Canada Needs a Feminist Small Business Procurement Strategy

Dr. Barbara Orser¹
Full Professor, Telfer School of Management, University of Ottawa

The imperative of securing such goods as vaccines and PPE has placed Public Services and Procurement Canada (PSPC) in the media spotlight. Canada’s central purchasing agency has been mandated to increase procurement from small and medium-sized enterprises (SMEs) owned by members of designated groups.

In 2020 the federal government announced the establishment of a set-aside for Black-owned and Black-led businesses. This action begs the question as to why preferential procurement measures to support other designated groups were not included. The decision is particularly puzzling in light of the 2020 Fall Economic Statement that expresses the need for a feminist recovery strategy. The plan stipulates that federal policies must be evaluated on how measures affect women, men, youth, members of the LGBTQ2+ community, persons with disabilities, racialized and Indigenous peoples. Beyond branding policies feminist, inclusive recovery requires a procurement plan to support all designated groups of entrepreneurs.

What might a feminist small business procurement strategy look like? It must reflect the need to secure domestic supply chains and employ procurement as a strategy to support economic and social development. Fostering innovation is implicit. In a collaborative Telfer School of Management and PSPC study, federal SME suppliers were found to be significantly more innovative than firms that do not contract with the federal government. Federal SME suppliers were 43 percent more likely to report at least one type of innovation and 21 percent more likely to report multiple types of innovation.

The Telfer/PSPC study also found that women-owned SMEs are underrepresented as federal suppliers in some sectors, but not all. Accordingly, a feminist small business procurement strategy must include sector-specific measures. A one-size-fits-all approach is an inefficient deployment of public resources.

We must employ lessons learned from preferential procurement measures in the United States. The US federal government targets 23% of its annual dollar spend to SMEs and 5% of its spend to women-owned businesses. A Feminist Economic Recovery Plan for Canada released by the YWCA Canada and University of Toronto’s Institute for Gender and the Economy (GATE) recommends a minimum 15% spend targeted at businesses led by equity-seeking groups. Setting such targets makes sense.

Emulating the longstanding US set-aside program is not recommended. A 2018 Telfer-led study found that none of the US set-asides increased either bid frequencies or contracting success, including the set-aside for women-owned SMEs. The Government of Canada must design measures to be more effective and to be required to report on the uptake and impacts of set-asides. Again, Canada can draw insights from the U.S. Government Accountability Office’s (GAO) audit of the women-focused US set-aside program. The GAO found that a high proportion of firms that self-registered for the set-aside, purporting to be women-owned, did not qualify. In the interests of equity, users of all set-asides must meet the qualification requirements. Third-party certification of ownership is recommended.

A feminist small business procurement strategy should be linked to key trade, labour and other economic and social policies. Clarification of international trade provisions thought to impede preferential procurement in Canada is essential. Only the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), for example, does not include a carve out provision for protecting designated groups.

Finally, lack of independent analytical capability within government procurement agencies compromises policy formulation. Lack of verifiable evidence lends to disagreements among stakeholders, political opportunism, and instability of SME policies in support of Canada’s designated groups. Canada needs a feminist small business procurement strategy. As a Chatham House report on preference procurement concludes, the ‘diversity dividend’ creates jobs and economic growth, and is one of the most powerful tools that signatory governments have to achieve the UN Sustainable Development Goals.

¹This article draws on Orser, B., Liao, X., Riding, A., Duong, Q., & Catimel, J. (forthcoming). Gender-responsive Public Procurement: Strategies to Support Women-owned Enterprises, Journal of Public Procurement.

About Dr.Barbara Orser

Professor Orser is a Full Professor and the Deloitte Professor in the Management of Growth Enterprises. Her research, teaching and advocacy focus on entrepreneurship and women’s economic empowerment. Advisory roles include a Women20 (W20) Acting Head of Delegation Canada, UNWomen WE Empower Advisory Group Canada, board member of Women’s Economic Imperative, editorial board of the International Journal of Gender and Entrepreneurship, and Global Women’s Entrepreneurship Policy Research Group. Know more about her.

About WBE Canada

Women Business Enterprises Canada Council (WBE Canada) is a Canadian non-profit organization working closely with corporations and governments advocating for inclusion of Canadian Women Business Enterprises (WBEs) in supply chains across Canada and abroad. To ensure diversity in supply chains WBE Canada works closely with its Corporate and Government members to provide necessary training and support to help establish and develop supplier diversity initiatives. Explore our Corporate/Government membership here.

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