This could be social procurement’s big moment. Does anyone care?

“Social procurement.” Let’s be frank: it does not sound particularly exhilarating. But in the social impact world, it’s been garnering a lot of interest in recent years, and for good reason. 

What it means is the achievement of positive social or environmental impact through an organization’s process of purchasing goods and services. In other words, a government, philanthropic foundation or charity or company alters its supply chain to include businesses that offer an additional social benefit. For example, the practice is most common in construction, where contractors might hire workers through a social enterprise that employs those who’ve struggled to enter the labour market.

In the wake of the COVID-19 crisis, social procurement advocates believe this is their moment. While introducing a recent digital symposium run by Buy Social Canada, a social enterprise championing social procurement, Senator Ratna Omidvar said that two huge opportunities have risen. 

In the wake of the COVID-19 crisis, social procurement advocates believe this is their moment.

Firstly, “supply chains may become more national instead of global,” especially in essential goods and services, said the Senator, who served as Deputy Chair of the Special Senate Committee on the Charitable Sector. Instead of purchasing supplies for the cheapest price internationally, therefore, governments might look to combine their procurement with local economic development goals, such as employing local vulnerable populations like members of First Nations or at-risk youth.

“More and more governments will be looking at made-in-Canada solutions,” Senator Omidvar explained. “Jurisdictions are understanding that they need to be self-sufficient, to a certain extent.” 

Secondly, the Senator pointed out that the government is aiming to spend billions on infrastructure to dig Canada out of the economic crisis. Not only do the various levels of government spend $200 billion on procurement each year, but federal Infrastructure Minister Catherine McKenna has announced that she’s looking for “shovel-ready” projects. Just a small slice of these funds would transform social procurement in Canada. 

What would it take to transform these opportunities into a more mainstream social procurement movement? How can advocates push governments and organizations to change their purchasing practices?

Round the table

Social procurement projects achieve impact in several ways, often aiming to bring capital and job opportunities to low-income areas. This can be done by adding social enterprises to an organization’s supply chain. In Vancouver’s Downtown Eastside, for example, the Potluck Café Society, a social enterprise catering company, has contributed approximately four million dollars to the area through its payroll, thanks to partnerships with local businesses like the software company SAP.

In order to get projects like these off the ground, the resounding message from the Buy Social Canada symposium was that social procurement needs the genuine buy-in of every important stakeholder.

Having both the supply side and local government at the table is “really critical,” said Josie Osborne, the Mayor of the District of Tofino and co-chair of the Coastal Communities Social Procurement Initiative (CCSPI), an effort of 21 local governments across Vancouver Island and the Sunshine Coast. 

“Collective impact can be transformational, and it really only works when you have that whole team of people together,” with effective communication structures, Osborne told the symposium. For small communities like Tofino, which has a population of just 2,000 people, government spending is a high proportion of local spending, so changing procurement can have a particularly large impact.

Working together on social procurement as local governments for four years, CCSPI has been trying to build a “hub of learning and local practice,” Osborne said, and is looking to share lessons with the British Columbia government and beyond. 

Taking this regional approach “provides incredible value as well as great cost savings to those local communities,” said Kristi Fairholm-Mader, co-founder of Scale Collaborative, which has worked on the learning hub initiative along with Buy Social Canada. There is usually a “pause” between design and implementation of social procurement policies, she said, and having other members helps push them towards action. 

Lisa Helps, Mayor of the City of Victoria, has found it particularly pleasing to see the change in the City’s procurement staff. “We see their eyes light up in these various sessions when they realize the work that they’re doing in this local procurement department can actually change lives and build an economy,” she said. “Who would have thought, four years ago, that procurement staff would see themselves as community change agents?”

“Sitting on books”

One of the ways social procurement happens is through explicit agreements in infrastructure projects. Known as Community Benefits Agreements or “CBAs,” these agreements tend to be struck between a coalition of community-based groups, the construction industry and government to identify community benefits – such as employment or skills and training opportunities for underserved populations –  to be achieved through a project. 

Speaking with Future of Good after the symposium, however, Buy Social Canada’s managing partner David LePage said many policies introduced by local governments will not lead to impact unless they’re accompanied by a change in attitudes in both the public and private sector organizations involved.

“You can pass a law,” he said, “but if the culture and the process doesn’t change, all you have is the policy.” In practice, LePage said, several social procurement policies are “sitting on books” across the country, taking a long time to implement or being too weak to have an impact.

The COVID-19 disruption presents a “huge opportunity if we can take advantage of it,” he said, “but if the construction industry says ‘we aren’t going to do this,’ nothing’s going to happen.” Desperate for jobs and economic growth, LePage said, governments are faced with a dilemma and often fail to follow up their policies with strict regulations, because there hasn’t been a deeper culture shift toward the social procurement mindset.

There’s often pushback from construction companies because of the perceived extra hoops they may have to jump through for social procurement. They might be more efficient if they just skipped that piece because it takes a bit more work, said LePage, “but the [social] impact of that spend is so minimized.”

COVID-19 presents a new opportunity to implement and push social procurement into the mainstream, however, said LePage, especially if the federal government takes a lead. Ottawa has been piloting its Community Employment Benefits initiative, which requires applicants for government infrastructure funding to set targets for employing underrepresented groups. Meanwhile, municipalities like the City of Vancouver are setting stricter targets, requiring a commitment to 10 percent social procurement for large-scale developments.

Making the argument 

From a business perspective, one of the best ways to win minds over is to show that it makes sense financially. “It always comes down to: is it going to cost me more?” said Tim Coldwell, President of Chandos Construction, which works with social enterprises.

“Much of the [construction] industry has no concept of what [social procurement] is,” he said, without realizing that community benefit agreements could supply new sources of talent, and social enterprises are on hand to organize it.

In response, Chandos is running a project with Simon Fraser University to try to “demonstrate on a transparent basis that there is no premium capital cost” compared to a company not aiming for social benefit. They have done the analysis themselves and “there is no difference in productivity, so there is no cost difference,” he said. 

Momentum could also come from the general public, too, who are asking more questions about the social and environmental impacts of businesses, said Fairholm-Mader. “Already, consumers have signalled to businesses… that those things matter,” she said, and to “challenge the narratives of lowest price being the king.”

Momentum could also come from the general public, too, who are asking more questions about the social and environmental impacts of businesses 

“This is a fantastic time for social enterprises, for non-profits, for the social service sector to really express to me,” said Osborne, “that there is a better way to do this and they are willing to be a part of that transformation and change.” 

Osborne said the average Tofino resident doesn’t know the term ‘social procurement.’ But “even if they don’t know what the language is,” she pointed out, “they understand the principles right away.”

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