Evidence of meeting #36 for Government Operations and Estimates in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was business.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Clerk of the Committee  Mr. Paul Cardegna
Philip Ducharme  Director, Innovation and Entrepreneurship, Canadian Council for Aboriginal Business
Donald  Rocky) Sinclair (President, Aksis Edmonton Aboriginal Business and Professional Association
Marnie Suitor  Director, Aksis Edmonton Aboriginal Business and Professional Association
Shannin Metatawabin  Chief Executive Officer, National Aboriginal Capital Corporations Association

5:45 p.m.

Conservative

The Chair (Mr. Robert Kitchen (Souris—Moose Mountain, CPC)) Conservative Robert Gordon Kitchen

I call the meeting to order.

Welcome to meeting number 36 of the House of Commons Standing Committee on Government Operations and Estimates. The committee is meeting today from 5:44 Ottawa time to hear witnesses as part of its study of businesses owned by under-represented groups. We have the full two hours to do the meeting and we look forward to hearing from our witnesses.

I'd like to take this opportunity to remind all participants at this meeting that taking screenshots or taking photos of your screen is not permitted.

To ensure an orderly meeting, I would like to outline a few rules to follow.

Interpretation in this video conference will work very much like in a regular committee meeting. You have the choice at the bottom of your screen of either “Floor”, “English” or “French”. Before speaking, please wait until I recognize you by name. When you are ready to speak, click on the microphone icon to activate your mike. When you are not speaking, your mike should be on mute. To raise a point of order during the meeting, committee members should ensure that their microphone is unmuted and should say, “Point of order” to get the chair's attention.

The clerk and the analysts are participating in the meeting virtually today. If you need to speak with them during the meeting, please email them through the committee email address. The clerk can also be reached on his mobile phone.

For those people who are participating in the committee room, please note that masks are required for all staff at all times. MPs may remove their masks only when they are seated.

I will now invite the representatives of Aksis Edmonton's Aboriginal Business and Professional Association, Mr. Sinclair or Ms. Suitor, to make their presentation.

Mr. Sinclair, we can't hear you.

5:45 p.m.

The Clerk of the Committee Mr. Paul Cardegna

I believe, Mr. Chair, that Mr. Sinclair is going to try a different audio setting.

5:45 p.m.

Conservative

The Chair Conservative Robert Gordon Kitchen

Okay. Thank you.

5:45 p.m.

Liberal

Steven MacKinnon Liberal Gatineau, QC

I have a point of order, Mr. Chair.

Perhaps, with your discretion, we could move to another witness and then come back to Mr. Sinclair.

5:45 p.m.

Conservative

The Chair Conservative Robert Gordon Kitchen

Certainly. I think that might be good.

Mr. Sinclair, while you're working on that, what we'll do is go to our second group, the Canadian Council for Aboriginal Business.

If they would go first, we'd appreciate that as Mr. Sinclair works out the details of his audio system. Thank you.

5:45 p.m.

Philip Ducharme Director, Innovation and Entrepreneurship, Canadian Council for Aboriginal Business

Good afternoon. My name is Philip Ducharme. As director of innovation and entrepreneurship of the Canadian Council for Aboriginal Business, I want to thank you, Mr. Chair, and all the distinguished members of this committee for the opportunity to provide you with my testimony and to answer your questions.

Speaking to you from my home office, I acknowledge that the land is the traditional territory of many nations, including the Mississaugas of the Credit, the Anishinabe, the Chippewa, the Haudenosaunee and the Wendat peoples, and is now home to many other first nations, Inuit and Métis people. I am Métis, with all eight of my great-grandparents attached to Métis scrip, and I am a citizen of the Manitoba Metis Federation.

From the beginning of the pandemic, the federal government put out calls to procure personal protective equipment from businesses. As our president and CEO Ms. Tabatha Bull has noted during her appearances at House and Senate committees over the last year, numerous indigenous businesses were prepared and continue to be prepared to provide PPE to meet Canada's medical needs. Lists of such indigenous businesses were provided to many federal departments as early as March 2020, but only a small fraction of the over $6 billion in federal procurement contracts for PPE was awarded to indigenous businesses.

Over the course of the pandemic there were two RFPs that sole-sourced from indigenous businesses. In a press release of September 21, 2020, PSPC noted that seven indigenous companies were awarded contracts for non-medical face masks in one such RFP for a total of approximately $2.5 million, with an unprecedented 233 indigenous-led businesses responding. PSPC also reported that approximately $68.5 million in contracts had been awarded to self-identified indigenous businesses for requirements related to COVID-19. We understand through discussions with PSPC and through our own combing of publicly available data that this value is now slightly higher. However, we continue to be unable to obtain confirmation of the total spend to indigenous businesses on PPE.

To remedy this information gap, as suggested by Ms. Bull on February 22, I propose that this committee consider measures that would mandate government departments and agencies to report on their purchases from indigenous businesses as part of their submissions for the main estimates and the supplementary estimates. Simply put, we cannot evaluate and improve upon what we do not measure and report.

