Government Operations Committee on Nov. 7th, 2017

[Josh Riley]

It's a program that comes from some of our research. The aboriginal business survey that Max has referred to has identified some of the key needs aboriginal businesses and entrepreneurs face in starting and growing their businesses.

In response to that, we have launched an online platform. It's a series of webinars and networking events to connect aboriginal businesses and entrepreneurs with financing opportunities, with the expertise they need to start and grow their businesses, and with the networks they need to develop relationships for those partnerships to occur.

[Marc LeClair]

The Métis manage about $55 million in employment and training assistance programs. We use those programs in those joint ventures. The 15 joint ventures we entered into in the last three months all have a training component. We incentivize those companies to work with us by using our training resources to get the people ready for the contracts that eventually come.

The renewal of the aboriginal skills and employment training program, which is before cabinet now, is very important. It needs to be retooled. We're looking forward to having that renewed so that we can use the employment and training money to create the business opportunities and employment opportunities for young, indigenous people.

[Erin Weir, NDP, Regina—Lewvan, SK]

Go ahead.

[Bertha Rabesca Zoe]

In the Northwest Territories, we have the oil and gas activities in the north, and we have the mining activities, the diamond mines, in the south. For us, using ASETS, the mining companies, Aurora College, and the Mine Training Society have been doing a lot of training programs for underground miners, and training for working at the mines. I think that's been very successful, so we have a lot of skilled workforce in those areas.

I want to say a few words on what my friend was saying about minimum indigenous content. My experience was in working with Indian Affairs and Public Works on what we call the ABPs in the RFPs. The ABP is the aboriginal business plan that goes into these RFPs, which is usually about 25% of the proposal. I think that's what you were talking about. This is the closest we were able to get involved in how to plan so that aboriginal businesses are able to get into the contracts.

This is where we were having problems. Even though you have a minimum indigenous content or aboriginal business plan in these RFPs, they weren't working. For example, if contractors are successful and they are not indigenous contractors, and the ABPs require them to hire so much percentage of indigenous peoples, basically there's no way to make sure they're meeting those obligations. They could phone one of our offices and talk to the career development office and say they need this type of skilled worker. However, all they're required to do is reach out. There is no requirement to ask, “Okay, have you hired the skilled workers according to this?”

I think there needs to be a stricter guideline. If indigenous people or indigenous businesses aren't able to successfully bid, or if they're not satisfied that.... You've seen these contract bids. When it comes to the RFPs and the aboriginal content, it needs to be more enforceable.

I was involved in the drafting of those numbers to try to make it more favourable, but after involvement with a couple of those, I was told I couldn't be involved anymore. I don't know what happened to them after that. The bottom line is that Tlicho have not been able to use PSAB in our region, and even the RFPs, the 25% aboriginal content, isn't working at all for us.

[Erin Weir, NDP, Regina—Lewvan, SK]

To maybe pick up on the point about PSAB, with the division of INAC into two new departments, I'm wondering if any of you have views on whether PSAB should be located in the new department of crown-indigenous relations or the new department of indigenous services.

[Colin Salter]

Certainly from the Tlicho perspective, it belongs in crown-indigenous relations. We're not just dealing with a federal policy, as I explained in the beginning, we're dealing with the implementation of chapter 26 of the Tlicho agreement and fulfilling that constitutional objective in there.

I think if Canada is not looking at that and the way that policy rolls out through its treaty commitments, then the policy is somehow above the treaty promise. I really think it belongs in that department, from our perspective.

[Marc LeClair]

To be perfectly frank, I don't know that it really belongs in that department at all.

With Public Works and Government Services, the Treasury Board could make it accountable, but they need to be involved. All it does when you send it to Indigenous Affairs is that then they have to run over to Public Works to try to convince the contract guy who is writing up the contract to put some requirements in. It needs a more multi-committee type of approach. We've had it on specific procurements. We've done it before.

In this pitch I'm making, this is not just “give them the contracts”. We have to structure the system so they can get access to contracts and a fair playing field. We don't have that now. I mean, the stuff the government is purchasing is too big.

[Max Skudra]

I would—

[The Chair, Conservative, Tom Lukiwski]

Thank you very much. Hopefully, we'll get to it in our last intervention, from Mr. Peterson, but we are out of time on this intervention.

Mr. Peterson, you have seven minutes, please.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you, Mr. Chair.

Thank you, everyone, for being with us today. We much appreciate it. I am finding it very informative, as I'm sure all of my colleagues are.

Mr. Skudra, you were about to follow up on that. Please, go ahead.

[Max Skudra]

I'll keep it very brief.

