Government Operations Committee on Jan. 30th, 2018

[Virginia Flood]

All I was going to say is that one of the ways of looking at complexity is actually handing it out to business.... It's part of our business. It's not what happens in a corner in Howard's shop. It's part of our overall culture. In our operations, we're very much aware of the aboriginal capabilities. The business opportunities come from multiple sources. It's not just one area.

[Kelly McCauley, Conservative, Edmonton West, AB]

I want to thank the two of you for being with us today, but also for all the work that Suncor is doing. We've heard repeatedly from other witnesses that the gold standard for involving indigenous business has been the oil sands companies—you, Enbridge, ATCO and some of the others. It's quite remarkable that such a maligned industry is showing the way in environmental leadership, but also in helping the indigenous population, so thank you very much. It makes me wonder how much we are hurting indigenous people by cancelling Northern Gateway and Energy East, and how much opportunity is lost for them as a result, but I'll go on.

You spoke about how you tie in your subcontractors. I'm wondering if you could expand on that a bit more and what the process is like. We obviously have a lot of large contractors here; we're doing billions of dollars' worth of work rejuvenating the parliamentary district, and we're heard from aboriginals that they got shut out entirely. How are you doing your large projects to make sure the subcontractors are employing aboriginal companies?

[Howard McIntyre]

That's a very important question. I'd like to lead off by saying that we don't demand that they do so, so it has to make sense. We have strategic partnerships with many of our large contractors who did a project in Fort Hills with some big companies there. We demonstrate to them the results that we've had working with aboriginal groups as primary contractors or subcontractors. It all starts with, first of all, making them aware of what's possible; making them aware of the quality of work and the costing that's available there.

Second, I mentioned the focus on sustainability. I would say that Suncor and probably other companies having been focused largely on managing environmental, economic, and community responsibilities within what we manage. Starting last year, we said that we have a much bigger footprint than we occupy. This is a personal conversation between all of our contractors and my group to say that when we score them, in terms of when we want to do business with them, where their profits go, what they do in your community, who they employ, and what they're doing to improve the environmental footprint can be very much part of our portfolio. We actually have a scoring mechanism. More than 10% is on the evaluation of them in this area. They'll come through with cost and capability, but they know it's important to us.

[Kelly McCauley, Conservative, Edmonton West, AB]

Is there any chance you can share that scoring with us?

[Howard McIntyre]

I'll just say it's at 10%, but I see it growing going forward. I could probably wrap it all up by saying that we don't do this because we have to; we do this because it makes good economic sense with a great labour force that's strategically committed to these types of portfolios that we're looking at for decades to come. It's good to do business with companies that have that long-term strategy as opposed to some companies where they're here and there. They're there for the long term.

[Kelly McCauley, Conservative, Edmonton West, AB]

Perfect.

Mr. McIntyre, you talked about joint business development plans and how you work with Wood Buffalo. I used to work in Fort McMurray and I understand it's a wonderful business partner. Do you find a lot of the success that you're having contracting out or engaging aboriginal businesses is because of the partnerships you have with the band? How are you achieving success with those who may not be related directly with the band or have such a strong band as Wood Buffalo?

[Howard McIntyre]

It's a little bit of both. I have the business we do here—Mikisew Cree, Athabasca Chipewyan, Fort McKay First Nation, Fort McMurray No. 468, which you're probably familiar with, and some others there. Certainly the bands have really done a good job on setting up their—

[Kelly McCauley, Conservative, Edmonton West, AB]

Let me interrupt for a second. Going forward with the government, as we try to develop a process that makes it easier to engage, should that be one of our focuses, to start with the relationship with the band? Mr. Cheechoo talked about the difficulty getting the information out. Should we start at the band level or should it be two-pronged, with the band as well as...?

[Howard McIntyre]

It's to the entrepreneur, so I would say it's both. Many times the band represents entrepreneurs, so they can represent both, but I would say reach out to the bands who have developed a lot of capability in planning in these areas and post your “ready to do business” sign with entrepreneurs in the various areas of Canada.

