State of Social Procurement: Canada - Global Alliance for Social Entrepreneurship

Environment & Context

Social procurement has been a priority for the Government of Canada since at least 2016 when it was first mentioned in ministry mandate letters. Following internal and external advocacy, Public Services and Procurement Canada (PSPC) adopted a Policy on Social Procurement in 2022. Now, PSPC seeks to increase supplier diversity in procurement, targeting social enterprises, co-operatives, diverse-owned businesses, and social purpose businesses. The Federal Government has a distinct Procurement Strategy for Indigenous Business and a mandatory 5% Indigenous procurement target.

Beyond the Federal Government, the movement for social procurement has grown over the past decades through concerted advocacy and implementation work led by a range of sector partners including municipalities, anchor institutions, Indigenous organisations, and social enterprise intermediaries.

The regulatory environment in Canada is favourable to public sector implementation of social procurement, with trade agreement exceptions for above threshold purchasing from Indigenous businesses and non-profit organizations (Buy Social Canada research found that approximately 85% of Certified Social Enterprises are incorporated as non-profits).

Variety of terminologies

For this profile, social procurement is defined as the intentional leveraging of procurement spend to create additional social, economic, cultural, and/or environmental impacts and achieve strategic and community goals. Organizations across the country may use different terminology and focus on specific priorities. Some organizations use the term sustainable procurement, which is likely inclusive of environmental priorities and may include social. Supplier diversity is a common approach for organizations experienced with US programs. Indigenous procurement is a growing focus, in line with the Truth and Reconciliation Commission's Call to Action #92, which calls for socio-economic reconciliation. Many Indigenous communities advocate for focused Indigenous procurement policies or programs that reflect each community’s context.

State of Social Procurement Canada

Across Canada, purchasing organizations are embedding social procurement into everyday operations at every level of government and across sectors, including construction, healthcare, and tourism.

Buy Social Canada research indicates that social procurement is maturing from ad hoc purchases to policy-backed action across municipal governments, public sector institutions, and corporations. 89% of organizations surveyed have a social procurement policy in place or in development, and five organizations report a combined $122 million in social procurement spend in 2024.

Photo Credit: Buy Social Canada

The role of public procurement

Federal Budget 2025 reflects a commitment to social enterprise and social procurement. A new Buy Canadian Policy explicitly referenced purchasing from social enterprises, and the Government announced a new $79.9 million Small and Medium Business Procurement Program to support small business inclusion in government procurement. For significant infrastructure investments, the Budget commits to implementing Infrastructure Canada’s Community Employment Benefits Initiative, which requires employment and skills training opportunities on projects across the country.

Innovative contracting

Innovative approaches to contracting with social enterprises and other social value suppliers are gaining traction. They include direct awards or non-standard procurement with non-profit social enterprises, and social value trade shows. Market capacity assessments are a new approach to researching a region’s supplier and purchaser capacity to develop geographically specific opportunities and capacity building. Community benefits in construction continue to grow as the country seeks to address housing affordability and the economic impact of US tariffs through significant investments in housing and infrastructure.

The social enterprise ecosystem

Canada has a large and expanding social enterprise sector that is increasingly relevant for social procurement. Social enterprises operate across the country, combining commercial activity with clear social, cultural, or environmental objectives. While the sector has matured over several decades, its economic contribution and role in inclusive employment remain underrecognized in mainstream procurement and business support systems.

Photo Credit: Social enterprise Your Place

Scale and certification

Buy Social Canada has certified more than 230 social enterprises and estimates that a further 20,000 social enterprises are likely operating nationwide. This estimate is based on Canada Revenue Agency data on non-profit organizations reporting earned revenue. Certification confirms that these enterprises are purpose-driven, generate income through trade, and reinvest the majority of profits into social, cultural, or environmental outcomes.

Economic and social impact

Social enterprises deliver measurable economic value alongside social outcomes. In 2024, a survey of 182 social enterprises showed combined gross revenues of CAD 5.9 billion and wage payments of CAD 185.9 million. These organizations employed more than 12,200 people, with over half facing barriers to traditional employment. Most social enterprises also provide wraparound services such as mental health support and financial coaching, increasing operating costs for enterprises while reducing downstream costs for governments.

Structural constraints and gaps

Despite their contributions, social enterprises face limited access to core business supports. Capacity-building services and growth capital available to conventional small and medium-sized enterprises often exclude social enterprises and non-profits. The sector continues to push for stable, long-term ecosystem funding and access to federally backed small business financing and advisory programs, including those delivered through the Business Development Bank of Canada.

Demand momentum

Social procurement is gaining traction as buyers seek suppliers that deliver measurable social and environmental value alongside quality and price. This demand supports inclusive supply chains, expands access to employment, and channels spending into local economies, generating benefits for communities and purchasers alike.

Supply structure

Social enterprises are well-positioned to meet this demand. They demonstrate that commercial viability and social purpose can coexist by delivering essential goods and services while reinvesting revenues into social, environmental, and community outcomes. Their business models closely align with emerging expectations for social value in procurement.

Building capacity

Despite growing interest in social procurement, social enterprises remain underprioritized in procurement policy and are often misunderstood in Canada. Buy Social Canada is addressing this gap through certification and advocacy, helping purchasers identify credible suppliers and build stronger partnerships. Sustained progress will depend on coordinated investment in social enterprise capacity and the deliberate integration of social value and community benefit objectives into procurement policies and practices.

Country Profile: Canada

$5.9bn

revenues generated through Canadian social enterprises

89%

of organizations have a social procurement policy in place

5%

mandatory public procurement target for indigenous suppliers