Thanks a lot, George.
What I'd like to do is take you through this deck and give you a bit of insight into what we're doing in the Office of Small and Medium Enterprises and how we're helping smaller companies do business with the Government of Canada.
On slide number ten there's an outline of the four areas I'd like to cover. The first one is the role small and medium enterprises play in the economy. Second are the kinds of concerns and challenges smaller companies face in doing business with the Government of Canada. Third is our mandate and how we help small and medium enterprises do business with the government. Finally are some recent examples of the impact the office is having in helping smaller companies increase business opportunities with the government.
I have to point out that the Office of Small and Medium Enterprises was established in September 2005. Then last spring the government made a decision to add six new regional offices to what was, at that time, only our headquarters office so we could reach out to smaller companies right across the country. Those six offices were established this past fiscal year. So the last fiscal year was kind of a phase-in period in which those offices were getting up and going and getting staffed with people. This fiscal year that we're just starting now is our first fully operational, fully staffed year as an office.
Slide number 11 speaks a bit to the importance of small enterprise in Canada. Of the roughly 2.4 million companies in Canada, 2.33 million are small and medium. So there are very few large companies in Canada. Smaller companies account for 45% of GDP and 66% of employment. And they're ubiquitous right across the country.
The bottom half of the slide shows how smaller companies have interacted with government procurement over about two years, from January 2004 to September 2006. So that's two and three-quarter years. Almost 80% of the total number of contracts that George Butts was talking about earlier are with small and medium enterprises. About one-third of the value of the contracts are won by small and medium enterprises.
Slide 12 gives an overview of the concerns of smaller companies, which they have expressed to us. We interact with small companies right across the country on a daily basis. These five issues, or challenge areas, for smaller companies were identified in the first few months of our existence and have been maintained since then. There's a clear consensus among companies as to what their challenges are.
First is access.
Second is accountability, in the sense of transparency. They're always telling us that there are improvements that can be made in transparency and in ease of accessing information.
Renewal means procurement renewal--the approach we take to that--and being mindful of ensuring that smaller companies continue to have access.
Complexity is a problem. Smaller companies don't have a lot of time to pore over complex documents. What can we do to improve that?
Finally is the socio-economic challenge. This is the aboriginal set-aside program, access of regional firms to opportunities, green procurement, environmental impacts, and innovation--that is, buying innovative products from companies.
I'd like to mention just one quick overview point on this to indicate the nature of how we have responded to these challenges. First of all, on the complexity issue, the department has been simplifying the language and templates and standardizing the language and templates in all the requests for proposals that go out from the department, from the smaller, simpler proposals all the way up to the very large and complex ones. We have templates now for all these different types, including standing offers, and we're using them now. It makes it a lot easier for a company.
We've front-end loaded the crucial information that a company would have to see about a particular request for proposal to know whether it's something they need to get involved in. So on the first two to three pages, all of the key information of what we're looking for, how big the order is going to be, and who you have to contact about, all that is right at the front so that a company can make a decision fast and doesn't have to search through the document to find the information it needs. That's just one example of what we're doing in making things simpler for them.
What we're doing on access is a couple of things. The key problem that smaller companies have is scale. Because they're small, it's difficult to respond to a large-scale requirement, whether the large scale is just the size of an order, or whether it is the breadth of product line that you have to supply, or whether it's the geographic scope you have to deliver to. What we've been doing in designing new requests for proposals is we've been trying to design them in such a way that smaller companies aren't inhibited from being able to bid by those three constraints.
First, in terms of just the size of the order, we're developing tiers, so that for smaller-scale orders you can bid solely on them if you want, and the requirements for those are leaner requirements than for the very big ones, so that smaller companies have access and can move up a ladder. Secondly, on product breadth, we're often taking the full product breadth of what we need and dividing it into vertical components and allowing companies to bid on one or more of those subclasses of product. Thirdly, on geography, we're continuing to use regional master standing offers so that regional firms have the choice of bidding only in their regional area of operation and capacity of delivery. They don't have to bid, necessarily, nationally. I just want to give you a conceptual understanding of the ways we're responding to these issues.
On slide 13, this describes the mandate of the office. We basically do two things. First, we reach out to smaller companies to understand their issues and to equip them with the information, through our regional offices, that they need to understand the procurement system and identify their business opportunities better. Secondly, we work within the procurement system to try to identify with our colleagues, like George Butts, ways that we can design our procurement plans so that smaller companies have an opportunity to bid. So these are the detailed things we do, but basically those are the two big functions.
On slide 14 and the following slides after that, I just want to give you a brief overview of some of the impacts that we've measured in recent months. First, on engaging smaller companies and trying to interest them in doing business with the government, we've had 3.3 million visits on our Business Access Canada website. We'd seen that over 8,000 new suppliers have registered this past year to do business with the Government of Canada.
On slide 15, on assisting and informing smaller companies on procurement opportunities and how the procurement system works, we responded to over 7,000 inquiries from smaller companies, asking for help about “How do I do business with the Government of Canada?” We've staged over 300 events, often cooperatively, with the provinces to inform groups of small and medium companies on how to do business with the government. That has had roughly 6,200 participants. These numbers represent the phase-in year. We're going to try to increase these numbers significantly in this coming fiscal year.
On slide 16, on procurement policies that the department has modified to ensure access, we have two examples I want to show you. First of all, for office supplies, the number of smaller companies has increased from 24 to 68 across the country. In the case of servers, and these are the computer servers that your desktop goes to when it needs to be connected elsewhere in the system, the SME involvement as qualified companies has increased from 21 to 42. From 2004 to 2006, the percentage value of contracts that have been won of the total by small companies has increased from 24% to over 30% last year. The trend is upward.
On slide 17, the last slide, we're also improving our ability to analyze the participation of smaller companies in procurement and also what the impact of procurement is on the economy, regionally and nationally.
I want to share a couple of pieces of information with you. First, when we buy goods and services, the labour costs imbedded in all of those products to the companies we're buying from is equivalent to approximately 140,000 full-time jobs in the economy. Second, we buy $12 billion in Public Works, and after you use the multipliers and Statistics Canada's input-output model, the CANSIM model, the total impact on the economy is $19.5 billion a year from our $12 billion in procurement.
We're working diligently now with Statistics Canada and Industry Canada to deepen the specificity of this information. We're looking at different industry sectors and different provinces as to what the impacts are there. We will have the capacity soon to go all the way down to individual cities.
Thanks very much.