5 federal election impacts on the Canadian public sector procurement process

public sector procurement

By The Procurement School

On September 21, 2021, Justin Trudeau, Canada’s Liberal party leader, was re-elected with a minority Government. As Trudeau will be leading the country for the next 18 months, we thought we would look at what re-election means for public procurement. 

It seems the Liberals are investing heavily into keeping up with the latest procurement trends. They are making the shift to procurement with purpose, leveraging government spending for social and economic value.

The Zero Plastic Waste Plan

Canada continues its war against plastic waste.  Sadly, only 9% of plastic is recycled. The balance, tonnes of plastics worth billions of dollars are discarded into landfills. Creating a circular economy that extends the life cycle of plastics is an economic opportunity and environmental imperative.

From Smart Prosperity Institute’s report, A Vision for a Circular Economy for Plastics in Canada, a plastics circular economy reduces waste and emissions while capturing value. A plastics circular economy is one that minimizes wasteful use of plastics, produces plastics from renewable sources, is powered by renewable energy, reuses and recycles plastics within the economy without leakage to the environment, and, by extension, generates no waste or emissions. 

To that end, in support of their zero plastic waste goal, the federal government looks to strengthen federal procurement practices to prioritize reusable and recyclable products. Although the goal is commendable and necessary, creating a circular economy and increasing the use of recyclable products comes with its set of challenges.

Public procurement leaders will be faced with ensuring consistent quality of product and ensuring continued compliance with regulatory requirements. They may also be tasked with implementing new processes such as reverse logistics programs that ensure any reusable or recyclable material is reclaimed and reverted back into the supply chain and diverted away from landfills.

Modernizing Procurement

In How Public Procurement Training Courses Can Increase Your Earning Potential, we mentioned how procurement must now concern itself with digitization and sustainability, including ethical sourcing and Diversity, Equity, and Inclusion (DEI).

The federal government feels the same, investing $87.4 million over five years and $18.6 million ongoing to create more opportunities for diverse businesses and modernize procurement through digitization, improving data capture, analytics, and reporting.

To limit barriers, the government looks to ensure that all goods and services are accessible by design, incorporating accessibility considerations into federal procurement. For example, collaborating with Public Services, Procurement Canada will develop new tools, guidance, awareness, and training for federal departments.

Leveraging Federal Procurement for Diversity, Equity, and Inclusion

The data shows that businesses owned by racialized Canadians were hardest hit during COVID-19.  Almost one-quarter of businesses that are majority-owned by racialized Canadians reported a decrease in revenue of 40 percent or more, compared to one-fifth of all businesses in Canada.

By diversifying its supplier base, the federal government hopes to create more opportunities for these marginalized communities. Specifically, Public Services and Procurement Canada will implement a program focused on procuring from Black-owned businesses and will continue to work towards its goal of awarding 5 percent of federal contracts to businesses managed and led by Indigenous peoples.

The initiative aims to “increase diversity in procurement, economically empower historically disadvantaged businesses, support small businesses and our supply chains, improve fairness in procurement opportunities for Canadian suppliers, create jobs, and contribute to a more inclusive economy.”

Helping Indigenous Businesses Grow

To assist federal departments and agencies in implementing and governing adherence to the 5% rule,  the Canadian government will be collaborating with Indigenous Services Canada (ISC), Public Services and Procurement Canada (PSPC), and the Treasury Board of Canada Secretariat (TBS).

Starting with several federal departments, implementation will be phased in over the next three years, and figures will be publicly reported. Full implementation is expected to be achieved by 2024.

Over the next five years, the ISC will be investing $35.2m in revising and updating the Procurement Strategy for Aboriginal Business (PSAB). The project will include expanding the geographical areas where federal organizations must first consider procuring with Indigenous businesses.

To increase participation and enable more organizations to meet the eligibility criteria, ISC will also look at broadening the definition of ‘Indigenous business.’ 

“The measures announced today will provide meaningful opportunities for Indigenous businesses to succeed and grow while helping to make federal procurement a real reflection of Canada’s population,” said The Honourable Anita Anand, minister of Public Services and Procurement.

Domestic Sourcing

Being one of Canada’s largest public buyers of goods and services, public procurement holds considerable power in its ability to leverage its spending to achieve social and economic objectives. In addition, purchasing domestically can help strengthen Canadian supply chains and further support diverse businesses. This would help boost Canadian businesses, making them more competitive while fostering a more inclusive economy.

The government points to PPE as an example of a now made-in-Canada supply chain of personal protective equipment spurred by the global pandemic.

In order to safeguard Canada’s supply chains and ensure mutually beneficial trading partnerships and procure from countries that grant Canadian businesses a similar level of market access, the federal government will be pursuing reciprocal procurement policies.

Low-Carbon Fuel Procurement Program

As Canada pushes towards its net-zero emissions by 2050 target, sourcing low-carbon fuels will be necessary. Over eight years, the federal government has allotted $227.9 million towards implementing a Low-Carbon Fuel Procurement Program.

To position themselves for success and encourage market growth and job creation, the Government of Canada is committing to investing in the cleantech economy and buying low-carbon fuels in the federal domestic air and marine fleets. 

Furthermore, to implement a Low-Carbon Fuel Procurement Program within the Greening Government Fund, starting in 2023-24, budget 2021 proposes to provide $227.9 million over eight years. This will help support the long-term development of low-emission marine and aviation fuels.

The federal government also plans to expand and leverage procurement to ensure public dollars prioritize the use of lower-carbon materials, fuels, and processes.
We invite you to a free preview of our Canadian public sector procurement courses: https://theprocurementschool.com/free-previews/

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