Social Procurement Program Overview

The City of Toronto's Social Procurement Program is an initiative aimed at creating jobs and driving economic growth that will benefit businesses, communities and residents across the City.

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 Social Procurement Program has two components: Supply Chain Diversity and Workforce Development.

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.

This program does not provide preferential treatment to diverse suppliers. Diverse suppliers must meet the specifications of a quotation request and provide competitive pricing in order to win the business, as with all other vendors that do business with the City. The goal of the program is to provide equal opportunity for all vendors to do business with the City of Toronto.

ExpandComponent: 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 as part of the three-quote process.

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.

ExpandComponent: 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.

ExpandSocial Procurement Program Targets

In May 2016, City Council adopted the City of Toronto Social Procurement Program. The Social Procurement Program was designed to address recommendations made in the Toronto Poverty Reduction Strategy, adopted unanimously by Council in 2015.  
See the report.

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

ExpandSocial Procurement Program Implementation

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.

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.

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.

The City will require certification of diverse suppliers through established non-profit supplier certification organizations such as:

ExpandThe Social Procurement Approach

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

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% 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.

The Social Procurement Strategy also aims to increase supplier diversity among vendors bidding for City of Toronto contracts.

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 increases competition and drives innovation by including new capable suppliers in the supply chain. As well, supplier diversity encourages entrepreneurship and business involvement, which can lead to new job creation for Toronto residents.

ExpandExamples of Successful Social Procurement Projects in Toronto

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