Policy on Social Procurement


Public Works and Government Services Canada (PWGSC) remains the legal name of the department and is used in policy instruments except when referring to documents and web pages that use Public Services and Procurement Canada (PSPC) in the title.

1. Effective date

1.1 This PWGSC policy takes effect on May 3, 2021

2. Context

2.1 Procurement is one of the key activities undertaken by governments world-wide to advance their policy objectives and deliver essential services. Public service entities at all levels are re-examining their procurement practices to leverage this tool to achieve greater efficiencies, deliver better outcomes, support operations and use measures in procurements themselves to achieve socio economic objectives

2.2 Social procurement is the practice of leveraging purchasing power to realize socio-economic objectives by including socio-economic measures within procurement processes. These objectives can include enhancing market competition, job creation, and economic and social advantages stemming from purchases from small and medium enterprises, social enterprises or social purpose organizations. They can also include encouraging the conduct of socially responsible business and advancing diversity and inclusion

2.3 The Policy on Social Procurement facilitates and supports the inclusion of socio-economic measures in PWGSC Acquisitions Program (AP) procurements to support the goal of achieving best value for the Crown and, in turn, for Canadians. Best value ensures procurement decisions achieve an optimal balance between resource expenditures and the realization of outcomes, which includes both financial and non-financial considerations. Best value also ensures addressing socio-economic objectives and contributing to the advancement of the Government of Canada’s policy goals

2.4 From 2018 to 2020, PWGSC undertook a 2 year experimentation cycle to test new and innovative approaches to achieving socio-economic outcomes through procurement. The findings of this experiment demonstrated significant opportunities to use social procurement as a means to increase supplier diversity and to increase economic and social opportunities and inclusion for Canadians and their communities. The findings also confirmed that socio-economic measures can be incorporated, through different approaches, into a wide range of procurements of varying values

2.5 This policy is issued in keeping with the minister’s role in establishing internal departmental policy connected to those matters that fall within the minister’s legislated mandate, including procurement pursuant to the Department of Public Works and Government Services Canada Act (DPWGSA) and the Defence Production Act (DPA). This policy is also issued further to the DPWGSA, which requires that PWGSC act as the “common service provider to the Government of Canada to investigate and develop services for increasing the efficiency and economy of the federal administration and for enhancing the integrity and efficiency in the contracting process”

3. Objectives and expected results

3.1 The objectives of this policy are to:

  • 3.1.1 enhance best value in procurement by providing a framework for the inclusion of socio-economic measures and objectives in procurement, thereby advancing the Government of Canada’s socio-economic policy goals
  • 3.1.2 establish the framework for PWGSC social procurement policy instruments, programs and social procurement small business set-aside programs
  • 3.1.3 establish the policy basis for the collection, protection, use, disclosure, retention and disposition of suppliers’ personal information for the purposes of administering the Policy on Social Procurement
  • 3.1.4 advance PWGSC’s commitments to reconciliation with Indigenous peoples and to commitments related to diversity, accessibility, community development, inclusion, gender equality and tackling systemic racism in Canada

3.2 The expected results of this policy are:

  • 3.2.1 management of procurements in a manner that achieves best value for the Crown and is consistent with the Government of Canada’s socio-economic objectives and policy goals
  • 3.2.2 an increased number of PWGSC procurements with socio-economic measures designed to achieve the government’s socio-economic objectives
  • 3.2.3 increased participation of underrepresented suppliers in PWGSC procurements. This includes businesses or social-purpose organizations owned and/or operated by underrepresented groups and targeted initiatives considered by particular communities, industries or commodities
  • 3.2.4 the reduction and prevention of barriers to participation in procurement processes faced by underrepresented groups

4. Application

4.1 This policy and its related instruments and programs applies to support the inclusion of socio-economic measures, where appropriate, in the procurement of goods, services and construction contracts for which PWGSC’s Acquisitions Program is responsible, including those on behalf of client departments

