Equity and inclusiveness in federal procurement: participation and challenges of small and medium enterprises in Canada

Purpose This paper aims to examine equity and inclusiveness in federal procurement opportunities in Canada. It investigates the factors influencing the participation of small and medium enterprises (SMEs) in federal procurement and explores the challenges faced by suppliers, with particular attention to women-owned SMEs. Design/methodology/approach Drawing on logistic regression models estimated using both year-specific cross-sections and pooled data from the 2017 and 2020 cycles of the Survey on Financing and Growth of Small and Medium Enterprises (SFGSME), this study examines how owner and firm characteristics including access to financing, innovation, growth expectations and export activities are associated with participation in federal procurement and perceptions of procurement-related barriers. Findings Women-owned SMEs remain underrepresented in federal procurement, although participation among firms in the wholesale, retail and transportation sector increased by 11 percentage points between 2017 and 2020. Participation is more likely among medium-sized, growth-oriented, innovative firms and particularly those with access to trade credit. Perceived barriers among small, young and women-owned firms, including limited awareness, compliance complexity and capacity constraints, point to the need for targeted support and streamlined access to procurement opportunities. Research limitations/implications The analysis relies on cross-sectional data from two survey cycles (SFGSME 2017 and 2020) and therefore does not capture long-term supplier dynamics, bidding processes or post-award outcomes. Due to data limitations, the analysis of inclusiveness focuses primarily on women-owned SMEs, with only limited consideration of immigrant-owned businesses. Other equity-seeking groups (e.g. visible minorities, Indigenous peoples and persons with disabilities) as well as differences between SMEs and large firms, warrant future research as richer survey or administrative data become available. This study also does not assess the effectiveness of specific government initiatives aimed at increasing the participation of women-owned businesses in federal procurement. Practical implications Findings suggest a potential need for targeted assistance for smaller and women-owned SMEs. Policy actions could include simplifying procurement procedures, improving access to trade financing and expanding outreach and training initiatives to increase awareness of government procurement opportunities. Social implications Inclusive procurement can help reduce participation gaps among SMEs in federal contracting, contributing to broader economic inclusion and a more equitable and resilient economy. Originality/value This study extends prior Canadian research on SME participation in federal procurement by incorporating financing-related factors, introducing an intertemporal perspective based on two nationally representative survey cycles (2017 and 2020) and examining the association between pandemic-related business support and procurement participation. The findings both confirm and refine previous evidence by showing that gender-related differences in procurement participation persist across survey periods and are associated with broader firm-level characteristics and structural constraints rather than procurement-specific factors or sectoral composition alone.