Canada must make inclusive and diverse procurement part of its COVID-19 recovery plan

Friendly, diverse, embracing; Canadians are generally proud of the values this country champions, and rightly so.

Pride is important. It’s part of our national ethos, but it should not come at the expense of scrutiny and the realization that, despite all our developments, we have considerable progress to make as a country.

For too long, businesses owned by women and members of minority groups have been subject to systemic disadvantages in Canada, shut out of the competitive supply chain hierarchy where partnerships and growth are secured. Now is the time to establish norms to ensure such companies are included in procurement policies and to provide them with opportunities to thrive in the post-COVID-19 economy.

The pandemic has heightened systemic disadvantage, as BIPOC Canadians in particular suffer disproportionately adverse consequences. In the economic recovery, it is crucial that Canadian businesses and governments create room for small and medium-sized enterprises owned by members of minority groups to flourish.

COVID-19 has also furthered opportunities for big players to consolidate and dominate their industries. If no action is taken to promote and provide incentives for minority suppliers, our recovery may cement the most damaging effects of the pandemic, permanently disadvantaging minority-owned businesses.

In the United States, there is renewed recognition of this danger.

Inclusive procurement has existed as a concept in the U.S. since the civil rights movement first spurred companies to consider their societal impact. But we have increasingly seen both business and government make concerted efforts to enact programs that put it into practice.

Treasury Secretary Janet Yellen has spoken for years about the importance of inclusive procurement policies. In the U.S. recovery plan, Ms. Yellen has reinforced that minority suppliers are uniquely vulnerable, saying “we need to make sure that those most affected aren’t permanently scarred by this crisis.” Major U.S. companies such as Coca-Cola Co., UPS and Staples Inc. have demonstrated commitment with detailed corporate programs focused on inclusive procurement.

So why not in Canada? So often we see ourselves leading our U.S. cousins in the fight for equality and social justice, yet we are demonstrably lagging when it comes to ensuring our supply chains are inclusive and fair.

This trend is certainly migrating north. For example, the Royal Bank of Canada has established a supplier diversity program. It works with organizations such as the National Minority Supplier Development Council to help businesses become certified as minority-owned so they can bid for contracts with the bank through the program.

Nonetheless, it’s not happening enough, and until meaningful incentives for change are introduced, most minority suppliers will remain on the sidelines of our economy.

Many major Canadian companies espouse a sense of purpose and social responsibility. Inclusive procurement provides businesses with an opportunity to make good on these pledges and incorporate into their operations a commitment to cultivating a fairer society.

If the societal benefit or reputational reward aren’t motivation enough, companies should consider the tangible benefits that inclusive procurement programs can have for their business. A study conducted by the Centre for Research in Ethnic Minority Entrepreneurship has shown supplier diversity programs create more robust supply chains, increase customer satisfaction and foster economic development.

Of course, supply chains present highly complex issues for companies, and inclusive procurement adds another dynamic. But at a time when many Canadian companies are re-examining their operations, the opportunity is ripe to include diversity considerations.

What must happen to ensure the rising tide of Canada’s economic recovery does indeed lift all boats?

This is not a call for government to lay down mandates forcing companies to engage. Instead, as part of our economic recovery, legislators should establish consequential incentives – be it tax breaks, credits or other means – that encourage companies to use minority suppliers in their operations. Businesses that do so must establish rigorous oversight measures to ensure their programs are truly inclusive and beneficial, such as board oversight or third-party verification, as RBC has done.

We have a real opportunity in this country to ensure that, rather than being left behind in the pandemic wreckage, minority businesses are at the forefront, driving our economic recovery. Now is the time for inclusive procurement programs to prove Canada’s dedication to establishing a fairer, more equitable economy.