4.2 This policy applies to any procurement, standing offer, supply arrangement, contract or other instrument that is issued by PWGSC’s Acquisitions Program. Regardless of the nature of the social procurement measures being contemplated (i.e., regardless of whether the measures involve Indigenous criteria), this policy does not apply to:

  • 4.2.1 procurements that are subject to obligations under any of the modern treaties (i.e., comprehensive land claims agreements), or
  • 4.2.2 procurements relating to a project in respect of which there was a duty to consult with Indigenous peoples, unless the appropriate local Indigenous representatives have provided their free, prior, and informed consent in writing to the application of the policy

4.3 The application of this policy will not limit, impede, or supersede procurement policies, rules, instruments, or programs related to either Indigenous Peoples, or to any of Canada’s procurement obligations to Indigenous Peoples. The context of Indigenous procurement is markedly distinct from social procurement more generally, due to the unique historical and legal context underlying the relationship between the Crown and Indigenous Peoples. While social procurement can be used in relation to Indigenous suppliers, persons, or communities, it is separate from initiatives specifically related to Indigenous Peoples, which will be carried out separately

4.4 Pursuant to this policy, PWGSC will:

  • 4.4.1 create social procurement programs, policy instruments, guidelines on social procurement, and social procurement small business set-aside programs for underrepresented/disadvantaged groups. These programs refer to measures or policy instruments that describe how to effectively address socio-economic objectives in procurement effectively, and how and when to use social procurement small business set‑asides
  • 4.4.2 collect, use, disclose, retain, dispose, display, and protect personal information on suppliers, in accordance with the Privacy Act, for the purposes of administering the Policy on Social Procurement and its instruments and programs

4.5 This policy does not confer new procurement authorities to PWGSC. Its application will operate within the current policy, regulatory and legal frameworks, and trade agreements

4.6 With respect to other policies, programs, directives, and other existing instruments of the Government of Canada, to the extent that there is an inconsistency with this policy:

  • all policies of Treasury Board take precedence
  • all policies mandated by Cabinet take precedence (for example, the Canadian Content Policy)
  • all instruments put in place to implement a legal obligation take precedence (such as the Inuvialuit Guide and the Directive on Government Contracts, including Real Property Leases, in the Nunavut Settlement Area (the Nunavut Directive)

In all other cases, officers should be complying both with this policy and with any other policy, program, directive or other existing instrument, in parallel with this policy.

4.7 Defence and marine procurement: This policy is complementary to defence and marine procurement policies, rules, instruments, and programs, including, but not limited to the National Shipbuilding Strategy and the Industrial and Technological Benefits Policy. The policy is to be used in conjunction with these to support best value, while pursuing socio-economic outcomes

4.8 Green procurement: The Treasury Board Policy on Green Procurement, issued on April 1, 2006, enables the protection of the environment and supports sustainable development by integrating environmental performance considerations into the procurement decision-making process. The Policy on Social Procurement is to be used in conjunction with the Policy on Green Procurement as both intend to support best value while pursuing socio-economic outcomes

4.9 Accessible procurement: The Treasury Board Directive on the Management of Procurement issued in May 2021, indicates that departments, where appropriate, must include accessibility criteria when specifying requirements for goods, services and construction, and ensure that deliverables incorporate accessibility features. Consistent with trade agreements and comprehensive land claims agreements, if the department determines that it is not appropriate to include accessibility criteria as part of commodity specifications, or if it is unable to obtain compliant goods or services, the client or technical authority must ensure that clear justification is on file. The Policy on Social Procurement is to be used in conjunction with the Treasury Board Directive on the Management of Procurement, as both intend to support best value while pursuing socio-economic outcomes

4.10 Through the development of this policy and its associated programs, it is PWGSC’s intention to create a “program for disadvantaged groups” for the purposes of the legitimate provisions of the Canadian Free Trade Agreement (PDF)

6. Enquiries

6.1 For interpretation of any aspect of this policy, contact:

Executive Director, Strategic Policy Sector
Procurement Branch
L'Esplanade Laurier, East Tower, 8th Floor,
140 O'Connor Street
Ottawa, Ontario
K1A 0R5

