The city of Toronto is forging ahead with a plan to award a quarter of its richest contracts only to companies that can demonstrate a commitment to diversity, either in their own workforces or in the smaller companies they do business with.

By 2018, the city is promising to have hard-and-fast rules in place that will mean companies must be able to prove their workforces or sub-contractors are diverse before they can bid on city projects worth more than $5 million, Mayor John Tory said Wednesday.

'Not about handouts'

"It's not about handouts, it's about partnerships," Tory said. "Partnerships that I think will stand the test of time, because people in these diverse businesses who don't think they have a chance will have a chance to show what they can do, and will do so well that they will be hired again and again and again."

Margaret Eaton, executive director of the Toronto Region Immigrant Employment Council, called the initiative "a terrific boon" in her comments to CBC News.

"There are many newcomer businesspeople who would've felt there was no way in to city hall. It can be a real monolith," she said.

"They've opened the door."

However, she said there could be a steep learning curve at city hall.

Margaret Eaton, the executive director of the Toronto Region Immigrant Employment Council, called the city's plan to award a quarter of its contracts to diverse companies "a terrific first step." (TRIEC)

"Hearts and minds need to be changed at the city among people who are doing the procuring, rather than using your standard list of suppliers" she said.

As an example of how contracts could be awarded in the future, the mayor held his news conference Wednesday at the Aboriginal Printing Corporation, a storefront operation near Union Station.

That company was hired by the much larger engineering firm Black and Veatch earlier this year to do its printing. Because of that arrangement, the city agreed to award Black and Veatch the contract to build a pumping station at Ashbridges Bay.

Diverse companies must be certified

To be considered a diverse employer, a company must be owned by a member of a diverse group, have in place programs to increase employment among diversities, offer internship or apprenticeship programs aimed at diverse youth, or sub-contract to a business that is certified diverse.

The city says that certification can be provided by the Canadian Aboriginal and Minority Supplier Council, Certified Women Business Enterprises, Canadian Gay and Lesbian Chamber of Commerce or the Social Purchasing Project.

The initiative is part of city council's poverty reduction strategy, introduced last year, and Tory said Wednesday "the best poverty reduction strategy that I know is to get people a job, or to make the businesses they start a success."

The city awards contracts worth about $1.8 billion annually, the mayor said.