Through Supply Change, CCAB's trademarked indigenous procurement strategy, we have had continuous dialogue with indigenous businesses as it pertains to federal procurement. What we have learned is that indigenous businesses are very keen on pursuing opportunities but have had numerous challenges, including identifying those opportunities. With this in mind, we post all federal set-aside RFPs within our own aboriginal procurement marketplace.

Other challenges that indigenous businesses have identified to us include the complexity of the RFPs. A $100,000 bid requires almost the same amount of time and resources to respond to as a $10-million bid. In many bids, previous work history with the federal government is required, and without it the bid is non-compliant, making it difficult to garner new indigenous suppliers. Another key challenge we have heard is that there is no feedback on why a bid was unsuccessful. One of our indigenous business members responded to 32 federal RFPs without success, but without any feedback, they did not know where they needed to improve on their bid.

That said, I want to note that throughout my extensive career working with indigenous businesses and federal procurement, I can say that I've never had the opportunity of collaborating as closely with various federal departments, and in particular with PSPC, through OSME, as I have in the last year. Together with the various OSME regions, we have held numerous information webinars for indigenous businesses and will continue to do so. This collaboration helps indigenous businesses navigate the complexities of responding to federal bids and is one of the ways we continue to work with the federal government to support the mandate of achieving a minimum 5% indigenous procurement target.

Additionally, other measures to increase federal procurement from indigenous businesses should include ensuring that indigenous procurement targets appear in every departmental plan and every executive's professional management plan to ensure administrative leadership and fulfillment of the government's procurement targets for indigenous businesses. This change could be made administratively, without the need for legislation, through an amendment to the government's directive on performance management.

CCAB is committed to continuing to work in collaboration with the government, our members and our partners to help rebuild and strengthen the path towards reconciliation and a healthy and prosperous Canada.

Thank you for your time.

5:50 p.m.

Conservative

The Chair Conservative Robert Gordon Kitchen

Thank you, Mr. Ducharme.

Mr. Sinclair, are you comfortable at this point in time?

5:50 p.m.

Donald Rocky) Sinclair (President, Aksis Edmonton Aboriginal Business and Professional Association

I am back, and I do apologize.

5:50 p.m.

Conservative

The Chair Conservative Robert Gordon Kitchen

That sounds much better.

5:50 p.m.

Donald (Rocky) Sinclair

Good afternoon, Mr. Chair and committee members.

First, thank you very much for the opportunity to address the committee today.

My name is Rocky Sinclair, and I'm the CEO of the Alberta Indian Investment Corporation. We're an aboriginal financial institution located in Enoch Cree Nation. My comments today, however, will be in my capacity as president of Aksis, which is an indigenous business and professional association formed in 2013. We're located in Edmonton.

Although we have not engaged in a formal survey or study related to federal procurement opportunities for indigenous peoples in Edmonton, we are confident that there are common concerns with the procurement strategy that are applicable to the majority of indigenous businesses regardless of where they are located.

There are processes that can be overly complicated and difficult to navigate. That's known. Also, the reach of the procurement opportunities may not be getting to the indigenous businesses. There are limitations there, certainly. There are also concerns about some of the qualifying criteria that might be too limiting or stringent. That is also known.

For urban indigenous businesses, there are unique challenges, given that they are are typically stand-alone in nature and do not have a support system that may be available in other communities. Many indigenous businesses in urban settings are typically interspersed throughout the city and are not concentrated in one area; therefore, they do not have peer support readily available. Also, many of those businesses are owner-operator businesses. The proprietors are very hands-on and do not have the resources to navigate through complex program portals to look for opportunities.

It is our view that if proactive strategies are introduced, along with mandated targets and appropriate metrics, we will see improvements in the uptake of indigenous businesses in securing opportunities with the federal government, and we would recommend that consideration. If there are not significant and fundamental changes to the indigenous procurement strategy, the issues that indigenous businesses have had with the strategy since 1996 will continue.

I have a colleague who is with me, and she will provide further comments. She will take up the balance of my time.

Thank you very much.

5:55 p.m.

Marnie Suitor Director, Aksis Edmonton Aboriginal Business and Professional Association

Thank you, Rocky. I believe that's my cue to speak now.

Good afternoon, and thank you very much for the invitation to be part of this session today.

My name is Marnie Suitor, and I'm speaking to today from Amiskwaciy Waskahikan, which is Edmonton in Alberta, the heart of Treaty 6 territory and in Métis Region 4. I am a director of Aksis and I am also the principal partner of an indigenous-owned consulting practice known as In Synch Consulting.

Over the past 18 years, the majority of my focus has been on capacity building within indigenous communities, businesses and entrepreneurial endeavours. I have witnessed many entrepreneurs and department managers struggle with what I refer to as the end-to-end procurement process, whether that be at the front end when they they're searching for and identifying an opportunity to respond to, whether that's through the pre-qualification process, or whether that is in the contract and reporting management that is part of the project compliance.

It is a very tedious and onerous process, and it requires infrastructure to support and an expertise to complete the core elements of procurement. In many cases, entrepreneurs find that the return on their investment of time and resources just simply doesn't add up.

That said, I do believe that there are ways to streamline the process and to refine the policies and procedures to enable indigenous businesses to fully and meaningfully participate in the federal procurement process.