Telephone: 819‑639‑7879
Email: tpsgc.papilotesocioeconomique-apsocioeconomicpilot.pwgsc@tpsgc-pwgsc.gc.ca
Website: Advancing socio-economic goals, increasing competition and fostering innovation

Appendix A: Definitions

Barrier (obstacle)
Barrier refers to anything—including anything physical, architectural, technological or attitudinal, anything that is based on information or communications or anything that is the result of a policy or systemic and systematic practices, both written and unwritten—that hinders the full and equal participation of a person in society.
Benefit (avantage)
A measurable improvement that contributes to departmental objectives, including strategic objectives.
Best value (meilleur rapport qualité-prix)
The extent to which an acquisition achieves the optimal balance of resource expenditure and realization of outcomes, including socio-economic and environmental returns, throughout the good or service life cycle. In the context of social procurement, the lowest price is not always representative of best value.
Bidder (soumissionnaire)
A legal entity, person, joint venture or company that has submitted a bid in response to a solicitation.
Competitive contract (contrat concurrentiel)
A contract that is entered into by soliciting more than 1 bid.
Competitive procurement (approvisionnement concurrentiel)
The solicitation of bids from more than 1 supplier.
Complex procurement (approvisionnement complexe)
A procurement that involves some level of complexity, such as:
  • a component of a project
  • a component intended for government-wide or enterprise usage or having horizontal implications
  • components that are public-facing or transformational or that have a high level of uncertainty
Contract (contrat)
A binding agreement entered into by a contracting authority and a contractor to procure a good, service or construction.
Contract value (valeur du contrat)
The total amount in Canadian dollars to be paid under a contract or contractual arrangement, including:
  • the price of the goods, services or construction to be delivered over the term, including all options and amendments
  • all disbursements and other related costs charged by a contractor or entity (including travel, shipping, overhead, profit, administration, tools and materials, fees)
  • all applicable taxes (including any non-recoverable tax paid to a foreign government and any value-added tax paid to a government in Canada)
Contracting authority (autorité contractante)
A person who has delegated contracting authority to enter into a contract or contractual arrangement on behalf of a department or agency.
Contractor (entrepreneur)
A legal entity, person, joint venture or company that has entered into a contract to provide goods, services or construction.
Contractual arrangement (entente contractuelle)
A written arrangement to procure goods, services or construction, for payment or other appropriate consideration, that is subject to Treasury Board contracting limits, and that is signed by a contracting authority and a representative of 1 or more government entities, countries or international organizations, or other public entities.
Corporate social responsibility (responsabilité sociale des entreprises)
The term corporate social responsibility (CSR) is defined by the Government of Canada as the voluntary activities undertaken by a company, over and above legal requirements, to operate in an economically, socially and environmentally sustainable manner.
Disability (handicap)
Disability refers to any impairment, including but not limited to a physical, mental, intellectual, cognitive, learning, communication or sensory impairment—or a functional limitation—whether permanent, temporary or episodic in nature, or evident or not, that, in interaction with a barrier, hinders a person’s full and equal participation in society.
Evaluation criteria (critères d’évaluation)
In the context of procurement, a benchmark, standard or yardstick against which the accomplishment, conformance, performance and suitability of a person, alternative, activity, product or plan is measured to select the best supplier. Criteria may be qualitative or quantitative in nature.
Fair (équitable)
In real or potential transactions, treating all parties without discrimination or favouritism while conforming to established rules.
Goods (biens)
Items delivered or to be delivered under a contract.
Governance (gouvernance)
The way in which departments organize themselves to collaboratively conduct and implement a policy, project, program, framework or horizontal initiative, including the planning, development and implementation of process and control structures for decision making, reporting and evaluation.
Life-cycle cost (coûts associés au cycle de vie)
The total cost of ownership over the life of an investment.
Non-competitive contract (contrat non concurrentiel)
A contract that is entered into without soliciting bids.
Outcomes-based procurement (approvisionnement axé sur les résultats)
A procurement strategy that ties remuneration to a contractor’s ability to meet, or exceed, defined program outcomes in a meaningful and measurable way.
Procurement (approvisionnement)
The process related to obtaining goods, services or construction from the planning to the completion of the procurement life cycle.
Procurement strategy (stratégie d’approvisionnement)
A strategy that defines, in general terms, how a good, service or construction will:
  • be procured to obtain best value
  • include, at the highest level, the determination to proceed competitively or non-competitively
  • include applicable approaches in support of sustainable benefits or other national objectives priorities or programs
Program (programme)
A program is a concrete published plan as opposed to an ad hoc decision related to a single procurement. It is composed of any group of resources and activities, and their related outputs, undertaken pursuant to a given objective or set of related objectives and administered by a department or agency of the government.

