What the 2017 federal budget means for Ottawa

Government

Easier access to government contracts, energy efficiency retrofits of federal buildings and the prospect of funding for the second stage of Ottawa’s light-rail network were among the highlights of Wednesday’s federal budget for the National Capital Region.

However, the fiscal plan also promises a “comprehensive review” of at least three federal departments, which were not named, with the aim of cutting spending.

Here are some of the budget measures that will affect businesses in the National Capital Region:

Light-rail cash

Ottawa Mayor Jim Watson reportedly said late Wednesday that he’s been assured that federal funding for the $3.6-billion second stage of the city’s light-rail line would be included in the budget.

The documents themselves specifically list the local project – which would extend rail to Moodie Drive in the west, Trim Road in the east as well as Riverside South and the airport to the south – as an example of infrastructure that could tap into the $5 billion that will be spent by the new Canada Infrastructure Bank.

Procurement

Two weeks ago, Judy Foote – Canada’s minister of public services and procurement – told an industry audience that the government needs to make it easier for small businesses to access federal contracts.

On Wednesday, the Liberal government said it would provide up to $50 million for a new procurement program named Innovative Solutions Canada. It will allocate a portion of funding from federal departments and agencies for early stage R&D, late-stage prototypes and “other goods and services from Canadian innovators and entrepreneurs.”

The federal government is the largest buyer of goods and services in Ottawa-Gatineau and spent some $2.89 billion with local firms in 2015-16, according to OBJ’s Book of Lists.

Canada’s federal procurement process has long been criticized for being relatively inaccessible to small firms that lack the resources to complete cumbersome bid documents as well as companies with cutting-edge technologies that are too unique to be covered by the requirements contained in standardized requests for proposals.

Like the Trudeau Liberals, the former Conservative government attempted to give these firms access to government contracts, which can be valuable reference accounts when companies sell abroad, through specialized programs such as the $40-million Canadian Innovation Commercialization Program.

The Trudeau government’s program will have a special focus on encouraging procurement from companies “led by women and other underrepresented groups.”

Separately, the 2017 budget bill will contain legislative amendments to make the procurement and delivery of IT goods and services “more efficient.”

Spending review

The size of the federal government in Ottawa-Gatineau has swelled under the current Liberal government, adding some 23,200 local employees since last July alone.

While the budget doesn’t make any mention of layoffs, there are hints that the government wants to slow the growth in spending.

In a vaguely worded passage, the government says it will put at least three federal departments – the budget doesn’t say which ones – under the microscope “with the aim to eliminate poorly targeted and inefficient programs, wasteful spending, and ineffective and obsolete government initiatives.”

Building upgrades

More work is coming to Ottawa’s engineering and construction sector as the federal government pledges $13.5 million over five years to Natural Resources Canada to help other departments become more energy efficient.

One strategy is to retrofit federal buildings, something that’s already started with the National Revenue Headquarters Building and Data Centre at the Confederation Heights complex on Heron Road.

Tech funding

Hyped as the so-called “innovation budget,” the Liberals’ spending plan includes a pledge to spend $950 million, which includes $800 million announced in last year’s budget, on economic clusters focused on advanced manufacturing, agri-food, clean technology, digital technology, health/bio-sciences and clean resources, as well as infrastructure and transportation.

There’s also a new $1.26-billion, five-year Strategic Innovation Fund that will consolidate existing programs such as the Strategic Aerospace and Defence Initiative as well as programs for the automotive sector.

The Business Development Bank of Canada is also receiving $400 million over three years for a “venture capital catalyst initiative” aimed at making more venture capital available to entrepreneurs.