Government Operations Committee on Oct. 4th, 2011

[Mathieu Ravignat, NDP, Pontiac, QC]

So basically, the 500-employee criterion and the name of the program have no relevance.

[Shereen Benzvy Miller]

Quite the opposite, with all due respect, they are relevant since 99% of all businesses in Canada are SMEs. We dedicate ourselves to them. It is true that our organization could have been called the Office of Canadian Enterprises. The fact remains that most of them are SMEs and that our mission is to help them.

[Pablo Sobrino]

I would simply like to add that the program is managed so as to have us be present in communities, and we conduct seminars there outside of business hours. The businesses are targeted by this program, which is structured to help small entrepreneurs who do not have the necessary time to leave their offices during the day.

[Mathieu Ravignat, NDP, Pontiac, QC]

Ms. Benzvy Miller said the opposite.

[Pablo Sobrino]

No, the program is managed so as to target small businesses specifically. Someone who phones to obtain information can also use the website. In fact, anyone can use it. The program is structured so as to reach entrepreneurs who don't have time to access our services during the day.

[Mathieu Ravignat, NDP, Pontiac, QC]

Thank you.

[The Chair, NDP, Pat Martin]

That's it, Mathieu.

Ron Cannan, go ahead, please.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

Thank you to our guests here this afternoon.

We know this government is focused on the economy, on creating jobs, paying down the debt, balancing the budget, and working with our small businesses, which are the economic engine that drives our economy.

I sit on the trade committee as well, and earlier today we met with the trade commission services that work with the Business Development Bank of Canada, BDC. Do you operate in an integrated way with any of the other federal departments within some of the smaller communities across Canada? Or have you ever thought of working in partnership in that way?

[Shereen Benzvy Miller]

Thanks. That's a great question.

We work very closely with all kinds of partners. Our focus is really on outreach. We try to maximize the government's outreach by going out with partners to trade shows, to special events, and to the chambers of commerce. We go together so we can actually have an organized response to the needs of these various business people. For example, we work closely with Indian and Northern Affairs on the PSAB program to do outreach to aboriginal entrepreneurs related to the aboriginal set-aside program. We go out with the BDC. We go out with any departments who are interested in doing outreach to small and medium-sized businesses across the country to give them any information about the federal government's programs that might help them.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

My colleague, Mathieu, was talking about the size. A small business can become a big one quite quickly. I represent a beautiful riding in Kelowna Lake country in the Okanagan. There were three animation artists who worked in their basement and all of a sudden sold their company to Disney for $325 million, and they have over 400 employees now. We're going to grow from that seed that was planted. Some members of the animation industry are on the Hill here today. We're working with that very robust industry and trying to help feed into that.

For some of the small business sectors I've spoken to in our community it's a bit daunting sometimes. They feel it's cumbersome. They're trying to find their way into MERX. I know the Canadian Federation of Independent Business have commented in the past, and we get our comment sheet from CFIB members. What have you done to try to make the process a little easier for them?

[Shereen Benzvy Miller]

That's a great question. We work every day to respond to the barriers that are raised. In fact, we work with the CFIB and other associations whose members might give them feedback and that do their own surveys. We use that information to try to help break down the barriers in government.

I would say that our work is really in two packages. One is outreach, obviously, through creating buyandsell.gc.ca, through the 1-800 line, through the seminars we do, through attending trade shows, and through all the face-to-face or grassroots interaction we have with those vendors. We also try to actually bring back the feedback they give us. This is the second half of our work, which is why I'm also the director general of the client engagement sector. We try to bring that feedback back into government so that government can be responsive in the way in which we do procurements and we can be asking ourselves the right questions to make it easier and not as complex to do business with the government.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

As a former small business owner, I appreciate your making it easier.

One other aspect in small business is cashflow. Cash is key. You have to keep paying the bills. One thing we heard last week from the procurement ombudsman, who testified before our committee last week as a witness, was about the delays in getting payments to small businesses. Have you heard that as well? If you have, is there some way you're trying to expedite the process, so that the “cheque is in the mail” and “the government is here to help you” kind of thing?

[Pablo Sobrino]

Yes. We try to make it so that when the cheque is in the mail, it's actually in the mail.

