Dated: Monday January 23, 2023
Addressed to:
The Honourable Chrystia Freeland, MP - Deputy Prime Minister and Minister of Finance
The Honourable Helena Jaczek, MP - Minister of Public Services and Procurement
The Honourable Marci Ien, MP - Minister for Women and Gender Equality and Youth
The Honourable Marie-Claude Bibeau, MP - Minister of Agriculture and Agri-Food
The Honourable François-Philippe Champagne, MP - Minister of Innovation, Science and Industry
The Honourable Omar Alghabra, MP - Minister of Transport
The Honourable Patty Hajdu, MP - Minister of Indigenous Services and Minister responsible for the Federal Economic Development Agency for Northern Ontario
The Honourable Mary Ng - Minister of International Trade, Export Promotion, Small Business and Economic Development
From:
Gunjan Syal (She/ Her)
Founder and CEO,
Emerald Technology Group Inc. (GoEmerald)
Purpose:
The purpose of this open letter is to highlight systemic barriers affecting Canadian micro and small businesses, when approaching public sector procurement opportunities.
As Canada makes strides and investment in innovation, my request is for you to also create an inclusive procurement model that widely opens competitions for the strategic opportunities, currently limited to the larger firms.
Honourable Canadian Ministers and Parliamentary Secretaries,
Thank you for the immense amount of work your respective teams have championed to develop Canada’s post-pandemic innovation strategy. In reviewing the mandate letters for each of your areas, the amount of ecosystem level innovation aimed at increasing diversity is unprecedented. However, one key area has limited representation, which is a roadblock to your efforts. Please allow me the opportunity to highlight it for your consideration through this open letter.
Currently, there is no productive way for Canadian micro and small businesses to directly participate in the strategic/ department level competitions. Consolidation of opportunities on the CanadaBuys website has made the opportunities centrally visible. For a micro-entity owner such as myself, it has also highlighted the fact that many of the 5342 tender notices listed as of today are out of my business’ reach, even though my firm has the skills to deliver value through these tenders.
This is due to many strategic and department-wide opportunities:
labelled as invite-only and open to a few select multi-national firms (the criterion for joining this list is not always openly available),
requirements for high prior year revenue (a challenge for many small businesses during the pandemic), and
long lead times to qualify for these opportunities (average 6-12+ months – many businesses will cease to exist with these durations, given the current landscape).
Historically, Canadian procurement processes have favoured larger organizations and small businesses are routed to work through one of the larger RFP winners. It is great to partner with large firms and institutions that are long standing pillars of our industries. These provided our government the economies of scale pre-pandemic on many initiatives where taxpayer dollars were the focus.
As reflected in your mandate letters, the post-pandemic world demands a new type of innovation. The businesses and governments across the globe now know that one-size solutions do not fit all. New ways of thinking and responsible innovation strategies are required for growth in every industry. Creating change and innovation in any industry requires a more inclusive and dynamic ecosystem, with micro/ small businesses/ start-ups adding value towards department-wide and strategic competitions.
As a real-life case study, please allow me to share my experience as a micro-entity:
My entire 16+ years of career has been spent in the Canadian/ North American consulting ecosystem. The first half of my career in full time roles at multinational consulting firms and the last 6+ years as the founder of a micro-entity named GoEmerald. I also had the opportunity to engage with the Canadian small business and start-up ecosystem more closely during the pandemic. Since 2020, I have focused on building a consulting and technology solutions business to enable post-pandemic innovation for the public sector.
I have been repeatedly pushed towards larger consulting companies, when I explored ways to directly conduct business with the Canadian government entities. This would keep me and my business at an arm's length. Many people cited barriers within the public sector procurement processes. I was also told by many stakeholders, including many government employees, that given my desire to drive innovation in public sector perhaps I could take a full-time job with <<insert Big 4 firm/ Big tech firm name>>, or become a contractor for <<a Big 4/ big tech firm that is applying for the RFP>>.
Again, there can be value in engaging with large firms. However, in my experience, when micro-entities and small businesses with strategic focus engage through contract-holding third parties, it slows down novel innovation we can bring your teams and our long-term revenue potential in the public sector. It creates a cycle of a forever arm’s length relationship with the public sector due to:
context behind new strategic opportunities not directly visible to micro-entities since we are not the strategic point of contact with the government leaders on existing contracts,
we work within the confines of the contracts defined by other entities and sometimes these are not visible to us,
we are limited to professional services, implementation or staff augmentation roles, and
an important factor is risk to our intellectual property and potential revenue, especially in the early stages of development. You do not hear our strategic thought leadership directly from us. This fails to acknowledge and reward original authors of the work, erodes our firms’ future potential and reduces the chances to accelerate our work’s impact for your teams since the author is not at the table.
