Diversity and inclusion in procurement: Standing Committee on Government Operations and Estimates—May 29, 2023
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Increasing Indigenous involvement in procurement
Context
Public Services and Procurement Canada (PSPC) in partnership with Indigenous Services Canada and Treasury Board Secretariat (TBS) are actively working to increase the participation of Indigenous businesses in federal procurement.
Suggested response
- The Government of Canada is committed to economic Reconciliation with Indigenous Peoples. As part of this commitment, we will promote socio-economic outcomes by increasing economic opportunities for First Nations, Inuit and Métis businesses through the federal procurement process while also diversifying federal supply chains
- PSPC is collaboratively working with Indigenous Services Canada and the TBS to implement the government-wide commitment for a minimum target of 5% of the total value of federal contracts awarded to Indigenous businesses by March 31, 2025
- Progress made in fiscal year 2022 to 2023 against the target will be made public in the first comprehensive report, which will be available by spring 2024
If pressed on the 5% commitment:
- Since April 1, 2022, the groundwork has been laid to ensure that governance, guidance and reporting structures are in place to implement the government-wide minimum 5% target
- The Government of Canada has been engaging and consulting Indigenous partners to identify and remove barriers to participation in federal procurement
- Some departments and agencies, such as Shared Services Canada (SSC), are on track and expect to meet the 5% Indigenous procurement target for fiscal year 2022 to 2023
- Preliminary data suggests that PSPC is not on track to meet its 5% target, however efforts are underway to close the implementation gap
- This includes efforts by PSPC to take concrete action and accelerate progress to increase the participation of Indigenous businesses in federal procurement through the following activities:
- Indigenous-by-default approaches
- the use of the Procurement Strategy for Indigenous Business
- limited bidding
- subcontracting opportunities
- Indigenous Participation Plans
- updating methods of supply to include Indigenous businesses
If pressed on improving reporting:
- The first comprehensive performance report will be published next spring, an important milestone in increasing the transparency of Indigenous participation in federal procurement and will provide the basis to consistently monitor and track progress while ensuring accountability
- Federal organizations are being included in the minimum 5% target in three phases, which recognizes that some organizations may require additional time to adjust their procurement approaches to deliver towards the 5% target
- 32 phase I organizations, including PSPC, will report progress against the target in fiscal year 2022 to 2023 with results publicly available by spring 2024
- The 20 phase II organizations' progress in fiscal year 2023 to 2024 will be publicly available by spring 2025, while the remaining 43 phase III organizations’ progress will be available by spring 2026
- We continue to work on improving our data collection and supporting other government departments in making procurement decisions to help achieve the minimum 5% target
The diversity and the inclusion in procurement
Context
PSPC and SSC is delivering on the Government of Canada’s commitment to increase the diversity of bidders on government contracts.
Suggested response
- PSPC and SSC are helping more businesses owned or led by underrepresented groups get involved in federal procurement to build a more inclusive economy
- In January 2022, the department launched the Supplier Diversity Action Plan, which outlines concrete steps to increase the participation of businesses from underrepresented groups in federal procurement
- The plan stems from continued engagement with suppliers from underrepresented groups to better understand their needs and the barriers they face
- It includes enhanced services, delivered through Procurement Assistance Canada, to help underrepresented groups successfully participate in federal procurement
- It also includes a Policy on Social Procurement to create dedicated opportunities to increase supplier diversity in procurement, and bring positive benefits to racialized and underrepresented communities across Canada
- I will soon be releasing a Supplier Diversity Program that will include specific approaches to enhance supplier diversity in PSPC-led procurements
If pressed on the letter from the Supplier Diversity Alliance Canada:
- I have received the correspondence from the alliance. We consulted stakeholders broadly in the development of the program and my officials shared the proposed program with the PSPC Supplier Advisory Committee as part of this ongoing consultation process and based on the terms of reference of that committee
- I welcome feedback from the committee, as well as from the broader stakeholder community
- My officials continue to prepare to launch the program in the near future and we look forward to working with our stakeholders to ensure its success
- We will address the specific elements raised in the letter from the alliance during the program launch and as part of our ongoing stakeholder engagement
If pressed on supporting Black businesses:
- In January 2021, PSPC launched the Black Business Procurement Pilot to open bidding opportunities for small Black-owned or led businesses, which consisted of 12 procurement opportunities across the country, conditionally limited to small Black-owned or led businesses
- Lessons learned from this pilot are being incorporated into the recently developed Supplier Diversity Program and the upcoming Black Entrepreneurship Procurement Program
If pressed about data collection on supplier diversity in procurement:
- In May 2021, PSPC’s Policy on Social Procurement came into effect, enabling the department to collect data on the diversity of its suppliers to support supplier diversity initiatives
- Work is underway to collect data through CanadaBuys to inform decision-making on supplier diversity initiatives and monitor progress over time
If pressed about definition and certification of underrepresented suppliers:
- Definition and certification are important aspects of supplier diversity initiatives. We are continuing to explore certification options through research and consultation with industry and suppliers
- In the spring of 2022, PSPC engaged with stakeholders, most notably from equity-deserving groups, to identify approaches to definition and certification as part of the Supplier Diversity Program and the development of a Black Entrepreneurship Procurement Program
- The Supplier Diversity Program has been developed and PSPC will begin to launch concrete actions for program implementation in the near future
If pressed about small and medium enterprises
- In 2021 to 22, 66% of SSC funded contracts were awarded to small and medium enterprises for a value of $746 million
- In 2021 to 2022, SSC awarded contracts to 323 different small and medium enterprises. Of these small and medium enterprises, 307 were Canadian, representing 95% of all small and medium enterprises that received SSC contracts
- Of the contracts awarded by SSC to small and medium enterprises in 2021 to 2022, 99% of the total volume and 99% of the total value were awarded to Canadian small and medium enterprises
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