Federal contracts favour big companies — let’s flip the script for SMEs: Senator Henkel
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Small and medium-sized enterprises represent 98% of Canada’s businesses, employ more than half of our workforce and generate nearly half of our GDP. They’re everywhere, vibrant and vital.
And yet, they continue to be dramatically under-represented when it comes to federal procurement, which is a massive economic driver accounting for 13 to 20% of our GDP.
In the Senate last June, I noted that the share of federal contracts awarded to small and medium-sized enterprises (SMEs) had shrunk from 38% in 2008 to just 20% in 2024. A dramatic drop, even as the number of SMEs continues to grow.
Why the drop? Because even though we know what the barriers are, we have left them in place.
Parliamentary reports, committees and analyses have pointed to overly complicated processes, daunting administrative jargon, different information in French and English, tender costs that sometimes exceed the value of the contract, lengthy payment delays and perception biases.
These barriers are discouraging for our entrepreneurs and hit people from under-represented groups the hardest: women, visible minorities, Indigenous people and young founders without a network. How many times have I met women entrepreneurs who were forced to drop their bid for these exact reasons?
Drawing on my experience as an entrepreneur who has faced these biases, I have chosen, as a senator, to speak out on behalf of those who are affected.
This isn’t just about red tape — it’s about economic justice. For every call for tender that is out of reach, our communities are losing out on jobs, innovation and income.
This fragility is compounded by external stressors. According to the Canadian Federation of Independent Business, nearly one in five SMEs dealing with American tariffs won’t last more than six months if nothing changes, and six in 10 say they have been affected by Canada’s own retaliatory tariffs. In this context, government procurement isn’t just an economic driver; it can become a key alternative for securing revenue and protecting local jobs.
However, this idea needs to be put into action. We can’t call ourselves “prosperous” if we keep earmarking large contracts for the same players year after year.
The government has set targets — for example, for women-owned businesses — yet the actual results, in real value, are limited to symbolic percentages. It’s time to implement clear contract terms and real economic spinoff indicators and incentives so that large companies share the value.
We need the right tools. The United States has GSA Advantage, a clear online catalogue and one-stop shop with straightforward processes for SMEs. We should do the same. CanadaBuys is too unwieldy and ill-suited to the market.
Let’s go even further. Large companies and Crown corporations should be required to set aside a considerable share of their public contracts for SMEs, beyond mere symbolic partnerships, so that the economic spinoffs are both measurable and shared. We can give tax incentives to large companies willing to walk the talk.
Let’s support networks like WeConnect and AéroMontréal, which are already developing more inclusive procurement processes. Let’s dare to focus on innovation and stop prioritizing the lowest bid, which stifles creativity and penalizes sustainable solutions.
Our SMEs aren’t asking for handouts — they’re ready, willing and able. It’s time for government procurement to become their springboard rather than a barrier.
Behind every small business, there are women and men who take risks, innovate and create jobs in our communities. Leaving them out of government procurement means cutting Canada off from part of its lifeblood. By finally opening the door for them, we’re choosing a country that’s fairer, bolder and truer to its potential. That is the Canada I believe in.
Senator Danièle Henkel represents the Alma division of Quebec in the Senate.
This article was published in The Hill Times on September 11, 2025.
Small and medium-sized enterprises represent 98% of Canada’s businesses, employ more than half of our workforce and generate nearly half of our GDP. They’re everywhere, vibrant and vital.
And yet, they continue to be dramatically under-represented when it comes to federal procurement, which is a massive economic driver accounting for 13 to 20% of our GDP.
In the Senate last June, I noted that the share of federal contracts awarded to small and medium-sized enterprises (SMEs) had shrunk from 38% in 2008 to just 20% in 2024. A dramatic drop, even as the number of SMEs continues to grow.
Why the drop? Because even though we know what the barriers are, we have left them in place.
Parliamentary reports, committees and analyses have pointed to overly complicated processes, daunting administrative jargon, different information in French and English, tender costs that sometimes exceed the value of the contract, lengthy payment delays and perception biases.
These barriers are discouraging for our entrepreneurs and hit people from under-represented groups the hardest: women, visible minorities, Indigenous people and young founders without a network. How many times have I met women entrepreneurs who were forced to drop their bid for these exact reasons?
Drawing on my experience as an entrepreneur who has faced these biases, I have chosen, as a senator, to speak out on behalf of those who are affected.
This isn’t just about red tape — it’s about economic justice. For every call for tender that is out of reach, our communities are losing out on jobs, innovation and income.
This fragility is compounded by external stressors. According to the Canadian Federation of Independent Business, nearly one in five SMEs dealing with American tariffs won’t last more than six months if nothing changes, and six in 10 say they have been affected by Canada’s own retaliatory tariffs. In this context, government procurement isn’t just an economic driver; it can become a key alternative for securing revenue and protecting local jobs.
However, this idea needs to be put into action. We can’t call ourselves “prosperous” if we keep earmarking large contracts for the same players year after year.
The government has set targets — for example, for women-owned businesses — yet the actual results, in real value, are limited to symbolic percentages. It’s time to implement clear contract terms and real economic spinoff indicators and incentives so that large companies share the value.
We need the right tools. The United States has GSA Advantage, a clear online catalogue and one-stop shop with straightforward processes for SMEs. We should do the same. CanadaBuys is too unwieldy and ill-suited to the market.
Let’s go even further. Large companies and Crown corporations should be required to set aside a considerable share of their public contracts for SMEs, beyond mere symbolic partnerships, so that the economic spinoffs are both measurable and shared. We can give tax incentives to large companies willing to walk the talk.
Let’s support networks like WeConnect and AéroMontréal, which are already developing more inclusive procurement processes. Let’s dare to focus on innovation and stop prioritizing the lowest bid, which stifles creativity and penalizes sustainable solutions.
Our SMEs aren’t asking for handouts — they’re ready, willing and able. It’s time for government procurement to become their springboard rather than a barrier.
Behind every small business, there are women and men who take risks, innovate and create jobs in our communities. Leaving them out of government procurement means cutting Canada off from part of its lifeblood. By finally opening the door for them, we’re choosing a country that’s fairer, bolder and truer to its potential. That is the Canada I believe in.
Senator Danièle Henkel represents the Alma division of Quebec in the Senate.
This article was published in The Hill Times on September 11, 2025.