Do Business with the City

Social Procurement

Social procurement is the achievement of strategic social, economic and workforce development goals using an organization's process of purchasing goods and services.

In May 2016, City Council adopted the City of Toronto Social Procurement Program, an initiative aimed at creating jobs and driving economic growth by:

  • Increasing the diversity of companies the City does business with by providing businesses owned by diverse suppliers and non-profit companies with equal opportunity to compete for City contracts
  • Encouraging companies already doing business with the City to work with diverse suppliers and suppliers who provide community benefits
  • Increasing the number of employment, apprenticeship and training opportunities for those living in poverty, newcomers and youth

See the report

The Social Procurement Program will address recommendations made in the Toronto Poverty Reduction Strategy, adopted unanimously by Council in 2015.

About the Program

The City's Social Procurement Program has two components - Supply Chain Diversity and Workforce Development.

Supply Chain Diversity:

  • City staff who are purchasing goods and services between $3,000 and $100,000 will be required to invite at least one certified diverse supplier to submit quotations.
  • For formal competitive purchases over $100,000, suppliers will be encouraged to develop their own supplier diversity programs, and may be awarded points in the Request for Proposal (RFP) process for achieving this.

Workforce Development:

  • Workforce development requirements will apply to all contracts over $5 million in value.
  • City staff will identify opportunities for workforce development in planned procurements over $5 million.
  • Bidders will be required to provide a commitment to engage in workforce development if their bid is successful. This includes designating a liaison, committing to regular meetings with the City to review workforce development activities, maintaining records to monitor progress, and making public a workforce development plan. Points may be awarded in the RFP process to suppliers who achieve this.

Requests for Proposals will either outline specific social procurement requirements or will ask vendors to propose how they would incorporate social procurement into their work.

The City aims to meet the following targets by 2018:

  • 33% of competitive procurement over $5 million will include workforce development and/or supply chain diversity requirements
  • 25% of direct suppliers with the City will have a supply chain diversity requirement

Frequently Asked Questions

ExpandWhat is social procurement?

Social procurement is the achievement of strategic social, economic and workforce development goals using an organization's process of purchasing goods and services.

Other examples of successful social procurement projects include:

  • Regent Park Revitalization, which employed over 570 local residents
  • Development of 1652 Keele Street Hub where 10 local youth were hired as apprentices to build a youth centre
  • Waterfront Toronto Employment Initiative, which connects residents to employment and training opportunities generated by waterfront revitalization projects

ExpandWhy is the City implementing this program?

Social procurement is a core poverty-reduction policy. The Toronto Poverty Reduction Strategy recommends actions the City can adopt to address the systemic causes of poverty, using existing resources. Adopting social procurement practices is one of these actions.

Every year the City awards an average of $1.8 billion of goods and services, professional services, and construction services. Reports show that if even as little as 2 per cent of the City's procurement leads to benefits for Toronto's economically-disadvantaged residents and communities, this would amount to a $30 million investment in those communities each year. In addition, increasing employment opportunities for disadvantaged groups who may face barriers in accessing the labour market can lead to further economic and social benefits for the city as a whole.

ExpandWhat are the benefits of supplier diversity?

Supplier diversity increases competition and drives innovation by including new capable suppliers in the supply chain. Supplier diversity policies have been adopted by large private-sector employers such as RBC, Telus, and General Motors. According to a recent study by the Canadian Centre for Diversity and Inclusion, benefits resulting from supplier diversity can include:

  • More competition leading to more innovative products and services
  • Increased flexibility and just-in-time delivery from vendors
  • Building the most-qualified supplier pool
  • Building economic capacity and prosperity in the community
  • Improved public image for the organization

Supplier diversity also encourages entrepreneurship and business involvement, which can lead to new job creation for Toronto residents.

ExpandHow will the Social Procurement Program increase the diversity of the City's supply chain?

The goal of supply chain diversity is to provide diverse suppliers with equitable access to competitive City procurement processes.

For purchases under $100,000 in value, City staff will be required to obtain at least one quotation from a diverse supplier as part of the three-quote process.

For contracts over $100,000, suppliers will be encouraged to adopt their own supplier diversity programs and may be awarded points in the RFP/RFQ process for achieving this.

ExpandWhat is a diverse supplier?

A diverse supplier is a business that is at least 51% owned, managed and controlled by an equity-seeking community or social purpose enterprise. These communities include, but are not limited to, women, Aboriginal people, racial minorities, persons with disabilities, newcomers and LGBTQ+ persons.

ExpandWhat is the City doing to assist other small businesses in accessing procurement opportunities?

The Social Procurement Program is just one of the City's business and employment support systems. Other supports include small business development supports through Enterprise Toronto, and Employment & Social Services programs to help residents find employment.

In addition to the Social Procurement Program, the City is also working on the following improvements:

  • Being more proactive with outreach on “How to Do Business with the City” for any interested business or associations.
  • Implementing a new online portal with an improved registration system for vendors to engage with the City.
  • Accepting online submissions to simplify the process of responding to procurement opportunities.
  • Revising call documents so they are simpler and easier to understand.

ExpandHow will the Social Procurement Program increase workforce development opportunities?

City staff will review all of its procurement contracts over $5 million in value to determine which procurement is suitable for workforce development requirements. Businesses who bid or propose plans for City procurement with workforce development requirements must commit to engaging in workforce development. Points may be awarded to suppliers based on the quality of the workforce development plans.

ExpandHow will the City ensure that suppliers complete their workforce development commitments?

City staff will work with the vendor to support the success of their workforce development plan. The City already has extensive experience with the private sector in embedding workforce development initiatives in projects.

All contracts which include workforce development requirements will require the vendor to designate a liaison within their organization who will implement and maintain the workforce development plan. This liaison will meet with City staff to review their workforce development activities.

ExpandWhat happens if a vendor doesn't follow through with their workforce development plan?

If a successful vendor fails to implement their workforce development plan as agreed upon with the City in two separate instances over a period of three years, the Chief Purchasing Official may recommend the vendor be disqualified from conducting business with the City for a period of two years. After the disqualifying period is over, the vendor will be placed on probation for the next year.

If another failure to implement the agreed upon workforce development plan occurs, the Chief Purchasing Official may recommend the vendor be disqualified from conducting business with the City for an indefinite period of time. These procedures are similar to the Fair Wage Policy enforcement procedures.