Bureaucracy is making it too difficult for Canadian tech companies to sell to the government, according to a new report from an industry group — and all that red tape is preventing them from accessing a larger share of the billions spent on procurement.
In some cases, companies find it easier to sell to foreign governments, says Laurent Carbonneau, director of policy and research at the Canadian Council of Innovators, which has represented the Canadian technology sector since 2015.
Companies want to “sell a good product at a fair price to the government, and they find it very, very difficult to do so because there are many institutional barriers that prevent them from doing so,” argued Mr. Carbonneau in interview.
He says he has spoken to companies in the cybersecurity and health technology sector that are able to sell to other countries “without too many problems.”
“In fact, they do it with enthusiasm and they would like to be able to sell to Canada, but their own governments make it very difficult for them. »
In the cybersecurity sector, Canadian companies sell three times more abroad than to Canadian public sector clients, indicates the report co-authored by Mr. Carbonneau.
The report, released Wednesday, indicates that purchases by different levels of government represent nearly 15% of Canada’s GDP.
The federal process has led to scandals, such as the Phoenix pay system failures, and does not serve the government’s own goals, he said, citing a 2023 Office of the Auditor General report that found a third so-called “mission-critical” federal government digital applications were “still considered to be in poor condition.”
Businesses face obstacles such as the government being too specific about what it wants and a lack of dialogue that prevents companies from asking questions without risking giving away trade secrets, Mr. Carbonneau said. .
“It’s very easy to specify what you need and say, OK, now everyone is competing on price and we need exactly this and nothing else,” he said. declared. This is actually a very, very bad way to purchase software and any type of innovative product whose parameters can change during development. »
Having a very complex system means that what matters, ultimately, is “your ability to navigate the system and not actually what you bring to the table.”
The process is also long and tedious, meaning companies can wait months or even years, according to the report from the Canadian Council of Innovators.
“Layers of bureaucratic approvals, while individually justifiable, lengthen the process beyond reasonable time frames for commercial entities,” it reads.
Canada could draw inspiration from the systems of other countries, such as the United States, the United Kingdom and Finland, underlines the report. He suggests the federal government could copy Finland by creating an agency or using an existing agency to serve as a bridge between the government and Canadian business.
The government should also “consider a direct instrument in the form of an ambitious public procurement target for small and medium-sized enterprises,” it says.