Good morning. Thank you, everyone, for having the CFIB appear here today.
The CFIB is a non-partisan, not-for-profit organization representing more than 103,000 small and medium-sized enterprises across every industry and region of Canada.
My name is Michelle Auger. I'm director of trade and marketplace competitiveness at the CFIB.
Generally speaking, SMEs support the objective of strengthening domestic supply chains, especially in the context of the ongoing trade tensions and tariff pressures facing Canadian businesses. The federal government's efforts to advance a buy Canada approach are certainly a reasonable response aimed at supporting domestic industry and economic resilience.
It's important to make sure that SMEs are included. Federal procurement needs to be accessible, not just to large firms but also to the small businesses that drive jobs, innovation and local economies.
Today, SMEs are operating in a very challenging environment that is shaped by trade tensions, higher costs, labour challenges and growing regulation. Canada is also facing an entrepreneurial drought. More businesses are closing than are opening. Fewer owners are willing to invest, expand or encourage others to become entrepreneurs. In fact, CFIB data shows that 55% of small business owners would not recommend starting a business today. Procurement can be a powerful economic lever, but only if it improves access, increases competition and supports SME participation.
Only 12% of CFIB members are currently involved in selling goods or services to the federal government, with businesses in retail, wholesale and construction more likely to participate. However, significant barriers to awareness and participation remain. Based on a CFIB survey sent to our members just last week—this is preliminary data—regarding the new buy Canada policy, we found that 5% of SMEs said they were aware of new federal procurement opportunities and had actually applied, 31% were aware but had not applied, and 51% were completely unaware that these opportunities existed at all. The same survey showed that 77% of SMEs agree that federal procurement rules tend to favour large firms over small and medium-sized businesses; 66% agree that even with the buy Canada policy, the procurement process remains too complex for their business to participate; and 71% agree that lowering minimum contract sizes would make procurement opportunities more helpful for small businesses.
These results highlight a consistent message from SMEs: The effectiveness of a policy depends not just on the intent but also on whether the system is practical, accessible and easy to navigate.
A buy Canada approach can help strengthen domestic supply chains and regional development and expand opportunities for Canadian businesses. However, we are concerned that many SMEs may still be left out. The $5-million threshold coming into effect on June 15 is still very high for many SMEs, meaning that many will not be able to access or benefit from these new opportunities.
A key way to improve access for small businesses is to debundle contracts, allowing SMEs to compete for smaller, more manageable opportunities.
SMEs continue to face administrative burdens—for example, obtaining a security clearance or preparing policies that go beyond the occupational health and safety mandatory requirements, such as supplier codes of conduct, ethics policies, etc. These requirements can discourage participation in federal procurement. This points to the need for simpler tools, standardized templates and scaled requirements for smaller firms.
Another key concern with the buy Canada approach is the risk of focusing too narrowly on the raw materials while overlooking Canadian SMEs and the broader economic value they generate. As a result, small firms that create Canadian jobs and economic activity could be excluded from buy Canada procurement opportunities. To reflect the operational realities of SMEs, eligibility should instead focus on ensuring that Canadian-owned and operated businesses, regardless of where their inputs are sourced, have access to the buy Canada policy.
Finally, we're also concerned that conditions such as project labour agreements, union-exclusive community benefits agreements and prevailing wage requirements tied to specific collective bargaining structures would reduce competition and make it harder for many small businesses to participate.
In conclusion, SMEs support the intent behind the buy Canada policy, but it must work for businesses of all sizes, not just the large ones. To achieve that, the government needs to improve awareness and the accessibility of procurement opportunities, reduce any structural or administrative barriers, and ensure fair, competitive access for SMEs across the country.
Thank you.