We're working with the Comptroller General at Treasury Board, who sets the policy framework for financial management, to drive home the point that we have to make our payments quickly. There's something called the management accountability framework that's being instituted in the federal government. It's how managers are measured. Within that management accountability framework, they've added an element about payments. You have to reduce the number of late payments. As well, at PWGSC, if there is a late payment, we pay the interest, which we think is a good practice. That is a practice we're trying to get instituted across the system. It's an incentive to pay quickly.

[The Chair, NDP, Pat Martin]

Your time is up.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

That's it? Well thank you very much.

It's great news. Keep up the good work.

[The Chair, NDP, Pat Martin]

Thank you, Ron.

From the Liberal Party, we'll have John McCallum, please.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you, Mr. Chair, and thank you both for being here.

I want to have a bottom-line approach. What impact do you really have? On one hand, I was impressed by the positive comments from the Canadian Federation of Independent Business on your website. I fully accept that it's a good website.

If you're here to help small businesses get procurements, and you've been operating for about five years, then I would think it doesn't help us very much to say that you've assisted 140,000 individuals and suppliers, because that doesn't tell us whether the assistance did anything, at the end of the day.

I would be interested in knowing whether, of all the procurements by the Government of Canada, the percentage obtained by small business has been going up or down since you started business. I would think that might be an actual target. If you want to help small business, and you're successful, one would expect over time that small businesses would get a rising share of the contracts. Another way of looking at it, which is similar, is to ask what proportion of the contracts, the procurements, small businesses get--let's say it's 30%, just to throw out a number--and what percentage of jobs or sales are accounted for by small businesses--let's say it's 50%. You'd want that 30% to 50% gap to get smaller over time. That way, one would have a better idea as to whether your program has in fact helped small businesses get more procurement business. Do you have any information of that kind?

[Pablo Sobrino]

First of all, it is very difficult to make the link between the service we provide and the number if we're changing the shape and volume of small businesses in terms of contracts. In terms of volumes, they have been pretty steady over the last five years. They're around 38,000 per year in terms of the number of contracts let to small to medium enterprises. About 70% of what we let at Public Works goes to small and medium enterprises, and it's about 38,000 a year. It has varied over that time from a high of about 42,000 to a low of 36,000. It moves around a bit.

The main thing we're working on is trying to reduce the amount of time involved in engaging in the contract arrangement. We're doing that in several ways.

I don't have an answer as to what those metrics are. That's what we're beginning to start to track. The use of this site is giving us the information date to start that kind of tracking. We have been in place for five years, but the work here is really a work that has begun over the last year and a half to two years.

[Shereen Benzvy Miller]

May I just add to that?

There's another measure from businesses, which we're very interested in—is it easier, less painful, and therefore cheaper for them to engage in doing business? So the cost of bidding, for example, is something we're very interested in and we will be exploring. We have been trying to work, actually, with CFIB to get some information on that, so that will be one measure.

But overall, the total amount of dollar value has gone.... The last time we testified it was in the $4.7 billion share for a small business and now it's up in the mid $5 billion. So the overall share of business has increased.

But as I said previously, I'm not entirely sure that OSME can take a causal—

[John McCallum, Liberal, Markham—Unionville, ON]

Okay, but I think it would be interesting to have the data on the time it takes and the cost and how that has changed over time—

[Shereen Benzvy Miller]

And that's what we're going to try to get.

[John McCallum, Liberal, Markham—Unionville, ON]

—and whether you have therefore had an impact.

You say the number of contracts has fluctuated from 36,000 to 42,000. Has it shown any trend up or down?

[Pablo Sobrino]

There is no trend. There hasn't been a decrease, but there is no trend upwards or downwards.

[John McCallum, Liberal, Markham—Unionville, ON]

Would it make sense for your group to have some target on either the time or the cost or the share of small business in total procurement?

[Pablo Sobrino]

Well, what we measure is fair, open, and transparent, so that small and medium enterprises have fair access, the information is open, and what the contract was at the end of it was transparent to all, so they can make proper business decisions. That has been our focus as we got this going, and that's part of what we're trying to do with this site, which is to make that information available.

We agree that we want to have metrics, and that's what we're developing—those metrics—but they're not in place at this point.