Tech Industry Identifies Obstacles Preventing Canadian Companies from Selling to Government
Bureaucracy creates obstacles for Canadian tech companies trying to sell to the government, preventing them from accessing a substantial portion of the procurement budget, according to a new report from an industry association.
Laurent Carbonneau, the Director of Policy and Research at the Council of Canadian Innovators, notes that some companies find it easier to sell to foreign governments due to fewer barriers compared to the Canadian government.
He explains that companies face institutional barriers that make it challenging to offer their products at fair prices to the Canadian government. Mr. Carbonneau mentions conversations with cybersecurity and health tech companies who find it simpler to sell abroad.
Canadian cybersecurity companies, for instance, sell three times more to international clients than to Canadian public-sector organizations, as highlighted in the report authored by Mr. Carbonneau.
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The report, published on March 3, reveals that government procurement contributes to nearly 15 percent of Canada’s GDP.
The current federal process has resulted in scandals, like the Phoenix pay system failure, and fails to effectively serve the government itself. An auditor general report highlights that a third of critical government digital applications are in poor condition.
Challenges encountered by companies include overly specific government requirements and a lack of dialogue that inhibits them from asking questions without divulging proprietary information, according to Mr. Carbonneau.
He criticizes the practice of defining specifications rigidly for software without room for innovation or adaptation during development.
The complexity of the system leads to prioritizing navigating bureaucracy over providing valuable solutions, and the lengthy process leaves companies waiting for extended periods, even years.
The report recommends learning from procurement systems in countries like the United States, the United Kingdom, and Finland. It proposes measures such as establishing an agency to facilitate interactions between the government and Canadian companies.
Furthermore, the report suggests setting ambitious procurement targets for small and medium-sized enterprises to promote their participation.
