There’s no place like home: A look at Ontario government procurement for local firms

By: Skaidra Puodziunas

You probably haven’t spent much time thinking about how to define where a business calls home, but it’s actually more tricky than you might think.

Is it where the company is headquartered, or is it where most of the employees are located? Is it where the R&D and product development happens, or is it where the factories are located? These aren’t purely abstract concerns.

At CCI, all of our members are Canadian companies, because we believe it’s important to champion homegrown Canadian tech companies, who in turn provide the greatest economic benefit for Canada.

It turns out that the Ontario government has been thinking along similar lines recently. The Building Ontario Business Initiative is designed to give preference to Ontario companies in government procurement, for contracts below a certain threshold, while also creating policies that keep the system fair.

And we’re talking about a lot of money here — these changes will amount to around $29 billion annually, according to the government.

This is a step in the right direction! Government procurement is a powerful economic development tool that can propel the growth of local companies, while also providing great services to empower government service delivery.

Recently, the government asked for input on the proposed policies, and we drafted a submission on behalf of our members. You can read our full policy brief here.

We also talk about intellectual property and freedom to operate considerations, but the thing I want to highlight today is challenging the government to take a more nuanced view of what is an Ontario business.

For example, if an Alberta headquartered company has robust plans to invest, hire, and contribute substantially to Ontario’s economy in the near future, we’d like this scenario to be considered. This helps ensure Ontario attracts promising Canadian enterprises and stimulates investment inflow from other provinces.

Importantly, we’re calling on Ontario to prioritize Canadian-controlled and Canadian-headquartered companies, while also taking a more nuanced definition of what it means to be an Ontario business. This approach avoids the deadly pitfalls of foreign direct investment and ensures that government procurement dollars prioritize stimulating the Canadian economy, while also making Ontario a particularly attractive place to invest.

In CCI’s submission, we’re basically calling on government to evaluate a company’s Ontario bona fides based on a framework approach, considering several key criteria:

• Future Growth Plans: Encourage Canadian-controlled and Canadian headquartered companies to present their strategic expansion plans and investment projections for Ontario.
• Job Creation Commitments: Evaluate the commitment of Canadian-controlled and Canadian headquartered companies to generate employment opportunities in Ontario over a defined timeframe.
• Investment & Innovation Spillovers: Consider the projected investments in various sectors and industries within Ontario, demonstrating a company’s dedication to advancing economic growth and contributing to the province’s economic prosperity.
• Collaborative Partnerships: Assess whether the company has established or plans to form collaborative partnerships with local businesses, research institutions, or government bodies.
• Innovation and Sustainability: Account for a company’s innovation initiatives and commitment to sustainable practices, as these factors align with Ontario’s economic and environmental goals.
• Inclusivity and Diversity: Recognize efforts made by companies to promote diversity and inclusion in their workforce and operations, fostering a more vibrant and inclusive economy in the province.

The bottom line is that the Ontario government’s policy proposal is a good idea, but incorporating these elements would be a positive outcome for the Ontario economy and for Canada.

If you’d like to discuss these proposals in more depth, contact Skaidra Puodziunas , CCI’s Ontario Director of Government Affairs, and Abu Kamat , CCI’s Manager of Policy.