Crackdown Urged on Companies Abusing Indigenous Procurement Program

Indigenous Business Leader Calls for Tougher Penalties on Companies Abusing Federal Procurement Program

Shannin Metatawabin, CEO of the National Aboriginal Corporations Association, is urging the federal government to implement stricter penalties for companies that misuse the Indigenous procurement program. This call comes in response to a Globe and Mail report detailing how a large nursing company gained access to federal contracts reserved for Indigenous businesses through a joint venture with a single First Nations nurse.

The report revealed that an audit by Indigenous Services Canada in 2016 found the joint venture non-compliant with the program, leading to its removal. However, the same department continued awarding contracts to the nursing company, totaling over $131.7 million since 2019. This practice is permitted under current regulations.

Metatawabin emphasizes the need for stronger consequences, such as fines or temporary suspensions, to deter companies from exploiting the system. He criticizes the practice of "renting-a-feather," where non-Indigenous companies partner with Indigenous individuals solely to gain access to business opportunities and avoid genuine social impact on Indigenous communities.

Metatawabin's organization, along with other Indigenous economic groups and the Assembly of First Nations, advocates for the creation of a First Nations Procurement Organization. This body would manage the Indigenous Business Directory, ensuring the listed companies are genuinely Indigenous-owned.

Tabatha Bull, president and CEO of the Canadian Council of Indigenous Business, supports stronger penalties for companies violating the program's rules. She acknowledges the program's necessity but emphasizes the need for reform.

Indigenous Services Minister Patty Hajdu acknowledges the need to update the Procurement Strategy for Indigenous Business. However, she defends the nursing company, stating that it provides essential health services to First Nations communities.

The Commons government operations committee is currently investigating the federal Indigenous procurement program, which awarded $862 million in contracts in the 2022-23 fiscal year. This program aims to support the growth of Indigenous businesses and contribute to a larger goal of allocating 5% of federal contract spending to Indigenous businesses.

However, concerns remain about the program's effectiveness in achieving its intended goals. Assembly of First Nations Regional Chief Joanna Bernard estimates that only 1% of funding reaches genuine Indigenous businesses, with the majority going to shell companies.

NDP MP Taylor Bachrach criticizes the government's arbitrary procurement target, arguing that it incentivizes officials to overlook program abuse. He emphasizes the need for the government to prioritize delivering for Indigenous people rather than simply aiming for good optics.