Can we increase economic activities and create fair and equitable employment for vulnerable populations? Are we able to create social value and employment opportunities through social procurement? If so, what political, social, and economic considerations are required to implement social procurement? In December 2020, we posed these questions to a panel of experts during a webinar hosted by Choices for Youth and Buy Social Canada, “Social Procurement for Economic Recovery: Policy and Implementation in Newfoundland and Labrador”. From rural Scotland to urban British Columbia, the panelists painted a picture of the ways that social procurement offers the greatest value per dollar for government procurement, unlocking significant social and economic value for local economies.
The Value of Social Procurement
Social procurement can be understood as the use of purchasing power to create social value.
In the case of public sector purchasing, social procurement involves the utilization of procurement strategies to support social policy objectives. In other words, social procurement challenges us to think about our buying power as not only an economic transaction but an opportunity to have social and community impact. As David LePage, Managing Partner with Buy Social Canada puts it, “Every purchase has an impact and has a multiplier effect; it has an economic impact, it has an environmental impact, and it has a social impact. What social procurement tries to do is intentionalize that outcome”. When we make government purchasing an intentional process, the effects are profound. Multiple studies indicate that about 50 cents of every dollar spent at local businesses is invested in the local economy. David LePage says that this is in contrast to purchasing from larger businesses “which lowers that impact to about 15 cents staying in the community”. While economic challenges can mean less government spending, social procurement challenges us to consider the way that we spend and the types of value that we want to create with those funds.
When it comes to social procurement, the more you can scale, the larger the impact.
Co-founded by Kristi Fairhold-Mader and Kristi Rivait, Scale Collaborative operates out of British Columbia, supporting twenty small and mid-sized rural communities in implementing social procurement through the Coastal Communities Social Procurement Initiative. Through shared learning and support, the network uses a collaborative approach when working with communities, businesses, and governments. For communities like the Town of Tofino (population 2000), this meant unbundling a large construction project to build in social procurement by issuing a separate Request for Proposals (RFP) for the landscaping components of a downtown revitalization initiative. While there was concern that there wouldn’t be anyone locally who could fulfill the tender, the town was surprised by the quality of the RFPs that came forward, many of which demonstrated cost savings as a result of not needing to pay staff travel and accommodations or have the equipment transported from outside the community. The project was a success and led to more social procurement initiatives in the community.
Colleen Evans, Campbell River City Councillor had a similar positive experience of running a successful municipal social procurement process. Social procurement policy is now embedded in the Campbell River by-laws, and social procurement is a core component of the municipality’s Request for Proposals (RFPs) process.
Social Procurement in Newfoundland and Labrador Newfoundland and Labrador is experiencing a declining and rapidly aging population. In particular, we are seeing a significant decline in both our rural population and our overall youth population. Despite the decreasing youth population, Choices for Youth has experienced a steady increase in the number of vulnerable young people using it’s services.
As in many other regions, Choices for Youth sees social procurement as a key to unlocking local economic development opportunities and valuable employment and employment training opportunities for young people.
In 2016, Newfoundland and Labrador made changes to the Public Procurement Act with the goal of increasing social, economic, and environmental value over lowest cost in the public tender process. This policy is a step in the right direction, however there are currently no government processes in place to implement this policy, or evaluate social outcomes and community impact in government procurement processes, which places social enterprise at a disadvantage when competing for government procurement contracts.
Choices for Youth currently operates three social enterprises; Neighbourhood thrift store, The Shop (small scale manufacturing), and Impact Construction, which pairs employment training with wrap-around supports for young people; including basic needs support, housing, healthcare and mental health, and family and natural supports.
Choices for Youth has been able to calculate that for every $1.00 invested in social procurement through social enterprise, $2.61 is generated in cost savings back to the government systems.
How we move forward
By empowering enterprising non-profits and supporting social enterprises with government procurement strategies, we can together make massive strides in addressing complex issues such as poverty, labour market participation, and social inclusion.
As our province moves through an extremely difficult economic situation, we see tremendous opportunities to ensure that local economies and vulnerable populations are supported through social procurement. As we navigate the path forward, we are grateful for the expertise and sustained guidance of our international partners.
Celebrating Social Procurement
Impact Construction will be receiving a Social Procurement Champion award from Buy Social Canada on Monday, April 26 at the Buy Social Canada Social Buying Symposium. Find out more about the symposium & register!
The full webinar, “Social Procurement for Economic Recovery in Newfoundland and Labrador” is available to view on Youtube.
To learn more about Choices for Youth’s social enterprises, please visit our website.