesses and suppliers.

But within the CICP program, a large portion of the funding for the pilot is for outreach. In the one year we've been doing this program, we have done about 350 events in order to reach out to businesses across the country. We have reached a lot of businesses across the country and are trying to leverage as many media as possible, including our 1-800 line, including newsletters, including chamber of commerce newsletters, different industry newsletters. We speak at trade shows; we speak at the various events we're invited to.

What I would say is that when people come to you and say it's hard to do business with the Government of Canada, give them my number.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

You may regret that.

[Shereen Benzvy Miller]

It's 1-800.... No, really; we are open for business.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Would you give us your cell number, maybe?

[Some hon. members]

Oh, oh!

[Shereen Benzvy Miller]

Do you know what? That won't help them. But I'll put them in touch with people who can give them real answers.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

You're right. It's a perception, often, more than a reality, but it's unfortunate, because the government may not get the best value for the money you're spending, and these businesses may not get the best chance to compete.

[Shereen Benzvy Miller]

Absolutely. The Office of Small and Medium Enterprises was created because there was a recognition of the fact that, actual or perceived, there are barriers potentially and that those barriers ought to come down in order for the crown to get the best value and in order for suppliers to have the best access. We are only too happy to be of service across the country.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

As a final question, maybe, with respect—I'm sure you've heard this before—one thing is that of those who are successful in the procurement process, small and medium-sized businesses often have difficulty with respect to cashflow. It's not only large corporate customers who may not pay their bills except at 89 days. Sometimes it may be their fault, if the paperwork and so on wasn't appropriate, but you must be hearing also that there's a concern about rapid payment.

One thing about a government cheque, I always tell them, is that it's going to clear; you don't have to worry about the thing coming back NSF. But they often wait a long time for it. I remember from when I practised law that a government receivable is about the best one you can have; you could actually bank on it. But it doesn't make them feel better, if they're waiting a long time. I'm wondering whether that's a problem as well.

[Pablo Sobrino]

That's certainly an issue. We covered some of this on Tuesday, but fundamentally we're working with the Office of the Comptroller General to ensure that there are financial policies in place for quick payment and to get payments out immediately—within 30 days, generally. We've also included this as a management measure. We assess how managers are managing, and part of it is that piece.

But it is a process. We're well aware of the problem. It also involves honouring interest on late payments; that's an additional element.