Ottawa, ON — 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.”
The Canadian Press obtained the document under the Access to Information Act.
Prime Minister Justin Trudeau tasked the federal public services minister — a role 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 the U.S., 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 new North American Free Trade Agreement.
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. “The program is simply a market access opportunity for both the corporation and the diverse supplier.”
The memo urged 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 Andrea 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.
“It’s one of those tools where we think you can use existing budgets to create a larger impact,” she said.
The report to 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,” said Anderson.