Evidence of meeting #11 for Government Operations and Estimates in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was smes.
A recording is available from Parliament.
Chief Executive Officer, Amika Mobile Corporation
Oh, BDC is the dinosaur of venture capital in this country--
Chief Executive Officer, Amika Mobile Corporation
--and I don't mind saying that very publicly. I think it would be a huge mistake for the Government of Canada to rely on an entity.... As an entrepreneur for 13 years, I've had a lot of experience with financing. This is not a good solution.
Liberal
The Vice-Chair Liberal John McCallum
Okay. I cannot abuse my position and take more time than I have.
Liberal
The Vice-Chair Liberal John McCallum
We have a very short time for the other three to comment if they wish to.
President, SageData Solutions Inc.
To add to the BDC thing, we used to take money from BDC, but we don't anymore, so I think that says a lot. I love SR and ED now. I love IRAP.
The point you make is right. Because we're not just running a business. We're doing many things. You don't want to have to lay people off, so part of the expenditure that you plan is to make sure that you can maintain it. Having a known source of revenues is important, and SR and ED and IRAP go a long way towards giving us that confidence.
President, SageData Solutions Inc.
In terms of the stretch budget, yes: set a target and go for it.
Former Chair, Canadian Business Information Technology Network
I agree with the target. I can't speak much on the topic other than as a small company that has benefited from SR and ED. It certainly was beneficial to us.
It promoted the development of products that we think are beneficial to society, for that matter, and we commend the new programs that are coming under SR and ED, but at the end of the day, we wish more money would go into promoting small business, because we believe that's where the real innovation comes from.
The more emphasis we can put on promoting small business in government procurement contracts, the better the government will be.
Liberal
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
Thank you, Mr. Chair.
I would certainly like to echo the comments around the table about Small Business Week and the Year of the Entrepreneur. As for the economic engine that drives our economy, 98% of the businesses are small businesses. I represent an area in the Okanagan in the interior of British Columbia. It's very vibrant and it is small businesses that keep our community that way. We have some larger businesses--some aviation and forest industry--but small businesses are the backbone.
I was at one business last week for their second-year anniversary. Their sales have grown 44%. It's aviation electronics. They commented about their appreciation of SR and ED, but about the complications, again, of having to hire a consultant to get through the bureaucracy.
I would like to follow up on the chair's comments about the Jenkins report. He said it was an expert panel. I think we heard from Sue about her successful business and her experience.
I'd say you're an expert, Sue, so let's define what an expert is.
There is the aspect that it's people who have experience on the ground. I've heard similar comments about putting the money into BDC and government going to venture capital, which just seems like an oxymoron, to my mindset.
I'd like to hear a bit more of your perspective on how we can particularly improve the process of procurement.
Also, Jeff and Cathy, you might not have the specific information right now, but perhaps you could provide to the committee an example of how the SMEs have been basically prevented...or discriminated against by having procurement refused. If you have any specific cases, I'd be interested to hear about them.
Former Chair, Canadian Business Information Technology Network
Were you around last year for GENS? That was the last time I gave testimony at this committee. That was a specific attempt to push out small and medium-sized enterprises, to give what started out as one large contract but turned into two large contracts. Their answer was to provide a set-aside for small business through whoever won the contract. It was basically bundling everything together and the one winner would take all. We saw that as a direct attack on small business.
I think we are constantly concerned about this type of mentality that's really out there, that “one throat to choke”, and the only way you're going to do that is to give it to one company. As I mentioned earlier, we constantly see RFPs. We can certainly provide you with examples where the bar is too high,for no relevant purpose. Why exactly does a company that is going to deliver services for less than $1 million have to be a $20-million company? It just doesn't make sense.
We can certainly provide you a lot of examples.
Chief Executive Officer, Amika Mobile Corporation
One suggestion I would make with respect to improving the procurement process for an SME would be to take a little bit of a different strategy.
I believe the reason that IRAP is so successful working with SMEs and getting the money that you want to get deployed out to SMEs is that they have the notion of this ITA, the industrial technology adviser, who works directly with a group of SMEs. Ours, for example, works with hundreds of SMEs. He has a very big group of companies that he has to work with. They're all SMEs. What I've seen from their attitude or their approach is that as soon as the government announces an IRAP fund, they start working extremely actively with all of their SMEs to try to get them to benefit from this.
So I would say try to bring that over to procurement. You need ITA-like people in the OSME office who become more than our guides; they become almost our champions. They help us cut down the process and the paperwork and the reporting.
We still have to do it all, because we know that everything is going to get audited, etc., and we do all of the time sheets. We do all of that stuff. But when you have somebody there who says to you, “This is the template, you have to work in this, and everything has to fit in here”, it becomes less of an unknown when you're dealing with these contracts and people.
With respect to RFPs, I think there has to be almost a mandate that says x amount of the Government of Canada budget has to go toward SMEs, or, if you win a contract as a large company, you have to bring in SMEs, and this is how much of this contract is going to be awarded to make sure that there is SME involvement. The United States does that, but we don't do that.
President, SageData Solutions Inc.
I'm looking at procurement in a different way. From my point of view, we just need a simpler process. We need to take out some of the restrictions.
Once we've dealt with the technical issues that we need to settle to end up with procurement, then we get caught in all sorts of things. Take the $25,000 limit. I don't know how long that's been there, but that directly affects my company. I'm faced with a choice. It's a $20,000-deal: if I bid $28,000, I've lost it, so let's bid $23,000; there's less profit, but at least I get the deal.
Those are the things we need to look at taking on.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
Okay.
To the chair or the clerk, maybe we can put a question to the department on how the $25,000 arbitrarily came about, how they evaluated it. Does it increase with inflation or does it ever get reviewed? That's something that I think we should expand on in our investigation as a committee as well.
Liberal
The Vice-Chair Liberal John McCallum
We have the NDP, and then we have the Conservatives, so if you want to pursue this in your next turn, go ahead.
I will now give the floor to Denis Blanchette.
NDP
Denis Blanchette NDP Louis-Hébert, QC
Thank you, Mr. Chairman.
My first question is for Ms. McCallion.
You are the second person in the course of two meetings who has suggested that responsibility be transferred from Public Works and Government Services Canada to Industry Canada. This is beginning to pique my curiosity. I would like you to tell us more about this and why you believe that this would be more effective.
Board Member, Canadian Business Information Technology Network
We were making this recommendation because we feel that OSME under PWGSC would have to go up to bat against their colleagues in procurement. Under Industry, I think there would be a separation of that colleague environment; they wouldn't have to go to bat against their boss. Obviously, within PWGSC, OSME would have to speak out against their colleagues and the people they report to. We would like to see that separated out to Industry Canada so there isn't that butting of heads within the same organization.
NDP
Denis Blanchette NDP Louis-Hébert, QC
All right. In that case, we are talking more about a separation in terms of governance than anything else. The management is not related to the mission of the departments. So what you are really talking about is a matter of governance and relationships between the people working for the office and their colleagues.