Evidence of meeting #26 for Government Operations and Estimates in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was procurement.
A recording is available from Parliament.
Noon
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
I’d like to begin with a question for the Deputy Minister, Mr. Marshall.
We've heard a lot of noise around “The Way Forward” initiative, of which the procurement reforms are a part. When were “The Way Forward” and these procurement reforms that we are discussing today first initiated?
Noon
Deputy Minister, Department of Public Works and Government Services
Madame Chair, “The Way Forward” is just a general description that is applied to two major initiatives that are going—
Noon
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
I don't need a definition; I just wondered when it was initiated.
Noon
Deputy Minister, Department of Public Works and Government Services
I would say it was initiated quite earlier, but things were crystallized and presented in Budget 2005.
Noon
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
That was in the 2005 budget. So it was under the former Liberal government?
Noon
Deputy Minister, Department of Public Works and Government Services
That is correct.
Noon
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
The reason why I ask this question is because we’ve heard a lot of fine words, especially from the Liberals, who are trying to convince people that they are against these changes.
Mr. Proulx, for example, talks like the great defender of small and medium-sized businesses. He is now opposed to these changes, but they were initially proposed by his party and his government. I would like it to be clear: these changes were implemented by the former Liberal government. The discussion must be an honest one. If we want to talk, all the facts must be on the table.
I never heard a single Liberal MP express opposition to these changes when the Liberal government was setting them up. That is an important fact that must be acknowledged.
I would also like to speak on the question of reverse auctions. Was the idea of reverse auctions considered in the original “The Way Forward” changes to procurement?
12:05 p.m.
Deputy Minister, Department of Public Works and Government Services
No, this is a technique that, at that level, was not planned originally, but access to introduce the latest and the best techniques that industry was using was part of the plan. As we became aware of it, we considered it.
12:05 p.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
It was just something that came under consideration progressively over time.
12:05 p.m.
Deputy Minister, Department of Public Works and Government Services
Correct.
12:05 p.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
But, Minister, you have made the decision that reverse auctions will not be part of procurement changes.
12:05 p.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
I just want to be clear about that, because I have heard a number of complaints from my constituents about the prospect of reverse auctions.
A lot of my constituents are small and medium-sized suppliers of goods and services to the government, and there seemed to be a bias, particularly under the previous government, against those small and medium-sized enterprises. I had this debate with the former Treasury Board president, Mr. Alcock, and the former Public Works minister as well, who both presented a bias toward large enterprises.
I'm glad to hear that you've shifted, that there is a new mentality in your office. What I've heard from you today is that you believe the future is with small and medium-sized enterprises, and that you have actually put together a target for increasing market share of government procurement for small and medium-sized enterprises. Is there any data that you can help provide to all of us on the competitiveness of small and medium-sized enterprises, compared to the larger enterprises that were favoured by the previous government?
12:05 p.m.
Minister of Public Works and Government Services
Thank you for that question, Mr. Poilievre.
In terms of the data, we can provide that to you later. Just to make things clear, we believe—I believe—that it's important to give them a larger market share because we will all benefit. We, as a client, and we, as Canadians, will be creating more wealth in our communities.
Just taking up on what Monsieur Proulx was saying, in French they're called PMEs and in English they're SMEs, and then they're out of SMEs and they become large enterprises. That's exactly what we're doing with the military procurement. We're insisting that these moneys be invested in Canada in aerospace and defence, because we want to create champions that can bid on international G-8 or NATO contracts in those particular industries. We want to create wealthier, larger, more profitable companies in Canada that will not only supply us with more creative and better goods at better prices, but will be able to supply other clients around the world with the same goods and services.
12:05 p.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
But the situation in which you find yourself is very difficult. As you have just said, you inherited a situation in which small and medium-sized businesses only made up 29% of suppliers. That is a situation you inherited from the previous government. I wish you good luck in your work. It is very important for the small and medium-sized businesses in my riding.
My constituents are hoping you succeed with the transformation that you are proposing, in order to give them a greater chance, a fairer chance, at procurement business. I think it will be good for taxpayers and it will be good for job creation. I'm very pleased to see the departure that you have taken from the approach of the previous government, which favoured the very large multinational corporations. I just want to congratulate you on behalf of my constituents for that.
12:05 p.m.
Liberal
The Chair Liberal Diane Marleau
I'm going to tag on a little bit here, because I'm hearing such wonderful and wild things. Having been in your job, I know how difficult it is, but everyone talks about small and medium-sized enterprises. Can you tell us what your definition is of small and medium-sized enterprises?
12:05 p.m.
Minister of Public Works and Government Services
It's not my definition; it's the definition of industry, and it's the definition that is used across the board in government. An SME is a company with less than 500 employees.
12:10 p.m.
Liberal
12:10 p.m.
Minister of Public Works and Government Services
No, it includes companies with less than 500 employees.
12:10 p.m.
Liberal
The Chair Liberal Diane Marleau
I hear that you've opened some regional offices, but your regional offices are, of course, all in capitals. I define regions as not only capitals, so will you give them an order to go away from the capitals and go into other regions?
I represent an area in northern Ontario that is not close to the capital, but it does have small and medium enterprises. I'm sure there are a lot of other regions outside of Montreal in Quebec. And we can go across the country. If I may suggest it, I think you should try to reach out further than just Toronto and some of these regions, because if the people in Toronto don't know how to do business with government, there's something very wrong somewhere.
12:10 p.m.
Minister of Public Works and Government Services
Thank you for the question.
If I left that impression with you, I misspoke. These offices are based in those cities for two reasons. One is that there are rather large clusters of SMEs around those cities. In terms of saving money as well, we already had offices in some of these cities and we could move people.
But as I said earlier, Madame Chair, I made it clear to my people and to the people running the Office of SMEs that they're supposed to be on an outreach program. I want them to go out there and meet as many boards of trade as they can, reach out to SMEs to tell them we're open for business, and explain to them how they can access the MERX system, which is our electronic tendering system.
And by the way, we have eliminated the fee for MERX. Under the previous government, there used to be a fee to access MERX, but there isn't one any more. For people accessing MERX, it doesn't cost them a penny. They can do it from their home, their business, or their basement.
So that message has been transmitted to the people running the office.