The federal government is making changes to its procurement policies to buy more from Canadian small businesses.
Laurent Carbonneau,
“If implemented with rigour and transparency, these reforms can be a turning point for Canadian innovation, job creation, and public service delivery.”
CCI
Minister of Government Transformation, Public Works, and Procurement Joël Lightbound, announced the creation of the Small Business Procurement Program (SBPP) in Toronto on Monday morning. The SBPP was first announced in the Spring Economic Update, and is an extension of the federal government’s “Buy Canadian” policy.
The SBPP will roll out in two phases, with the first starting this summer. It will require federal buyers to simplify their orders so that small businesses don’t have to jump through unnecessary administrative hoops to get a contract. The government is also improving how its new AI chatbot, Procura, guides companies on doing business with the government, and standardizing procurement contracts so they’re consistent across all departments.
The second phase, intended to be implemented by the end of the year, will mandate plain language in procurement requests so it’s easier for businesses to tell if they’re a fit. There is also the new “Tell Us Once” approach, which allows businesses to re-use documentation for multiple bids,as well as new tools that let businesses know if their bids are complete and error-free before they submit.
The final component of the SBPP is the creation of a supplier recognition program for “trusted Canadian small businesses” to bolster businesses that repeat business with the government.
When the SBPP was announced in April, MaRS Discovery District CEO Grace Lee Reynolds said such a program “could open a door [that] has historically been very hard for early-stage companies to open.” Right now, only 20 to 30 percent of the value of federal contracts goes to small and medium-sized businesses, according to Public Services and Procurement Canada. The new program is meant to increase that share with measures that make bidding for government work much less of a hassle.
“Making it easier to apply is necessary and a good first step,” Lee Reynolds said in a statement this week. “Too many great Canadian companies prove themselves in pilot after pilot and then get stuck, often scaling abroad before they ever get the chance to scale here at home.”
Meanwhile, Chad Gaydos, the CEO of Vancouver-based procurement management software Procurify, said in a statement that the government’s direction is “encouraging” and that its focus on plain language and a lighter administrative load are “the same principles reshaping procurement inside growing companies right now.”
A “more flexible” procurement system
The procurement reforms are part of a nearly $186 million commitment the government made in its 2025 budget. Just under half of that was reserved for Innovation, Science and Economic Development (ISED), which has used that funding to create the Innovative Solutions Canada (ISC) program. Alongside the SBPP, the ISC will connect Canadian businesses with federal departments to develop, test, and commercialize their technologies within, so that the government is acting as a “first customer.”
The government says the ISC has so far brought in over 60 federal departments and delivered more than 1,600 grants and contracts through the program. More than 95 percent of those awardees are Canadian small and medium-sized businesses.
All these changes follow the federal government lowering the minimum threshold for Canadian-prioritized contracts from $25 million to $5 million last month, meaning Canadian businesses will get preferential treatment for smaller procurement opportunities.
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Procurement has been a boogeyman for Canadian businesses for years, with industry groups, academia, and business leaders directly calling for the federal government to overhaul its approach. Prime Minister Mark Carney put “Buy Canadian” procurement reform into motion last September and, as of June 25, 14 contracts worth a total of $726.4 million have been awarded under the new Buy Canadian Policy, according to Public Services and Procurement Canada.
The Council of Canadian Innovators (CCI) has long advocated procurement reform. In a statement, CCI vice-president of policy and advocacy Laurent Carbonneau said the new measures set the stage, but that outcome‑focused implementation is required to make sure Canadian small businesses are competing and winning government business; a sentiment Lee Reynolds echoed.
“Today’s announcement is a welcome step toward a more flexible procurement system, creating the conditions for public buying to better enable Canadian innovators to compete and scale,” Carbonneau said. “If implemented with rigour and transparency, these reforms can be a turning point for Canadian innovation, job creation, and public service delivery.”
Feature image courtesy Public Services and Procurement Canada via LinkedIn.