Prime Minister Justin Trudeau, right, walks past Ivanka Trump at the Women and Development event at the G20 summit Saturday, July 8, 2017 in Hamburg, Germany.Ryan Remiorz/The Canadian Press
A cross-border women's business group launched from a meeting last year between Justin Trudeau and Ivanka Trump is urging the Canadian government to create a procurement policy with a target of allocating 5 per cent of federal contracts to small businesses owned by women.
The proposed policy would be similar to an existing U.S. federal procurement program, which requires the U.S. government to award 5 per cent of its contracts to women-owned small businesses in economic sectors where women are underrepresented. The tenders amounted to about $11-billion (U.S.) in 2012, according to a report released Wednesday by the Canada-United States Council for Advancement of Women Entrepreneurs and Business Leaders.
Canada's federal government has no similar target but has been looking at changing its procurement practices to encourage more bidding from companies owned by women and people from minority groups.
The council argues procurement spending can provide a big boost to help small companies grow, and also recommends that more large private-sector companies should have policies requiring procurement from smaller companies owned by women.
The report says major U.S. companies are ahead of Canadian companies in adopting such programs, with 97 per cent of Fortune 500 companies reporting they have a supplier diversity program, compared to fewer than 50 per cent of large companies in Canada.
Annette Verschuren, chief executive officer of energy storage company NRStor Inc. and former president of Home Depot Canada, said women are fairly well represented in the ranks of small-business founders, but lag in their ability to grow them to the next tier. Procurement programs help smaller companies bridge that gap by giving them access to bigger contracts, she said.
"It really creates a market and helps push the advancement and growth of women," she said.
Companies owned by women are less likely to bid on procurement contracts because they are unaware of them or have a harder time managing the costs and administrative burden, the report said. But Ms. Verschuren said procurement policies give women more incentive to bid, and also encourage larger companies to partner with smaller companies run by women to help meet the bidding criteria.
"It would bring a lot more confidence to women in terms of seeing markets that are there for them that they can bid on directly," she said.
"If we can provide a more specific market opportunity, if we can get them contracts, I think that lack of confidence can be overcome… I just think it's an accelerator to close the gap that we have."
The council members are a group of senior female business executives, including TransAlta Corp. CEO Dawn Farrell, General Motors Co. CEO Mary Barra and Linamar Corp. CEO Linda Hasenfratz. The group was formed last February after Mr. Trudeau visited the White House and brought a delegation of prominent Canadian female executives to a roundtable meeting with Ms. Trump, an adviser to her father, U.S. President Donald Trump.
While the Canadian government's efforts to find common ground with the Trump administration have yielded limited success over the past year, the women's business council has proceeded independently of government, working on five pillars key to advancing women.
In addition to its first report on growing women-owned businesses, the council also plans to issue separate reports on increasing women's access to capital, advancing women in leadership roles, increasing the number of women in science and technology occupations, and encouraging more female entrepreneurs.
The first report recommends expanding the existing U.S. federal Women-Owned Small Business (WOSB) procurement program to make it more effective by covering more industry categories, and engaging more actively with women-owned companies to encourage bidding. It proposes a focus on verifying that companies are "substantively managed and controlled" by women, rather than a focus on "strict legal ownership" by women.
Once both governments have women's business procurement programs, the report says Canada and the U.S. should allow bidding for contracts by women-owned businesses from either country to give them access to a larger pool of contracts.
It recommends professional networking groups and business accelerator groups that help young companies grow should make it "a real priority" to develop women-owned companies, starting by reporting more on the results of their programs for women.