The government is using a massive $10.9 billion infusion of federal money to buy thousands of office supply stores, but the move has generated an outcry from business owners.
The department says it has to ensure that it’s spending the money wisely.
“The vast majority of this purchase has been done to address the supply-demand imbalance,” said deputy minister Catherine Friesen.
“There has been no real plan for what this will do to the economy.”
But many office supply businesses say the federal government is not doing enough.
“We’ve got a huge amount of money and it’s being used in the wrong way,” said Mark Wierzbicki, president of the Vancouver office supply store store industry.
“They’re spending $1 billion to buy 1,000 stores, they’re spending more than $10 billion and it seems like it’s just going to get worse.”
In a news release last week, the federal department said it was looking to “reinvest” $20 billion of the $27 billion it has set aside for buying office supplies in the first quarter of 2019.
The move was initially supposed to help spur demand in a number of industries.
But businesses have complained the cash is being spent on more items, not on more goods, which are needed to fill the supply gap.
“I think the most important thing we can do is to buy as many office supplies as possible and keep the prices low,” said Wierzbicki.
“But we have to keep the price of office supplies down, too.”
The department said that the bulk of the purchases were made to support the government’s transition from the current oil price environment to a low-carbon economy, and said the department has already invested over $8 billion to support Canadian businesses.
The buy-back program will also allow the department to increase spending on “other support and infrastructure items” to help meet the governments 2030 climate change commitment.
Wierzcicki says that while he believes the purchase program is necessary, he thinks it should have been done sooner.
“We’re a small company, we’ve got to keep up with the demand and the cost of doing business,” he said.
“When you buy a store, you’re buying an asset.
It’s not buying a piece of equipment or a new computer.
We’re buying a small store.”
Despite the $10-billion buy-backs, the number of office supplier jobs has been steadily declining.
The Canadian Centre for Policy Alternatives says that between February and April of this year, there were 7,542 fewer full-time office supply jobs than in March of this years year.
That’s an 8.6 per cent decline, according to a CBC News analysis of Statistics Canada data.
The Canadian Federation of Independent Business says the numbers suggest that the number is trending downward.
David MacNaughton, executive director of the CSEB, said he is concerned the buy-up is being done in the face of a “disaster” of record-low oil prices.
“It’s very clear that the oil price collapse has put pressure on our businesses,” he told The Globe and Mail.
“That’s why we’ve seen a significant increase in the number [of layoffs] in the last few weeks.
We’ve also seen a decrease in our full-year job figures.”
MacNaughson says that, even as oil prices have plummeted, the price at which Canadian companies can sell goods and services remains very high.
“If you’re a manufacturer or a retailer and you’re able to sell to the highest bidder, you can be profitable and you’ll be able to keep your workers, your prices are going to go up,” he says.
In recent years, MacNahans concerns have also been echoed by other business groups, including the British Columbia Chamber of Commerce.
The chamber is calling on the federal and provincial governments to spend more money on infrastructure projects and other forms of stimulus, including roads, bridges, airports and other infrastructure.
And the Canadian Retailers Association says it’s concerned the department is making the purchase of office products a priority while the government is struggling to find ways to create jobs.
“It seems to be a very targeted approach, it’s a very short-term one, and it may not lead to jobs in the long run,” said Brian LeBlanc, president and CEO of the Canadian Association of Independent Retailers.
“This is a short-sighted and potentially destructive strategy.”
LeBlanc says that as companies begin to see the positive impact the purchase is having, it will have an even greater impact.
“For the first time in a long time, the Canadian economy is not relying on the oil shock, and this will allow businesses to see their businesses grow,” he added.
As of Friday, about 4,300 companies are selling more than 1,200 products to government agencies, businesses and institutions, according, to a list provided by the department. The