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Social Procurement vs Social Value Procurement

What’s the difference?

Social procurement is a strategic approach that leverages the purchasing power of governments, organizations, and businesses to generate positive social outcomes alongside economic benefits.  

Recognizing its potential, social procurement is gaining traction across Canada as a powerful tool for fostering inclusive and resilient economic growth. Various provinces and municipalities have started incorporating social procurement policies into their procurement processes, aiming to address social issues and promote community well-being through their purchasing decisions. 

However, Social Value Procurement aims to push the boundaries even further. While traditional social procurement focuses on redirecting investments to organizations that meet specific criteria to support individuals in need, social value procurement emphasizes the importance of valuing the transformative impact of social procurement policies. By prioritizing the evaluation of the societal change brought about by these policies, social value procurement seeks to generate a return on investment that is valuable to us as a society. This approach shifts the focus from a cost-benefit analysis to a value-creation mindset, where acknowledging the value of social change allows us to allocate more resources and make greater investments. 

For example, the Toronto Community Benefits Network (TCBN) signed a Community Benefits Framework with Metrolinx in 2014, ensuring that the construction of the Eglinton Crosstown LRT would generate employment and procure goods and services from local businesses and social enterprises. Rosemarie Powell, Executive Director of TCBN, spoke passionately about the significance of the program, emphasizing at the Canadian Social Value Exchange Series the importance of practicing social procurement in social enterprises that are doing the upfront work such as Building Up. Building Up runs an intensive pre-apprenticeship trades training program for individuals who face barriers to employment. Their experienced tradespeople collaborate with trainees who previously faced employment barriers to provide Toronto with a range of high-quality construction services. 

Although it may require additional investment, practicing social procurement through social enterprises is crucial for preparing and supporting young people who otherwise wouldn’t have considered the construction industry due to financial needs. Throughout the construction in Eglinton, hundreds of disadvantaged people were either trained or employed, while local procurement generated over 8 million dollars to the community, by June 2021.  

At the municipal level, cities like Saint John’s (NB) are integrating social value thinking in their procurement policies.  The city plans to adopt a comprehensive social procurement policy that considers environmental responsibility, fair labor practices, inclusivity, diversity, equity, culture, and living wages when awarding government contracts. By listing committed vendors and implementing a social value calculation during procurement evaluations, tangible progress and procurement opportunities for local SMEs will escalate. The city  anticipates a return on investment that encompasses various positive outcomes, including a decrease in social needs, lower costs for social services and benefits provided to employees, an increase in local economic activity, reduced housing expenses, decreased expenses related to crime, decreased reliance on social subsidies, improved employability, boosted self-esteem, enhanced health, and an overall improvement in the quality of life. 

Around the world, the social value movement advocates that any procurement done with tax dollars should maximize social and environmental impact. It’s time to shift our perspective from cost to value because if we are serious as a society about dismantling barriers for disadvantaged groups, we must invest accordingly. The social value generated by equal economic opportunities and environmental sustainability will produce resilient and self-reliant communities that will cost society less in the long-term.