Coastal Communities Procurement Initiative: Improving the social impact of construction

By Rory Kulmala, VICA CEO

Driving value in today’s busy market has been at the forefront of our national economy for many years. The construction industry contributes approximately seven per cent to our national GDP and almost nine per cent in British Columbia. Each year, governments and public agencies of all types, combined, spend hundreds of billions of dollars on construction. With all this investment in construction, there is a drive to leverage these investments to create social impact within a local economy and community through the existing purchasing channels of construction services. As with many regions, societal issues such as poverty reduction, labour availability, housing and social marginalization are driving public agencies to find more creative and innovative ways to address these needs.

Today’s exceptionally busy construction market is being done so in an era with record-low unemployment and a high level of skilled labour demand. For the most part, anyone who wants to work in the construction industry is or could be. Still, trying to find quality labourers, if any at all, is proving to be a challenge. There is less provincial and national migration of talent and there a fewer new entrants into the trades. This is creating ample drivers to develop initiatives to increase apprenticeship numbers, promote women and Indigenous people in the industry and make construction more accessible to individuals with disabilities.

As for the construction industry, social procurement is being met with reservation and skepticism. It is viewed as yet another layer of complexity — and even added costs — that our sector must contend. After all, we should be focused on building what we are being paid to build. Being expected to also meet a prescribed social agenda should not be layered onto a project.

Over that past few years, the Vancouver Island Construction Association (VICA) has worked with our members and public agencies to discuss and identify issues that would make social procurement not only a challenge but also to identify opportunities to make it a success. In doing so, I believe there is a way to make any social procurement initiative achievable and successful provided it is done and a fair, equitable and scalable manner. Our industry is at somewhat of a crossroad. We need labourers and there is an untapped source of people that we should be motivated to access.

As more public dollars are spent on construction, social procurement initiatives or community benefit agreements (CBAs), as they can also be known, have gained significant traction as a means for governments, crown corporations, public institutions and nonprofits to leverage their existing purchasing power into an added value outcome. They are moving their purchasing from being a simple business transaction of getting the lowest priced option to also using purchasing to achieve a social value. Buy Social Canada has stated it best: “Every purchase has an economic, environmental and social impact, whether intended or not. Social procurement is about capturing those impacts and seeking to make intentional positive contributions to both the local economy and the overall vibrancy of the community. Individual consumers are already considering the impact of their purchases by buying products certified as fair trade, local, organic and/or ethical. By scaling up this growing trend to include government and corporate purchasing, the potential impact could be tremendous.” It is with this in mind that we see initiatives across the government spectrum embracing some sort of strategy around social procurement.

Nationally, Prime Minister Trudeau’s mandate letter to his Minister of Transportation has committed to developing initiatives to increase the diversity of bidders on government contracts, in particular businesses owned or led by Canadians from underrepresented groups, such as women, Indigenous peoples, persons with disabilities and visible minorities, and take measures to increase the accessibility of the procurement system to such groups while working to increase the capacity of these groups to participate in the system. As a result, the federal government introduced a private members Bill C-344 in early 2018 which seeks to amend the Department of Public Works and Government Services Act to provide the Minister with the authority to require an assessment of the benefits that a community derives from a construction, maintenance or repair project. This allows the Federal Minister to encourage local Community Benefit Agreements (CBAs) along with every infrastructure investment. The goal of this Bill is to create employment and apprenticeship opportunities for people who need them most, and to generate business for social enterprises and other small businesses. There have yet to be any national projects under this Bill.

Provincially, the B.C. government introduced a CBA for public construction projects in July of 2018 for two initial projects: the Pattullo Bridge replacement project and the Kamloops-Alberta Highway 1 expansion to four lanes. This CBA would govern the procurement strategy to increase to apprenticeship ratios, and drive employment opportunities for women and Indigenous people. It has, however, become rather contentious. While it does touch on many elements of social procurement, it does so by also adding, or rather mandating, specific labour conditions that are seen by many in the industry as unfair and contravening to the rights of workers.

Regionally, there have been communities across the country that have already delivered projects under a social procurement initiative. Wood Buffalo, Winnipeg, Toronto and closer to home, Vancouver, Cumberland and Qualicum Beach have all done, or are in the process of doing so, projects with a social procurement aspect to them. On Vancouver Island, the Association of Vancouver Island and Coastal Communities (AVICC) embarked on a two-year pilot initiative to incubate a Community Benefit Hub on Vancouver Island. The AVICC is one of five area associations of local governments representing, in one organization, the various municipalities, regional districts and other local governments of Vancouver Island, Sunshine Coast, Powell River, the North Coast and the Central Coast within the province of British Columbia which operates under the umbrella of the Union of BC Municipalities.

As with many other government initiatives, the Hub proposes to address the challenges and opportunities to better leverage tax dollars to achieve positive social outcomes aligned with community values and strategic objectives. The aim is to develop a cohesive approach to strategic procurement across the region while enabling individual communities to create their own strategic focus regarding community benefits. This cohesion is important from the point of view of industry and as such, VICA has partnered with Scale Collaborative, Buy Social Canada and Presentation Plus to provide this Hub to ensure that the industry voice is represented at the table. Social Procurement, done correctly, could provide a win-win and help both our industry companies and our communities. As always, VICA acts in the best interest of its members and welcomes private consultations to discuss advocacy initiatives such as strategic social procurement.

The Coastal Community Social Procurement Initiative officially launched on March 12, 2019. For more information, please visit https://ccspi.ca/.

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