Bureaucracy makes it too difficult for Canadian tech companies to sell to government, a new report from an industry group says — and all that red tape is keeping them from a bigger piece of the billions spent on procurement.
Companies in some cases find it simpler to sell to foreign governments, according to Laurent Carbonneau, director of policy and research at the Council of Canadian Innovators, which represents the Canadian tech sector.
Companies want to sell good products at fair prices to the government, but they find it very hard due to institutional barriers that prevent them, as stated in an interview with Laurent Carbonneau, director of policy and research at the Council of Canadian Innovators.
Carbonneau has spoken to companies in the cybersecurity and health tech sectors that can sell to other countries without much difficulty.
In fact, they enthusiastically sell to other countries and wish they could do the same in Canada, but their own governments make it very hard for them to do so.
The report co-authored by Carbonneau states that Canadian companies in the cybersecurity sector sell three times as much to other countries as they do to Canadian public-sector clients.
Procurement from various levels of government equals nearly 15 percent of Canada’s GDP, the report released Wednesday states.
The federal process has led to scandals such as the Phoenix pay system debacle and is not serving the government’s own purposes, citing a report by the auditor general that said a third of “mission-critical government digital applications” were in poor health.
Companies face barriers such as the government being too specific about what it’s looking for, and a lack of dialogue that means the companies aren’t able to ask questions without risking giving up trade secrets, said Carbonneau.
“When you have a solved problem, it’s very easy to lay out the specifications for what you need and say, OK, now everyone compete on price for this and we need exactly this and no other thing,” he said.
“That’s actually a really, really bad way to buy software and any kind of innovative product where the parameters might shift during development.”
Having a very complicated system means that what ends up mattering is “your ability to navigate the system and not actually what you bring to the table.”
The process is also long and cumbersome, meaning companies can be left waiting for months or years, according to the report.
“Layers of bureaucratic approvals, while individually justifiable, collectively stretch the process beyond timelines that are reasonable for commercial entities,” it reads.
Canada could learn from systems in other countries, such as the United States, the United Kingdom and Finland, the report outlines.
It suggests the federal government could copy Finland by creating an agency or using an existing agency to act as a bridge between government and Canadian companies.
Government should also “consider a blunt instrument in the form of an ambitious procurement target for small- and medium-sized enterprises,” it says.