[Kelly McCauley, Conservative, Edmonton West, AB]

The last question is for Mr. Cheechoo, but also for Mr. McIntyre and Ms. Flood.

In the text of your opening remarks, under “Sustainable Supply Chain”, you wrote, “We want to ensure businesses that we contract with are delivering real value to Aboriginal People”. This came up before. What's of more value—a contract with an aboriginal owner but all non-aboriginal people or with say, a non-aboriginal owner who's employing lots and lots of aboriginals?

Where should our focus be?

I've only left you about a minute.

Maybe, Mr. Cheechoo, you can start.

[Patrick Cheechoo]

I would say they are equally important. I think using CCAB's program as.... You know they grade as gold level, as Suncor has mentioned—they're gold under the PAR program. Both are equally important.

[Kelly McCauley, Conservative, Edmonton West, AB]

Okay, go ahead, Mr. McIntyre.

[Howard McIntyre]

I would agree with Mr. Cheechoo. The reason I do is that often many of the aboriginal communities get employed as subcontractors by a major company and kind of learn the ropes, and then they spin off and become their own entity. So both of them are equally important, for probably different reasons.

[Kelly McCauley, Conservative, Edmonton West, AB]

I bring this up because....

[Virginia Flood]

It's also part of that long-term capacity-building. You have to really be looking at all different aspects.

[Kelly McCauley, Conservative, Edmonton West, AB]

I brought this up because we heard one witness concerned about a shell company being set up where none of the value is getting delivered to indigenous people, but just as part of a hidden shell company. How do we get around that? How do we avoid that?

Thank you for your time.

[The Chair, Conservative, Tom Lukiwski]

We perhaps can get more into that with our next intervenor.

Mr. Weir, for seven minutes, please.

[Erin Weir, NDP, Regina—Lewvan, SK]

Thank you.

I would like to ask Mr. Cheechoo about the procurement strategy for aboriginal business that is currently administered by INAC. Of course, INAC is being split up into two new departments, Crown–Indigenous Relations and Northern Affairs, and Indigenous Services. I'm wondering if the Native Women's Association of Canada has a position or a perspective on which of those new departments should be administering the aboriginal procurement strategy.

[Patrick Cheechoo]

The short answer is no. However, I think the important thing is that how it's implemented is why I'm here. Actively reaching out to indigenous women entrepreneurs is kind of the reason I'm here. Whoever administers it, we need to have some formal activity toward outreach for indigenous women entrepreneurs.

[Erin Weir, NDP, Regina—Lewvan, SK]

I guess to broaden the question, are there other changes to this procurement strategy for aboriginal business that you would recommend? Are there aspects of it that could be improved to work better for aboriginal women entrepreneurs?

[Patrick Cheechoo]

Yes, as I mentioned briefly, we just need a formal process of outreach and training for indigenous women entrepreneurs. Even further, I would like see the Canadian Council for Aboriginal Business enhance its PAR program to include some kind of a highlight for indigenous women. So, it could be activities from Northern Affairs but also working with other partners in that process.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. McIntyre, you mentioned the possibility of businesses that might nominally be aboriginal owned but do not actually have much aboriginal participation. Mr. McCauley also got into this question of ownership versus employment. I'm wondering how Suncor defines an aboriginal business in its procurement.

[Howard McIntyre]

The work that is done has to be aboriginal content. We don't have any shell companies that represent themselves as an aboriginal group with maybe just one person. We get right down to who is doing the work and where the money goes. It's been consistent ever since we started this in 1999, so the comparison of the numbers is on the same basis and a large part of our.... If there is a subcontracted piece of business to a major construction firm and it's provided with aboriginal resources, we measure that piece, not the value of the whole company's work but just the value of the subcontracts. We're very transparent about it and right-minded in what to call it.

[Erin Weir, NDP, Regina—Lewvan, SK]

Just to get down to brass tacks, if half of the employees were aboriginal then you would count half the value as aboriginal business. How do you arrive at a figure like $520 million?

[Howard McIntyre]

We take a look at the company representing the work that's being done, aboriginally owned. An aboriginally owned company could have workers, temporary workers, who are not aboriginal, but we would look at the spend with that company.