Across Canada, purchasers in both the public and private sectors are rethinking how to get the best value from every dollar spent. Beyond price and efficiency, organizations are asking: How can our purchasing also help achieve our strategic goals and strengthen our communities?
One powerful answer lies in partnering with social enterprises: businesses that deliver the goods and services you need while creating measurable social value.
Our communities face complex and compounding challenges: inflation and unaffordability, the climate crisis, and unstable global supply chains. Addressing these challenges requires new thinking and new partners. Social enterprises are uniquely positioned to help, offering practical solutions that align procurement with community well-being and resilience.
Buy Social Canada certifies social enterprises across the country using this definition: Social enterprises are businesses with a central social, cultural, or environmental purpose that reinvest the majority of profits or surplus back into that purpose.
When you purchase from a social enterprise, your organization doesn’t just meet its operational needs, you advance outcomes like inclusive employment, skills development, poverty reduction, and social equity.
Rethink risk, reframe value
Traditional procurement practices often prioritize minimizing risk above all else. Over time, this focus has created rigid systems that make it harder to buy from non-traditional suppliers, including social enterprises. But doing things the way they’ve always been done carries its own risk: missed opportunities to deliver on organizational strategies, ESG commitments, and community impact goals.
By rethinking what best value for money truly means, purchasers can move beyond transactional buying toward transformational partnerships that deliver lasting results for both the organization and the community.
Build partnerships for mutual benefit
Successful social procurement is rooted in collaboration. When purchasers and social enterprises work together, they build trust and capacity for both purchaser and supplier and support social enterprises to grow the skills and experience to successfully respond opportunities.
Because most social enterprises are small businesses, and more than 85% of Certified Social Enterprises in Canada are incorporated as non-profits, they often face challenges meeting formal procurement requirements such as bid bonds or complex bid processes. Partnerships can help overcome these barriers and create long-term mutual benefit.
In one case, a social enterprise has leveraged their ongoing partnership with a public sector buyer to identify and flag to the purchaser several contracts they’ve lost out on due to bid bond requirements being applied as a blanket on all procurements, regardless of the contract’s size, difficulty, or potential for social value outcomes.
Use direct awards to enable social value
Direct awards are an effective tool to purchase from and develop partnerships with social enterprises.
Direct awards are a type of non-competitive procurement that allows a purchaser to award a contract to a specific supplier without going through the bid process. Purchasers often choose to pre-qualify suppliers before they consider a direct award.
In the private sector, where trade agreements do not apply, every organization has the opportunity to find a social enterprise contractor who can deliver what you need and build a relationship with continued business over time.
For private sector businesses, building these relationships and purchasing from social enterprises is an opportunity to demonstrate leadership in ESG and showcase impact through storytelling and public reporting.
In the public sector, trade agreements such as the Canadian Free Trade Agreement (CFTA) and New West Partnership Trade Agreement (NWPTA) include exceptions that allow direct awards to non-profit or philanthropic organizations for above threshold purchases. Find more details in Buy Social Canada’s Trade Agreements Primer. Embedding this option in your procurement policies makes it easier to align purchasing with your community’s strategic goals.
Concerns about non-competitive procurement practices that prioritize social enterprises generally fall into four categories:
- Risk to contract delivery effectiveness
- Risk to organizational reputation or perceptions of favouritism
- Legal risk of contravening trade agreements
- Legal risk of going against internal policy regulations
These concerns can be mitigated by starting with small contracts and scaling up as trust and capacity grow; remaining transparent and measuring and reporting on outcomes like inclusive employment or waste diversion; keeping processes fair and open to trade; and conducting a review and update of internal policy regulations to align with the new tactic and approach.
Direct awards and partnerships in action
City of Ottawa
The City of Ottawa Procurement By-Law Section 22 authorizes non-competitive purchases from social enterprises owned by non-profits or registered charities. Through this policy, the City directly contracted the Ottawa Safety Council (OSC), a non-profit social enterprise, to deliver community outreach and education about road safety and operate the Adult Crossing Guard Program.
This contract has evolved into an ongoing partnership between the two organizations which serves over 288 intersections across the city during morning and afternoon bell times. OSC also has a similar partnership with City of Toronto.
City of Winnipeg
City of Winnipeg has ongoing procurement relationships with several non-profit social enterprises for services including composting, junk removal, and small renovations.
One of these enterprises is Mother Earth Recycling, an Indigenous-owned Certified Social Enterprise. They have a sole source contract with the City to deliver a mattress recycling program. This partnership diverts waste from landfills while creating employment and training opportunities for Indigenous community members.
Toronto Community Housing
Since 2016, Certified Social Enterprise Building Up has partnered with Toronto Community Housing (TCHC) to deliver renovations and retrofits on affordable housing buildings and create employment and training opportunities for TCHC tenants. As of 2023, TCHC reported that over 600 TCHC tenants had been employed and trained by Building Up.
Deliver on strategy, strengthen community
Procurement is more than a process; it’s a strategic lever for shaping vibrant, resilient communities. Continuing with the status quo only reinforces systems that are no longer meeting our needs. By purchasing from social enterprises, building partnerships, and using tools like direct awards, purchasers can turn their organizational goals and ESG commitments into tangible, measurable impact.
The path forward requires courage to challenge convention, creativity to imagine new solutions, and collaboration to put those solutions into practice.
Take Action
For purchasers:
- Develop a process to use direct awards.
- Track and report on spend with social enterprises.
- Find and purchase from suppliers in our Certified Social Enterprise Directory.
- Become an Engage Member, and get access to a database of social enterprise suppliers along with custom support to design and implement social procurement to achieve your strategic goals.
For social enterprise suppliers:
- If you’re a nonprofit, share the direct award opportunity with potential purchasers.
- Become Certified to grow your business and verify your impact.
For everyone:
- Read Marketplace Revolution to learn more about social procurement, social enterprise, and social finance.
- Subscribe to our newsletter to stay up to date on the latest social procurement and social enterprise news.