Urgent Call for Liberals to Revamp $1.6B Indigenous Procurement Program

UPDATE: A cross-partisan committee of MPs is demanding that the Liberals take immediate action to correct the eligibility rules of the federal government’s $1.6 billion annual Indigenous procurement program. This urgent plea comes as concerns mount over non-Indigenous companies exploiting loopholes designed to benefit First Nations, Métis, and Inuit businesses.

On October 20, 2023, the House of Commons’ Indigenous and Northern Affairs Committee released a report highlighting serious issues with the program. Non-Indigenous firms have been found to circumvent verification standards, allowing them to falsely claim ownership by Indigenous individuals and gain access to federal contracts. Global News previously uncovered these alarming practices, revealing they range from “rent-a-feather” agreements to outright misrepresentation.

Committee member and President of the Waceya Métis Society, Anthony Wingham, emphasized, “When non-Indigenous companies masquerade as Indigenous-owned, they divert resources away from those who truly need them.” He added that such exploitation not only undermines the credibility of the procurement process but also discourages young Indigenous entrepreneurs, questioning how they can compete fairly when outsiders manipulate the system.

The MPs indicated that the federal government must collaborate with Indigenous communities to implement a temporary fix while working on long-term reforms. The Procurement Strategy for Indigenous Business (PSIB), established in the late 1990s, was intended to ensure that a specific percentage of contracts is reserved for Indigenous-owned firms, serving as a step towards economic reconciliation.

However, revelations from a recent audit by Indigenous Services Canada (ISC) raised alarm bells. The audit found that the verification process for determining Indigenous ownership is severely lacking. Out of nearly 2,925 active listings in the Indigenous Businesses Directory as of August 2024, only 215 audits were conducted in the 2023-24 fiscal year. Critically, 68% of a sample of Indigenous businesses had incomplete or missing verification documents, raising serious questions about the integrity of the program.

The ISC’s internal audit also identified significant “gaps” in the monitoring and compliance processes, calling for urgent improvements to enhance the program’s effectiveness. Key deficiencies include the absence of standardized verification procedures and inadequate training for staff responsible for oversight.

As this situation develops, the pressure is mounting on the government to act swiftly. Officials have not yet responded to the committee’s recommendations, and Indigenous leaders are watching closely to see if real change will occur. The integrity of the PSIB is on the line, and immediate actions are critical to restore trust and ensure that contracts intended for Indigenous communities truly benefit those they were designed to uplift.

The committee’s report serves as a clarion call for reform, urging the government to prioritize these changes now. With the future of Indigenous economic development hanging in the balance, stakeholders are calling for transparency and accountability to prevent further exploitation in the procurement process.

Stay tuned for updates as this story continues to develop. The implications of these findings could reshape how federal contracts are awarded and protect Indigenous businesses from unfair competition.