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Ottawa weighs employing ‘social procurement’ plan to support women, minorities

According to a November, 2016, memo prepared for then minister for the status of women, Patty Hajdu, the Liberal government is currently investigating the feasibility of adopting an ‘inclusive federal procurement’ strategy though which the country can better support women- and minority-led business initiatives.

Jeff McIntosh/THE CANADIAN PRESS

The Liberal government is thinking about using its massive purchasing power to support women in business.

"Inclusive federal procurement is a potential avenue through which the Government of Canada can demonstrate leadership and support for women's entrepreneurship," said a November, 2016, memo prepared for Patty Hajdu, who was then minister for the status of women.

"The Treasury Board of Canada is currently looking at opportunities to better link federal procurement practices with the broader socio-economic objectives of the Government," said the memo. "It is recognized that women and other under-represented groups should be considered in a renewed federal approach to procurement."

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The Canadian Press obtained the document under the Access to Information Act.

Prime Minister Justin Trudeau tasked the federal public services minister – a role currently being filled by Natural Resources Minister Jim Carr, while Judy Foote is on a leave of absence – with modernizing procurement practices. That includes "social procurement" where the government uses contracts for goods and services to achieve broader policy goals, such as increasing the diversity of the supply chain.

Last year, Status of Women Canada asked the Conference Board of Canada to make the case for why using more diverse suppliers – defined as businesses that are majority-owned, operated and controlled by women, visible minorities, Indigenous Peoples, members of the LGBTQ community or others facing discrimination – makes good economic sense.

A draft of the report released alongside the memo said benefits can include higher profits, greater employee retention and even access to new markets, including in the United States, which has had supplier diversity policies at the municipal, state and federal level since the 1960s. U.S. Trade Representative Robert Lighthizer included maintaining these programs among his goals for the outcome of continuing North American free-trade agreement negotiations.

The report pointed out that, while many businesses had adopted such policies, public institutions and governments were behind the curve.

The report also looked to pre-empt some likely opposition to the idea by noting supplier diversity is neither a social program nor a guarantee of business.

"Corporations with an effective supplier diversity program do not compromise on the quality or the cost of the services or products they supply, nor do they change the service requirements for all suppliers," said the report.

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The memo urged Ms. Hajdu to use the report to convince her fellow cabinet ministers to enact such a policy for the roughly $15-billion to $20-billion in annual federal procurement spending.

The 2017 federal budget hinted at things to come when it said the Liberal government would "encourage procurement from companies led by women and other underrepresented groups" for its new $50-million program aimed at supporting innovation.

Philippe Charlebois, a spokesman for Status of Women Minister Maryam Monsef, said department officials are examining key issues and potential strategies to "advance the participation of women-owned enterprises in the federal procurement process."

The City of Toronto brought in a social procurement policy last year as part of its poverty-reduction strategy.

There are various criteria depending on the value of the contract, but for competitive bids worth between $3,000 and $100,000, the city has to invite at least one supplier that has been certified as diverse, such as majority-owned, operated and controlled by women, to be one of the three finalists.

Denise Campbell, the director of social-policy analysis and research for the City of Toronto, said she welcomes other levels of government getting on board with the idea.

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"It's one of those tools where we think you can use existing budgets to create a larger impact," she said.

The report to Ms. Hajdu said the Women Business Enterprises Canada Council (WBE Canada) has certified more than 375 women-owned business that employ more than 13,600 people and generate more than $2.8-billion in revenue.

That seems to be only a fraction of the potential, as the report said there are nearly one million Canadian women who own businesses that contribute more than $117-billion to the economy each year.

Mary Anderson, the president of WBE Canada, which has teamed up with two similar organizations to form the Supplier Diversity Alliance Canada, said they have been working closely with Public Services and Procurement Canada on the issue.

"We recognize that any change takes time," Ms. Anderson said.

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