I would agree. Our focus would be more on a multi-ministerial approach, to ensure that there are different voices at the table. I think that a sort of “all roads lead to INAC” mentality has settled in. We've seen that people are trying to break that up. There is Public Works, and there is Infrastructure. There are more folks involved, but I don't think all conversations should end at INAC.

We would strongly support what the Tlicho were saying, about the need for measurable teeth in procurement policy. Whichever way we go, that is something we really need to see more of.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

That's great. Thank you for that.

Mr. LeClair, you mentioned a program run by Mr. Skudra called PAR, I believe.

[Marc LeClair]

Yes.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Can either of you explain what that is?

[Max Skudra]

CCAB runs the only indigenous-focused corporate social responsibility program in the country. It's a third party-verified system, whereby the company effectively self-audits, and then we send a verifier to come up with another score. The two scores are put together, and a judge and a committee, on which we have an ex officio non-voting member but we don't have a direct say, come up with the final score, which then places the company on a spectrum of bronze, silver, gold, and upcoming platinum.

It is the CSR program in Canada. It has some of the largest companies, from IBM to Suncor. You name the industry, you name the province, we have major representation. It focuses on ensuring that corporate Canada, throughout its supply chain and throughout any major companies' operations—we have all four major banks—is focused on engaging aboriginal business.

[Josh Riley]

Where the program adds a lot of value, and where this kind of process adds a lot of value, is that it's an independent third party verification of performance in aboriginal relations, including procurement. It's verified by an aboriginal verifier, and the level of performance is determined by an aboriginal jury. There was a comment made earlier about some indigenous shell companies winning procurement contracts. Having that independent verification is a great way of risk management.

Another approach we take that does that well is our certification of aboriginal businesses. We pre-certify for our member aboriginal businesses as being 51% or more aboriginal-owned and controlled, and that is a great way for aboriginal communities and for those businesses to be sure that those procurement opportunities are going to certified aboriginal businesses. It's a great way of risk managing for that organization. It's also a great way for those aboriginal businesses to market themselves for procurement opportunities among corporate members.

[Max Skudra]

Sorry, just one last thing.... Some of our major corporate members have put points on their procurement scorecard based on a company's rating on our PAR system. The rationale for that is not just to say, “You have 51% ownership” or “You have a certain percentage of aboriginal employees”, but “What are they doing? Are they front-line staff? Are they in management positions? Are they in senior leadership roles?” It's a way of doing a much deeper dive on a company.

[Marc LeClair]

In the context of your committee's discussion, it's a benchmarking system, the same as we have for employment equity in the labour section that looks after benchmarking.

I just want to caution you on that, because we have really bad results in some of the federally regulated employment areas. You get these glowing reports of some of the best practices, until you read the data. If you didn't know about the data and just read all of the best practices, or you went to their awards galas and people were incentivized....

Benchmarking and incentivization are something we could think about for federal departments, to incentivize them to do better on PSAB and on procurement spend generally. PSAB is just one component of the procurement spend. There is indigenous minimum, indigenous content, and supplier development, which we really haven't talked about. How do we get these indigenous companies to grow and compete so we don't have to structure the procurement system so that they can get something?

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

On the PAR, I think it shows that the private sector puts a value on it, absolutely, because they want to get the gold medal, for obvious reasons. It makes good business sense as well.

I'm just wondering—and this is just something to think about—whether there is a role that Public Services and Procurement can play, and maybe when we are tendering out contracts, we can give extra points to suppliers who have certain rankings under the PAR.

[Max Skudra]

That is a practice that we're seeing in the corporate sector today.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Okay. Good. That's good to know.

I know we're running out of time, and I do have a question for our other witnesses here, too.

Mr. LeClair, Aboriginal business is growing but you say it's not diversified enough. Can you elaborate on that? Is there a role we can play with the procurement to help the diversification process?

[Marc LeClair]

The diversification is going to occur through joint ventures with other companies, so the companies can grow. We didn't know how to put in footings for those towers. The only way we could learn was to joint venture with a company that did it. It's the same thing when we erected the towers. It's the only way to do it. It's the same thing with stringing and Enbridge and all these things. We have to incentivize business to work with indigenous people and it doesn't have to cost any more money.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

No.

[Marc LeClair]

The companies will do it within the competitive bidding process. We've seen this. We're about to see Line 3 come forward. There's going to be five mainline contractors that are going to be bidding on Line 3. We know all of them and we know what the subcontracting services are that are going to be required. Enbridge has told us the company that incentivizes and brings the most indigenous involvement is going to get a good score and they're going to take that into consideration for the bid.

In all of those companies that we talked to that are providing those services, they're more than happy to sit down and do business. What we need to do with our federal system is to incentivize larger companies to get indigenous people involved.

[Max Skudra]

Building on that point, we were talking about Suncor and Enbridge, none of those companies are sacrificing price, quality, or safety.