Staff are recommending Halifax regional council adopt a code of conduct for its suppliers, including a living wage requirement for most kinds of contracted work at an estimated cost of $8 million annually.
It’s a response to council’s lukewarm reception of the social procurement policy passed in July — an optional policy, where departments “shall consider” including criteria like supplier diversity or a living wage when contracting out services.
In a recommendation report coming to council on Tuesday, senior procurement consultants Stephen Terry and Erin MacDonald recommend adding “a more robust Living Wage requirement” to the social procurement policy as part of a “Supplier Code of Conduct.”
“In addition to ethical, environmental, employment standards and workplace health and safety requirements that would apply to all contracts, staff recommend inclusion of a Living Wage requirement in the Supplier Code of Conduct for certain HRM contracts, including Solid Waste Services, Custodial and Janitorial Services, Snow and Ice Management, and Security Services as described further in this report,” Terry and MacDonald wrote in the report.
The Canadian Centre for Policy Alternatives updated the living wage for Halifax in a report earlier this month to $21.80 per hour. The new policy would come into effect April 1, 2021 and use that number until it’s updated again by CCPA and Living Wage Canada.
The report goes through staff’s consideration of a typically industry-specific “fair wage” versus a living wage, which Terry and MacDonald conclude is more easily applied across different industries.
Using numbers from indeed.com, Terry and MacDonald forecasted the budget impact of a living wage. For the $48 million worth of affected contracts, the increase is forecasted to be about $8 million.
“The estimated potential impact of imposing a Living Wage requirement on all the operational contracts listed above would be an increase of $8.1M or 16.8% of the value of those contracts,” Terry and MacDonald wrote.
“The increase in costs will occur over time as the living wage is imposed to new and retendered contracts.”
There are exceptions to the proposed rules. They would not apply retroactively, only to new contracts, and the construction industry would be exempt from the living wage requirement.
“This approach would exclude construction services which are generally constrained by collective agreements with the thirteen (13) building trades unions affiliated with the Mainland Nova Scotia Building Trades Council and instead focus on contracted services,” Terry and MacDonald wrote.
Also exempt from the living wage requirement: “students, interns and practicum placements for summer projects;” “contracts requiring fewer than 120 total person-hours of service per year;” “ad hoc contract work (for example emergency or non-recurring repairs or maintenance where no standing contracts are in place);” “volunteers;” “employees of organizations (for profit or not-for-profit) that lease property from the City;” and “social enterprise.”
The supplier code of conduct also includes rules around discrimination, forced and child labour, ethical standards, and a section on “Environmental Stewardship.”
That section reads in part:
Suppliers and their subcontractors must seek to conduct their businesses in an environmentally responsible way, offering or using environmentally responsible products and services to the extent available, all with the goal of assisting in the reduction of any negative impact on the environment.
Under a section titled “Implementation and Compliance,” the code says the municipality reserves the right to ask for proof of compliance, and “On-going or unresolved non-compliance with the Supplier Code of Conduct may be considered as grounds for termination of contract and/or disqualification from future procurement opportunities.”
Terry and MacDonald are also recommending council add a “Social Value Framework” to the social procurement policy, aimed largely at promoting workplace diversity among contractors.
“In a Halifax context, diversity targets specifically include providing opportunities for African Nova Scotian, Mi’kmaq and Acadian suppliers, workers and trainees to benefit from inclusion in the Municipality’s Supply Chain,” the report said.
Like the code of conduct, the social value framework would come into effect April 1, 2021.
It would require procurement staff to “develop and maintain a list of diverse supplier certification organizations which may be accessed by staff to identify certified diverse suppliers.”
Every department making a low value purchase (under $10,000) would have to seek at least one quote from a diverse supplier, and procurement staff will have to seek at least one quote from a diverse supplier when inviting bids for a purchase.
“All publicly advertised Requests for Quotations and Tenders will include language to encourage bidders to develop or adopt a supplier diversity policy that aims to include diverse suppliers in their supply chain,” the framework says.
The motion coming to council on Tuesday would also direct chief administrative officer Jacques Dubé to “investigate possibilities for the adoption of a Green Market incubation program similar to the City of Toronto’s Green Market Accelerator program as a part of HalifAct 2050.”
That program “provides local firms and foreign investors with an opportunity to collaborate with the City of Toronto in order to accelerate the development and commercialization of made-in-Toronto green technologies.”
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