Small and Medium Enterprises (SMEs)

Small and medium-sized enterprises, or SMEs, are businesses that fall below defined thresholds for size. Size is usually measured by number of employees and sometimes by revenue. In Canadian federal contracting, SMEs are treated as a distinct supplier group, and several government programs exist to help them take part in public procurement.

The abbreviation SME is the singular and adjectival form, and SMEs is the plural. Innovation, Science and Economic Development Canada (ISED) writes the term as "small and medium-sized enterprises," while Public Services and Procurement Canada (PSPC) uses "small and medium enterprises" in its procurement material. Both forms describe the same group of businesses.

How ISED defines an SME for federal contracting

ISED's SME profile of federal contractors adopts a definition of businesses with 1 to 499 employees and annual gross revenues of at least $30,000. ISED applies this definition when it reports on the businesses that take part in federal contracting.

The exact threshold depends on the program, report or solicitation in which the term appears. A business should confirm which definition applies before it describes itself as an SME in a bid or an application.

Procurement Assistance Canada, formerly the Office of Small and Medium Enterprises

PSPC states that it uses evidence-based data to develop policies and strategies that reduce the barriers SMEs face when doing business with the federal government. Its page on helping small and medium enterprises in federal procurement sets out this work.

The former Office of Small and Medium Enterprises (OSME) is now Procurement Assistance Canada (PAC). PAC sits within PSPC. It engages smaller businesses, works to understand the barriers that limit their participation and provides assistance on federal procurement. Earlier PSPC briefing material records that OSME provided information, counselling and training to SMEs seeking to do business with the federal government.

The Small Business Procurement Program

The Small Business Procurement Program (SBPP) is intended to increase the participation of Canadian small businesses in federal contracting. It aims to make it easier for them to compete for and win government work. The Government of Canada describes the program on its Buy Canadian page.

PSPC's 2026 announcement of new SBPP measures says the program is meant to help smaller firms compete for and win government work, demonstrate their products at scale and build a track record.

Open tendering and SME access

Canada's trade-policy material states that government procurement procedures should support non-discrimination, transparency and fairness. This includes making tender documentation publicly available and free of charge to help SMEs take part. The Government of Canada's approach to SMEs in trade policy links SME access to federal purchasing with equal access to tender information.

What SME status means for a supplier bidding on Canadian public contracts

Check which SME definition applies to the program or solicitation you are pursuing. The ISED threshold is one definition, and other programs may state their own.

• Participate through the ordinary federal procurement process and meet the requirements of each solicitation. SME status does not by itself exempt a supplier from those requirements.
• Where a procurement or program contains SME-related measures, follow the eligibility, certification or submission requirements stated in that solicitation or program.
• Use PAC's information, engagement and assistance services to understand federal procurement and to address barriers to participation.
• Watch for SBPP measures, which are designed to help smaller firms compete, demonstrate products at scale and build a contracting track record.