Full participation 'crucial'
Toronto Star
Sep. 28, 2006. 08:14 AM
NICHOLAS KEUNG
IMMIGRATION/DIVERSITY REPORTER
Ottawa should consider a company's commitment to diversity before awarding a federal contract, argues a new report commissioned by the Canadian Aboriginal and Minority Supplier Council.
Minority-owned businesses often struggle to integrate into the Canadian market. In general, minorities are expected to make up one-quarter of Canada's population by 2017, and the disproportionate unemployment and poverty rates minorities experience will continue to grow without government intervention, says the study, which was released yesterday.
The report points to the model offered by the United States commerce department's Minority Business Development Agency, which reviews how much government contractors are spending on services and products purchased from minority-owned businesses.
According to U.S. government figures, the number of minority businesses grew at an annual rate of 8.5 per cent, while prime and subcontracting procurement with such companies has doubled over the past 20 years, to $105 billion (U.S.) in revenue.
"The full participation of aboriginals and visible minorities in the Canadian economy is crucial for Canada's competitiveness and our place in the global economy," Orrin Benn, president of the Markham-based supplier council, said yesterday at the Aboriginal and Minority Procurement Policy Conference in Ottawa.
"Aboriginals and visible minorities are indispensable to Canada's economic future. Procurement policy is an effective tool to improve their access and integration in the Canadian economy."
In Canada, federal procurement is valued at about $13 billion (Canadian) a year, representing 500,000 deals.
The supplier council, with a membership of 75 aboriginal and minority businesses, as well as 30 Fortune 500 corporations, was launched two years ago to promote business opportunities between small and mid-sized ethnic businesses and their mainstream counterparts.
"Aboriginal and minority (entrepreneurs) are entering the small and mid-sized enterprise marketplace at a rate 1.5 times faster than other entrepreneurs," Benn said. "The problem is they lack the access to the supply chains of the major corporations. It's very difficult for smaller enterprises to get in there."
Businessman Sandeep Lal, whose family moved to Canada from India in 1972, understands first-hand the challenges of building a new enterprise in a new country.
"It's particularly difficult for people who don't have multi-generations in Canada to start a business," noted the president of Scarborough-based Metro Label, which makes labels for wine bottles, pharmaceuticals, cosmetics and other products. The company has five facilities in North America and employs 300 people.
"You don't know how things work. You don't know the rules and regulations. You have no contacts and relationships you would have built growing up here. You go out and meet people who can't say your name or care to know how to say your name," added Lal, whose father founded the company in 1974.
"So much in business is about getting people's trust. If you don't know some of these people since childhood, you don't stand a chance in getting their business."
According to an earlier RBC Financial Group report, The Diversity Advantage: A Case for Canada's 21st Century Economy, total personal income in Canada would be $13 billion higher each year if immigrants were as successful in the workforce as their Canadian-born counterparts.
The 58-page supplier-council study, co-authored by Osgoode Hall Law School international trade professor Charles Gastle and former colleague Zara Merali, also highlights the economic opportunities aboriginal and minority businesses offer:
- Importing outsourced goods and services, previously Canadian-based;
- Exporting intellectual capital, especially to developing countries;
- Exporting goods and services in supply-chain partnership with major Canadian and U.S. multinationals, enhancing knowledge exchange and transfer and enriching global innovation and efficiencies.
The report also recommends creating private-sector procurement partnerships; developing standard evaluation, data and reporting systems to monitor the diversity commitment of corporations; and creating a certification program to accredit aboriginal and minority businesses.
While in favour of calling for new procurement partnerships, Lal said that would come naturally if Canadian employers reflected the country's growing ethnic diversity in workforces.
"As Canada's landscape changes, these people bring to the companies their marketing and people resources, along with the understanding of this new influx of immigrants," he said.