How and Why You Should Get Certified as a Minority-Owned Business

Canadian organizations want their staff to reflect the country’s demographics and increasingly, they also want to see diversity in their supply chains. 

Why?

When one in 5 Canadians are “visible minorities, other than Aboriginal peoples” – that’s 7.67 million out of 34.4 million Canadians in 2016 – people want to do business with others they can relate to.

Beyond that, “The Business Case for Supplier Diversity in Canada”  report notes customers will expect an organization’s workforce and practices—such as procurement—to reflect Canada’s diversity.

Here are some stats to illustrate what we mean:

In 2017, 63.5% of SMEs were owned by men and minorities, including women, owned just 29.7% of SMEs:

  • 63.5% – men
  • 20.9% – men and women equally
  • 15.6% – women
  • 12.2% – visible minorities (non-white in race/colour, other than aboriginal)
  • 1.4% – aboriginal
  • 0.5% – person(s) with a disability (a limitation in the kind or amount of activity due to a long-term physical or mental condition or health problem)

So, if your business is at least 51% minority-owned (women, visible minorities, veterans, indigenous, LGBT+ and people with disabilities), this could be a great opportunity to work with a new group of potential customers.

To support the growth of minority-owned businesses, the Supplier Diversity Alliance Canada (SDAC) was founded to help increase supplier diversity in 2016.  

SDAC’s four member organizations include:

Benefits of Minority-Owned Certification

Minority-owned certification is a powerful marketing tool that can help open doors and get buyers’ attention, but you have to be proactive and take the initiative.

You’ll need to connect with the buyers SDCA and its member organizations make available to you. As importantly, your business still needs to be competitive in terms of price, quality, delivery and more.

These are the benefits of SDAC certification:    

  • Inclusion in databases of certified businesses
  • Access to a current list of supplier diversity and procurement executives in Canada and U.S.
  • Eligible to participate in trade shows, conferences, seminars etc (post-Covid)
  • Learning and networking opportunities with procurement, industry and government leaders as well as peers/colleagues

Once you’ve assessed the potential benefits of minority-owned certification to your business, you need to see if your business qualifies.  

Certification Criteria

  • You must be a legally established, for-profit business
  • Headquartered and operating in Canada
  • The minority must own at least 51% of the business
  • The minority must manage and control the business
  • The minority must be Canadian citizens or lawful permanent residents
  • Provide legal documents proving status (e.g. veteran, disability)
  • Provide *documentation (e.g. corporate structure, financial) will be kept confidential
  • Taxes must be paid up

If you meet the criteria and see how minority-owned certification could benefit your business, you need to know there are tangible costs.

your business, you need to know there are tangible costs.

Minority-Owned Certification – Fees

You will likely pay a one-time, non-refundable $100 (plus taxes) administrative fee. The total fee will be $200 if a site visit is required.

An annual $500 fee (plus taxes) maintains the company’s certification as a Certified Supplier.

To stay certified, you need to renew your certification annually on the anniversary of your certification approval.

The certification renewal confirms the minority-owned and operated business still meets the certification criteria.

Next Steps to Minority-Owned Certification

When you’re ready to move forward, you can contact one of SDAC’s four member organizations to review their application processes:

Canadian Aboriginal and Minority Supplier Council

Canadian Gay & Lesbian Chamber of Commerce

Women Business Enterprises Canada Council

Inclusive Workplace Supply Council of Canada

While it’s still early days for supplier diversification in Canada, Canadian companies and governments are paying attention and making a commitment.

According to the Government of Canada, about 97% of Fortune 500 companies have supplier diversity programs!

And a 2016 study by the Canadian Centre for Diversity and Inclusion found that 39% of 242 organisations had supplier diversity initiatives. It also indicated 51% of private firms had supplier diversity policies compared to 21% of public sector organizations. 

Here’s just one public sector example!

The City of Toronto implemented its supplier diversity program in 2016. 

That’s when Toronto Mayor John Tory said, “Toronto is one of the first municipalities in Canada to implement supplier diversity. We are now bringing diversity to our contracting process by understanding and addressing barriers to access for small- and medium-sized enterprises when they compete for contracts with the City of Toronto. I hope that our initiative will encourage other public sector institutions to embed social procurement in their own practices.”

Finally, in 2019 at SDAC’s 5th annual “Connect. Collaborate. Succeed.” supplier diversity networking event, BDC, Kellogg, Telus and other corporations as well as the City of Toronto and Government of Canada were among the participants.

Take a moment to assess the benefits and decide whether diversity certification will give your business a return on your investment.

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