A recent assessment reveals shortcomings in the federal government’s implementation of a plan to engage Indigenous enterprises, describing it as a series of failures due to inconsistent guidelines, lack of oversight, and insufficient verification of businesses. The examination conducted by the Procurement Ombud, disclosed systemic deficiencies in awarding contracts through the Procurement Strategy for Indigenous Business, resulting in numerous contracts being granted without confirming Indigenous eligibility.
The government aims for five percent of all contracts to be allocated to Indigenous businesses, which is presented as a positive indicator of the strategy’s effectiveness. However, the Ombud, Alexander Jeglic, criticized this portrayal, stating that it masks the actual failure of the initiative. The absence of accountability mechanisms hinders the evaluation of whether this target is being achieved, as noted in the report.
During the review period from April 1, 2023, to March 31, 2025, various government agencies, including Indigenous Services Canada (ISC) and Public Services and Procurement Canada (PSPC), were scrutinized. To qualify under the strategy, Indigenous businesses must be at least 51 percent Indigenous-owned and controlled and listed in the Indigenous Business Directory. Notably, the review did not assess the management of the Indigenous Business Directory.
Out of the 27 contracts examined, seven were awarded to joint ventures, combining Indigenous and non-Indigenous businesses as a single entity, representing a significant portion of total expenditure. The report flagged a lack of monitoring for these contracts to ensure compliance with Indigenous participation requirements, highlighting a major governance flaw.
The report underscored that despite 13 contracts meeting the audit threshold of over $2 million, audits were not consistently conducted, indicating a comprehensive failure in the process. Departments failed to verify businesses against the Indigenous Business Directory, exposing a critical lapse in compliance protocols.
In response to the report, PSPC endorsed the idea of establishing a recourse mechanism for Indigenous businesses to address contract-related grievances, deferring the responsibility to ISC due to its close collaboration with Indigenous partners. ISC corroborated its commitment to rectifying the identified issues by working with Indigenous stakeholders to enhance policies and potentially transferring the verification of Indigeneity to a new framework.