Public procurement is regarded worldwide as an important economic lever for governments. Indeed, although it focuses on obtaining the best value for money, large sums of money are at stake. Spending allocated to public procurement averages 12% of GDP in OECD countries and 13.44% of GDP in Canada.
According to statistics from the Treasury Board Secretariat[1], between 2017 and 2018, contracts over $25,000 awarded by Quebec public bodies would have amounted to nearly 12 billion dollars, or 2.76% of GDP[2]. The majority of these contracts (76%) were awarded following a public tender.
The crisis that hit Quebec and the rest of the world hard in recent months has had unprecedented consequences on economic activity. In this context, reflection on the strategic role of public procurement and public purchasing policies becomes essential, since they can provide cyclical support to the post-crisis economy and make it possible to obtain assets in return.
Supporting SMEs to pursue growth
In an economic fabric composed of 99.7% SMEs[3], public procurement can be an important lever for growth in the recovery. However, in practice, SMEs face significant difficulties and constraints in public procurement, such as contract size, access to relevant information, submission deadlines, timely payments, and the weight of administrative burden[4].
Although some initiatives in Quebec attempt to address these issues, several obstacles to the competitiveness of local businesses persist. This is what the 2019 study conducted by Propulsion Québec and the Montreal Metropolitan Chamber of Commerce, entitled Positioning Quebec and its metropolis as leaders in smart electric transportation. It highlighted the province's strategic assets in the electric and intelligent transportation (TEI) sector, and pointed out the challenges and issues that compromise its deployment, notably in terms of the ambition of public policies, of flexibility and of openness to innovations in the legislative framework.
For a green, resilient and sustainable recovery
One year later, the COVID-19 crisis highlighted for many stakeholders the importance of initiating a recovery that takes into account the requirements of combating climate change, and of supporting innovation in high-potential sectors such as electric and intelligent transportation (TEI).
Reflection on the strategic role of public procurement takes on its full importance in this context, not only to face the challenges—particularly logistical—of the pandemic, but also to demonstrate the critical role of these markets as a driver of Quebec's economic recovery.
The moment is all the more opportune to envision a new Quebec at the forefront of innovation, resilient, sustainable and social. Public procurement could thus be an important tool to fight climate change, notably by favoring solutions that contribute to the reduction of GHG emissions.
The Chamber and Propulsion Québec will unveil, during a virtual event on September 3, a new study on the strategic role of public procurement in economic development and in strengthening innovation in Quebec. The most appropriate solutions for the Quebec context are explored in depth and are the subject of recommendations.
This study is of general scope, with a particular focus on the issues of electric and intelligent transportation. It is also on this sector that our next blog post will focus, which will deal with the importance of the TEI sector in Quebec's economy and the role it will play in the post-COVID-19 recovery.
[1] https://www.tresor.gouv.qc.ca/fileadmin/PDF/faire_affaire_avec_etat/Rapport_statistiques_1718.pdf
[3] https://www.ic.gc.ca/eic/site/061.nsf/fra/h_03090.html#point1-2
[4] https://cirano.qc.ca/files/publications/2009RP-02.pdf , page 81, page 81
