Social Procurement is coming to Niagara

At a Regional Council meeting in mid-June a report was endorsed that will culminate with the creation of policy to allow the Region’s considerable purchasing powers to not only deliver all the traditional services expected from our tax dollars, but will create economic, social and further non-monetary value by means of a process called “social procurement”. 

On October 30 elected officials in St. Catharines followed with a measured sign of support for social procurement by asking staff to prepare a policy for their consideration. Once created it will be discussed and if supported by council St. Catharines will be the first lower level municipality in Niagara with such a policy. 

Social procurement is the strategy of using the regular procurement of goods and services to support community social policy objectives. Tens of millions of taxpayer dollars are spent annually by municipalities, but in the past little consideration has been given to the maximization of returns from service contracts, how the development of broad human resources across the community is tied to public funding and which equity seeking groups would create broad economic and social benefits when supported through social procurements. 

These types of targeted investments using the public’s money can multiply the return on tax dollars spent far beyond the traditional procurement approach. By thinking outside the box, not just handing contracts to the lowest bidder or the company that checks certain boxes (or often organizations and businesses that have an inside track), strategic social procurement can create significantly more returns for a community. The idea is to reinvest money contributed by residents back to them.

There are numerous ways that social procurement can be adapted from existing municipal practices:

• Unbundling contracts—instead of one request for proposals (RFP) for a large contract, award multiple contracts to different local businesses, to diversify the investment base and create benefits through competition.
• Targeted invitations—identify local businesses that meet social procurement criteria, for example, to support female entrepreneurs who have traditionally lacked network advantages in male-dominated transactions, invite specific companies to bid based on conditions such as the number of local employees, where the business is located and local stakeholder connections that create spillover benefits.
• Employment criteria—direct procurements through RFP conditions that reward businesses and organizations who employ local residents from marginalized communities.
• Sustainability—through procurements reward companies and organizations committed to environmental stewardship in the community and long-term sustainability in the municipality, with established green practices that represent future-forward ways of doing business.   
• Supply Chains—award contracts based on the use of socially responsible local supply chain partners, who use ethical sourcing, diverse labour forces and sustainable business practices.

At the Niagara Region level the Niagara Community Benefits Network (NCBN) has taken a prominent role in supporting and encouraging local governments and businesses to adopt social procurement policies. Led by Martha Tatarnic, lead priest at St George’s Anglican Church, and Renee Delaney, founder of the social enterprise Small Scale Farms, NCBN works in close consultation with Buy Social Canada. The two organizations have been instrumental in introducing social procurement dialogue and principles into the political landscape that only a few years ago were faint and hard to find.  

Buy Social Canada is a national authority on the processes and benefits of Social Procurement and works with corporations, community groups and all levels of governments in Canada. Speaking to The Pointer from Vancouver, Buy Social’s Chief Operating Officer, Tori Williamson, remarked that “Social procurement is growing across Canada. Governments and many other organizations are coming to understand that they can and should leverage their purchasing dollars to bring their buying decisions into alignment with community goals and values. Social procurement gives them the way to achieve that while at the same time not driving up costs.”

The perception of increased costs can be one of the least understood issues and reasons for resistance for those skeptical about social procurement policy. Not surprisingly elected officials are often hesitant to support programs or policies they perceive as adding cost and complexity to the way the business of the people is done. But according to Williamson there is no evidence to suggest social procurement adds any costs. In fact she says, "Just the opposite may be true. When contractors and governments use local social value supply chains instead of bringing in outside resources, cost savings can often be realized. In cases where there may be an additional cost to purchasing from social enterprises, these policies allow for the price difference to be weighed against local economic, environmental and social values and allow the final selection to be based on the overall best value for the community.” 

When you consider the quagmire of public contracts, with massive cost-overruns, delays that can cripple local businesses and unfair bidding processes that often lock local companies out of the public procurement process, new alternatives to dysfunctional systems could protect  taxpayers from high costs and abuse.

“We’ve seen the social return on investment from buying from social enterprises and employing people with barriers as high as $3 to $4,” Williamson said. “That means for every dollar spent to employ people who have been excluded from the traditional labour market there could be three to four times that amount saved from the alternative situation where that person could be struggling with mental or addiction challenges, has increased needs for housing, healthcare and may end up in the judicial system. Meaningful employment provides income but also self-worth and a sense of belonging. Those intangibles are the costs that our current economic system, focused on lowest price, will continue to incur unless we redefine what we value in our purchasing.”  

Renee Delaney calls the evolving dialogue at the regional level inspiring. “They (the Region) have an opportunity to truly lead and literally help create a well connected community. The change has to start somewhere, and personally I think it starts with social procurement.”

In an email to The Pointer, Niagara Region’s Janine Tessmer confirmed the plans are under development and staff anticipate reporting back to Regional Council with an update on a social procurement concept by Q3 of 2024.

Buy Social lists a number of federal, provincial and territorial governments and agencies as well as approximately 30 municipalities including Toronto, Brampton, Mississauga and Peterborough, universities, corporations and crown agencies, who have implemented social procurement policies since 2015. Every policy is unique to the creating institution and is designed to address the social value in their particular context. These goals are diverse, from creating stronger local economies, increasing local training and apprenticeship opportunities, helping move people out of poverty, seeking economic partnership with First Nations, youth employment, investments in businesses that are LGBTQ+ friendly, supports for immigrants and refugees, partnerships with female-led organizations and businesses, the list is exhaustive.

The City of Calgary reports the implementation of their program will contribute to “a more diverse, stronger and resilient small and medium-sized and social enterprises business sector. Increased apprenticeship, work-experience, and entry-level opportunities in the trades…especially for underrepresented community members”.

Tatarnic says that in her role as the lead priest in a major downtown St. Catharines church she sees how “our whole city is strengthened when small, local and diverse businesses are given a fair opportunity to flourish.” She says that “we all pay the cost when our neighbours can’t pay the bills or find employment.” 

“Social procurement can help ensure that good opportunities for our community are good opportunities for everyone.”

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