Federal data and oversight reports show little progress in opening Ottawa’s contracting system to smaller businesses, despite years of warnings from the procurement ombudsman about practices that favour repeat suppliers.

An analysis by IJF found no change in the number of noncompetitive contracts issued or the number of companies hired since 2022, after the Office of the Procurement Ombud (OPO) released dozens of reports over the past five years describing how federal contracting often limits competition.

“Band-aid solutions are no longer acceptable,” Ombud Alexander Jeglic said in July, noting that the troubled procurement system regularly makes national headlines. The OPO promotes fairness in federal contracting.

Jeglic’s warnings have grown more urgent as Prime Minister Mark Carney pledges to counter U.S. tariffs by directing the government to buy Canadian. He promised in September to set up a Small and Medium Business Procurement Program that will direct specific streams of procurement to such businesses.

Yet OPO reports show that federal procurement issues run deep. Smaller Canadian enterprises, which make up 99.7 per cent of Canadian employers according to a 2023 federal analysis, are often shut out of contracting opportunities.

Among other issues, the OPO says federal workers have no official means to avoid rehiring poor performers, relying instead on informal methods that can restrict competition. Departments also have no system for alerting one another when contractors fail to deliver on their promises.

Federal documents and data reflect this stalemate, the IJF found. Publicly available data indicates that across the government, the same departments have issued roughly the same number of noncompetitive contracts in recent years, many to the same companies.

A trouble spot identified by both the OPO and Auditor General Karen Hogan involves contracting for services under $40,000 and goods under $25,000. These account for most federal contracts and, the OPO says, represent the best chance for small businesses to compete.

Government buyers are generally not required to use competitive processes for such deals under federal policy. And when departments do issue requests for proposals for these and larger purchases, one-third receive only a single bid, which the OPO called a “troubling trend” in May.

“It really is concerning that the federal government has continued to issue so many noncompetitive contracts,” said Michelle Auger, director of trade and marketplace competitiveness for the Canadian Federation of Independent Business.

“It hurts small businesses. It hurts taxpayers. And it continues to dissuade innovation,” she said.

As the federal government’s major projects move forward, she said, smaller, local businesses need to benefit — a goal that could require long-overdue reforms to procurement rules.

More Briefs

StubHub and SeatGeek lobbying after B.C. hints at banning resale price hikes

Do you have $10,000 to spare? A look at Saskatchewan’s top political donors

Almost three-quarters of CANSEC sponsors are lobbyists

Former Newfoundland fisheries minister now lobbying for commercial fishers