Public procurement is seen throughout the world as an important economic lever for governments. Although the objective is to ensure the best possible value for money, huge sums of money are often at stake. Average spending on public procurement is 12% of GDP in OECD countries and 13.44% of GDP in Canada.
The Secrétariat du Conseil du trésor’s[1] statistics reveal that, between 2017 and 2018, contracts over $25,000 awarded by public organizations in Québec accounted for close to $12 billion, or 2.76% of GDP.[2] The majority of these contracts (76%) were entered into following a public tender.
The crisis that has hit Québec and the rest of the world hard in recent months has had an unprecedented impact on economic activity. In this context, it is essential to reflect on the strategic role of public procurement and public procurement policies, as they can provide cyclical support to the post-crisis economy and allow for assets to be obtained in return.
Supporting SMEs to ensure growth
In an economic fabric made up of 99.7% SMEs,[3] public procurement can be a key driver of growth for recovery. But in practice, SMEs face significant challenges and constraints in public procurement, such as the size of contracts, access to relevant information, bidding deadlines, timely payments, as well as the administrative burden.[4]
While some initiatives have been launched in Québec in an effort to resolve these issues, there nevertheless remain a number of obstacles to the competitiveness of local businesses. This was revealed in a 2019 study conducted by Propulsion Québec and the Chamber of Commerce of Metropolitan Montreal entitled Positioning Quebec and Montréal as leaders in electric and smart transportation. The report highlighted the province’s strategic assets in the electric and smart transportation sector, and underscored the challenges and issues that compromise its deployment, particularly in terms of the intention of the public policies, flexibility and the legislative framework’s openness to innovation.
Green, resilient and sustainable recovery
A year later, the COVID-19 crisis has highlighted the importance of kick-starting a recovery that reflects the requirements for combating climate change and supporting innovation in promising sectors such as electric and smart transportation.
It is important to consider the strategic role of public procurement in this context, not only to address the challenges—such as logistics—of the pandemic, but also to showcase the critical role of these markets as a driving force behind Québec’s economic recovery.
This is a good time to outline a new vision for Québec that is at the forefront of innovation, resilient, sustainable and socially oriented. Public procurement could then be an important tool for combatting climate change with a focus on solutions that help reduce GHG emissions.
At a virtual event to be held on September 3, the Chamber and Propulsion Québec will release a new study on the strategic role of public procurement in strengthening Quebec’s innovation and developing its economy. The most appropriate solutions for Québec are being looked at in depth and are the subject of recommendations.
This study is general in scope, with a particular emphasis on the challenges of electric and smart transportation. Our next blog post will focus on this sector and will discuss the importance of the electric and smart transportation sector in Québec’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
[2] https://www.stat.gouv.qc.ca/statistiques/economie/comptes-economiques/comptes-revenus-depenses/comptes-revenus-depenses-2019.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