Harnessing Public Procurement for the Green Transition

Canada

Framework, scope, action-plans

In Canada, there is no dedicated policy for GPP defined at the national level and covering provinces and territories, as well as the federal government. Nonetheless, there are different federal government strategies and policies that include GPP, such as the Healthy Economy Healthy Environment Strengthened Climate Plan (2020), the Federal Sustainable Development Strategy (2022-2026), the Policy on Green Procurement, the Policy on the Planning and Management of Investments (amended 2021), the Directive on the Management of Procurement (amended 2022) and the Greening Government Strategy (last revised in February 2024).

Most notably, the Greening Government Strategy establishes a commitment for all federal government departments and agencies to GPP across four major procurement categories (i.e. building materials, electricity, real property, and vehicles for the federal fleet), mainly through policy to promote reduction of GHG emission, the adoption of life-cycle assessment principles and the purchase of clean technologies and green solutions. In particular, the Strategy envisages:

• The use of criteria in public tenders to promote GHG emissions reduction, sustainable plastics, waste reduction, and broader environmental benefits;

• Incentives for major suppliers to adopt a science-based target in line with the Paris Agreement, and to disclose GHG emissions and environmental performance information;

• Actions to limit the unnecessary use of single-use plastics in government operations, events and meetings;

• Supportive tools (e.g., guidance materials and training) for green procurement.

Moreover, the Policy on Green Procurement further requires integrating environmental considerations in the procurement process to promote environmental stewardship. Under the Policy, Deputy Heads are responsible to ensure the integration of environmental stewardship and life-cycle principles in procurement planning and practices, set up management processes and controls to identify environmental risks and mitigation strategies, and promote the purchase of green alternatives where value for money is demonstrated.

The Policy on the Planning and Management of Investments introduces the concept of best value where an investment should achieve the optimal balance of resource expenditure and realisation of outcomes throughout the asset or service life cycle, including socio-economic and environmental returns. The policy acknowledges that lowest price is not always representative of best value.

The Directive on the Management of Procurement was implemented in 2021 to manage procurements in a manner that enables operational outcomes and demonstrates sound stewardship and best value consistent with the Government of Canada’s socio-economic and environmental objectives. The Directive includes requirements for environmental considerations in procurements, consistent with the Policy on Green Procurement. https://www.tpsgc-pwgsc.gc.ca/app-acq/cndt-cndct/cca-ccp-eng.html

The Pan-Canadian Framework on Clean Growth and Climate Change is the only national strategic framework signed by the provinces and territories, and the federal government, that includes commitments on green and clean technology procurement, even if it is not specifically focused on GPP.

Implementation

Under the Policy on Green Procurement, Deputy Heads are required to provide training on GPP (e.g., via the Canada School of Public Service). Moreover, Public Services and Procurement Canada (PSPC) has developed a Supply Manual to clarify GPP requirements for central procurement authorities, but the manual has a non-binding nature.

Notwithstanding the lack of national GPP criteria, the Greening Government Strategy sets out GPP mandatory requirements and targets for federal purchases across four major procurement categories: construction materials, electricity, real property, and federal vehicle fleet. For example, it requires minimising the use of harmful substances in construction and renovation projects, using electricity exclusively from clean energy sources, conducting life-cycle assessments for the construction and retrofit of major buildings, managing property holdings to retain and restore biodiversity, and achieving the objective of 100% of the government’s light-duty fleet being zero-emission vehicles by 2030. Moreover, PSPC’s 2022-23 Departmental Plan sets out the target of having at least 45% of standing offers and supply arrangements include environmental considerations by 31 March 2023.

Measurement and impact

All federal departments subject to the Policy on Green Procurement, the Greening Government Strategy and the Federal Sustainable Development Strategy are required to report on sustainable activities, including GPP and GHG emission savings, to Parliament via annual Departmental Plans and Departmental Results Reports - as part of the Estimates process. In addition, PSPC collects data on the percentage of standing offers and supply arrangements (SOSAs) that include environmental considerations.

Concerning impact measurement - at the federal level, there is no standardised methodology to evaluate the emissions savings achieved across all public tenders. Nevertheless, the Treasury Board of Canada Secretariat (TBS) provides an inventory of the government’s operational GHG emissions. As part of this initiative, it also estimates the embodied carbon emissions associated with overall procurement. Moreover, the Government of Canada is now working on various methodologies to measure embodied carbon in high-impact procurement categories to support targeted mitigation actions.

Recent developments

In fiscal year 2022-23, the Government of Canada announced two new standards under the Policy on Green Procurement in accordance with commitments in the Greening Government Strategy:

• The Standard on Embodied Carbon in Construction - effective since 31 December 2022 - requires the disclosure and reduction in the embodied carbon footprint of structural materials, starting with a 10% reduction for ready-mix concrete used in major government projects. It applies to projects valued at CAN 10 million or more and expected to use more than 100 m³ of concrete.

• The Standard on the Disclosure of Greenhouse Gas Emissions and the Setting of Reduction Targets – effective since 1 April 2023 - requires that procurements over CAD 25 million include an incentive or a requirement for suppliers to disclose their GHG emissions and set reduction targets in accordance with a Canadian or international initiative or standard.

To reduce plastic waste from packaging, PSPC introduced in September 2023 standard language for environmentally preferable packaging in all PSPC-administered goods procurements, as per the commitments in the Greening Government Strategy: A Government of Canada Directive.

The Directive on the Management of Procurement was further updated in 2023 to include requirements on identifying, mitigating, and disclosing occurrences or risk that may have a negative impact on human rights, the environment, social and corporate governance, and supply chain transparency principles. This recent update also incorporated the Code of Conduct for Procurement into all government procurements where vendors and subcontractors are required to aid in advancing the government’s environmental objectives by providing goods and services that have a lesser or reduced impact on the environment.