In addition, a program is an individual or groups of services, activities or combinations thereof that are managed together within the department and that focus on a specific set of outputs, outcomes or service levels.
Responsible business conduct (conduite responsable des entreprises)
This concept emphasizes the adoption of responsible business conduct practices within internal operations and includes the integration of sustainable development practices, as well as accountability measures to avoid and address negative impacts from business activities. The Organization for Economic Co-operation and Development (OECD) uses the term responsible business conduct, and Canada has adopted this practice in recent years.
Risk (risque)
The uncertainty that can create exposure to undesired future events and outcomes. Risk is the expression of the likelihood and impact of an event that has the potential to affect the achievement of a department’s objectives.
Service (service)
For the purposes of this policy and its associated directives, a service is obtained through formal arrangements such as contracts, memoranda of understanding and letters of agreement to support the realization of specific outcomes.
Social benefit criteria (critères relatifs aux avantages sociaux)
For the purpose of this policy and its associated programs, social benefit criteria refer to measures that can be included in a procurement instrument requiring federal suppliers to provide socio-economic benefits to the Canadian population as a procurement outcome. Examples of social benefit criteria include employment of individuals from underrepresented groups, workforce and skills development, co-op programs, scholarships and research funding.
Social enterprise (entreprise sociale)
A social enterprise is a business model that seeks to achieve social, cultural or environmental objectives through the sale of goods and services. A social enterprise can be for-profit or non-profit as long as the majority of net profits is directed toward the achievement of a social benefit in its community (for example, reducing environmental impacts of its products, creating jobs or providing training opportunities for the unemployed, or providing healthcare) with limited distribution to shareholders and owners.
Socio-economic objectives (objectifs socioéconomiques)
For the purpose of this policy and its associated programs, socio-economic objectives refer to measures that can be included in a procurement instrument requiring a federal supplier to support Canada’s social, economic or environmental goals.
Social-purpose organizations (organismes à vocation sociale)
The entire spectrum of organizations that seek to advance a social, cultural or environmental mission. Social-purpose organizations straddle the not-for-profit sector (such as registered charities, incorporated non-profit organizations and co-operatives), the private sector and hybrid entities such as community contribution companies and community interest corporations.
Social procurement (approvisionnement social)
Social procurement is the practice of leveraging the government’s procurement spending to generate positive secondary societal impacts such as increasing the diversity of government suppliers by purchasing goods and services from underrepresented suppliers and/or social enterprises, or incorporating social benefit criteria in government procurements.
Sound stewardship (intendance judicieuse)
The demonstration of diligence in managing and controlling the administration of public funds to achieve best value through:
  • management processes that are clearly defined, transparent, regularly tested and validated
  • financial and non-financial performance measurement
  • reporting at the transaction and business process levels
Supplier (fournisseur)
A person or legal entity that provides or could provide goods, services or construction.
Underrepresented groups (groupes sous-représentés)
For the purpose of this policy and its associated programs, an underrepresented group refers to segments of Canada’s population that are systemically and statistically underrepresented in the base of PSPC’s suppliers.
Underrepresented supplier (fournisseur sous-représenté)
For the purpose of this policy and its associated programs, an underrepresented supplier refers to a person or legal entity that:
  • provides goods, services or construction to the Government of Canada
  • is majority-owned or operated by members of underrepresented groups. In this context, majority refers to at least 51% of the business owners, shareholders or employees
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