There are opportunities for micro-entities and small businesses to engage with the public sector through professional services roles (program manager, developer, analyst, architect and others). These engagements are also focused on implementation and do not provide micro-entities the opportunity to bring you strategic thought leadership. These roles emerge after the key strategic frameworks, roadmaps and direction have already been chosen through RFPs/ competitions out of reach for micro-entities like my own. This creates a steep engagement model for micro and small businesses. By the time professional services roles give us enough revenue to be eligible for the strategic opportunities through other procurement SAs, we are locked in a professional services business model and your teams also view us with this focus long term. This vicious cycle and perception are difficult to break. For strategic/ department level opportunities, we cannot approach the opportunity because we do not have enough revenue, and we do not have enough revenue because we cannot approach the opportunities.
I am thankful for the ScaleUp opportunities in the recent months. Comparatively, these are miniscule in comparison to the real strategic opportunities presented through TBIP and other SA methods. According to CBC News, 4000+ new businesses were started in Edmonton alone as of Jan 2 2021. These Canadians became micro and small business owners during the pandemic. Many of us have no desire to return to a full-time employee role and wish to create larger value for Canadians by working with your teams. Many of us have also struggled throughout the pandemic. I find it disheartening to review the wealth of opportunities on CanadaBuys, only to realize that many of these are out of reach for the micro and small businesses.
Micro and small businesses are more than professional services labels in which we are locked: “program managers”, “business analysts”, “engineers”, “developers”, “architects” and others.
2023 has just begun and the North American marketplace has already seen 38,815 layoffs this year. I consider these 38,815 future micro businesses and start-ups that can add value to the Canadian/ North American public sector, provided there is a ramp in place for them within the public sector procurement process.
Based on your mandate letters, I am confident that Canada has the potential to be the North American leader in renewable energy, agriculture, space economy, and more. As a part of these efforts,
it is time we changed the perspective that micro and small businesses cannot or do not perform strategic work to set the direction of our economy.
Given that innovation in these areas requires radical shift in problem-solution framing, the value for tax-payer money and higher GDP for Canada will surely arrive from direct engagement with small businesses; in partnership with the larger players who continue to bring public sector teams operational excellence and economies of scale.
This will create a cycle of holistic re-investment in Canadian ecosystem which will accelerate the investment coast-to-coast. All this starts with your leadership and a re-design of the Canadian public sector procurement model to create a fair competition for RFPs and tenders. In the Appendix-A below, I am including excerpts from each of your mandate letters with ties to small business success.
Having no other direct way to bring this to your attention, I decided to write this candid open letter. GoEmerald and I want to work with you, the Canadian and North American public sector leaders, to create an innovative ecosystem that enables these items in your mandate letters. This starts with an open procurement model that embrace micro/ small businesses.
I want to work with your departments to create this inclusive procurement model for the Canadian public sector ecosystem. Would this be of interest to you?
Thank you for everything your teams do to support Canadian innovation. I look forward to your response.
Regards,
Gunjan from GoEmerald
Appendix A – Excerpts from mandate letters
The Honourable Helena Jaczek, MP
" While finishing the fight against the pandemic must remain our central focus, we must continue building a strong middle class and work toward a better future where everyone has a real and fair chance at success and no one is left behind."
"Continue the modernization of procurement practices so they support Canada’s economic policy goals, including balanced procurement opportunities with Canada’s trading partners, provide value for money, are open and transparent and require suppliers of goods and services to apply the highest ethical and sustainability standards across their supply chains."
The Honourable Marci Ien, MP
"Continue to support ministers working to advance gender equality, notably as it relates to economic participation and prosperity, including economic recovery, leadership and democratic participation, and poverty reduction, health and well-being.”
“Continue to collaborate with women’s movements, organizations, experts and advocates on matters of public policy relating to women and gender equality.”
The Honourable Chrystia Freeland, MP
“I also expect you to bolster inclusive economic recovery and growth that supports our efforts to achieve our 2030 climate goals and accelerates the transition to a net-zero economy no later than 2050. Furthermore, you will work to make life more affordable for middle class Canadians and their families, including building off our sustained investment in early learning and child care and taking significant action on housing affordability, while maintaining our sound fiscal trajectory.”
The Honourable François-Philippe Champagne, MP
"Establish a digital policy task force to integrate efforts across government and position Canada as a leader in the digital economy and in shaping global governance of emerging technologies."
The Honourable Omar Alghabra, MP
“Continue to advance the restart of a competitive and viable air sector, strengthen air passenger rights and take steps to accelerate the adoption of advanced technologies, including right touch travel, in order to rebuild public confidence and future prospects of the air sector, including efficient and affordable travel options that connect regions and communities to each other and international markets.”
“Continue to support Canada’s transition to net zero…”
The Honourable Patty Hajdu, MP
“As the Minister responsible for the Federal Economic Development Agency for Northern Ontario, you will ensure the continued strength of the Agency and continue to prioritize the delivery of support to small and medium-sized businesses and support job creation in communities recovering from the COVID-19 pandemic.”
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