I want to thank you for allowing me to share these few thoughts and I look forward to participating as the session unfolds.

Thank you.

5:55 p.m.

Conservative

The Chair Conservative Robert Gordon Kitchen

Thank you. We appreciate your comments and look forward to questions.

Now we have the National Aboriginal Capital Corporations Association.

5:55 p.m.

Shannin Metatawabin Chief Executive Officer, National Aboriginal Capital Corporations Association

Thank you.

My name is Shannin Metatawabin. I am the CEO of the National Aboriginal Capital Corporations Association, or NACCA. I'm also a member of the Fort Albany First Nation of the Mushkegowuk nation. Thank you for the invitation to speak to your committee’s study of federal procurement before and after the COVID-19 pandemic.

Before I begin, I would like to acknowledge that—

5:55 p.m.

Conservative

The Chair Conservative Robert Gordon Kitchen

Excuse me a minute.

Ms. Vignola, is there a translation issue? Is that correct?

June 9th, 2021 / 5:55 p.m.

Bloc

Julie Vignola Bloc Beauport—Limoilou, QC

I am really sorry to interrupt this testimony, but Mr. Metatawabin's sound is too bad for the interpreter to be able to do their job properly. I don't know whether he has selected the right button on his computer. I'm hearing the echo as well.

6 p.m.

The Clerk

If I may, Mr. Chair—

6 p.m.

Conservative

The Chair Conservative Robert Gordon Kitchen

I think Mr. Metatawabin has found out what the issue might have been, and he will try that and see if it makes a difference.

Go right ahead if you want to start again.

6 p.m.

Chief Executive Officer, National Aboriginal Capital Corporations Association

Shannin Metatawabin

I just want to acknowledge that I'm taking this call on the Mi'kmaq territory of beautiful P.E.I.

NACCA represents a national network of 59 indigenous-led institutions. Our members work with first nations, Métis, and Inuit businesses on a daily basis. NACCA is also one of six organizations in a national indigenous procurement working group formed in July 2020. Canada created our working group to coordinate advice on policy and legislative frameworks needed to achieve a minimum target of 5% indigenous procurement government-wide.

In these difficult times, procuring goods and services from indigenous businesses provides one concrete means to further economic and social reconciliation, yet over the past decade, opportunities for indigenous procurement seem to have remained unchanged. As far as we know, the high point was in 2014, with $227 million in indigenous set-asides, which was only 0.8% of total federal procurement that year. I say, “as far as we know” because one issue our group has identified is the lack of consistent, accessible data across federal departments.

Why do the opportunities remain so few, even with the 5% target upheld throughout the pandemic? Our research has revealed several factors.

The first issue is government policy and process. The benefits of indigenous procurement are not widely appreciated across government, and the current policy directs little spending to indigenous suppliers. The process itself is decentralized, which limits implementation of the 5% target to only a handful of departments. Added to this, departments are not required to report publicly on their targets, and there are no consequences for failing to meet them. There are few incentives to change, so things remain the same.

A second barrier rests with the capacity of the indigenous businesses to bid on government contracts. Many find the process difficult to navigate. Many are not registered with the aboriginal business directory, which is now managed by government. Also designed and managed by the government are the outreach strategy, training and tools, which do not meet the needs of our businesses.

A third barrier may be the criteria defining an indigenous business. The current criteria require 51% indigenous ownership and control and 33% of employees to be indigenous. Taken together, these two requirements are hard to achieve, and some indigenous businesses may be excluded.

Then what is to be done? Our working group has identified four solutions:

First and above all, increasing indigenous access depends on having mandated government-wide targets. Setting a target of 5% across departments was a crucial first step, but it will exist only on paper unless the monitoring and supports needed are also introduced.

Second, monitoring is key. Canada needs to improve its data collection, reporting and governance of the process to drive results. The federal government needs to increase its transparency government-wide so that we have an accurate portrait and indigenous oversight.

Third, meeting the target will require streamlining and demystifying the procurement process to make it more accessible. The process will need to address specific barriers that prevent our businesses from participating, including any introduced by the definition of “indigenous business”.

Fourth, the indigenous institution has to lead in identifying, advancing and delivering tools and services to support implementation of the target. Our business owners need an indigenous-led centre they can trust to develop a comprehensive, up-to-date directory, using a definition that works for them as well.

These are the measures our group has identified, and we are now bringing forward a robust research program to support them. We are also coordinating with our three government counterparts tasked with developing a new policy framework with PSPC and the treasury department.

Clearly, there is much to be done to achieve the target and much that can be done. The experiences of jurisdictions like Australia and Saskatchewan have shown us that with the right will, monitoring and supports, we could not only meet but exceed the 5% target and increase it threefold to fourfold.

In the COVID crisis and beyond, addressing this aspect of reconciliation is straightforward. Meeting the 5% target will depend on clear federal direction, incentives throughout the bureaucracy, and an indigenous lead to work with and register our business owners. In a fairly short time, we could move this target from aspiration to reality, promoting our shared prosperity.

Meegwetch.

6:05 p.m.

Conservative

The Chair Conservative Robert Gordon Kitchen

Thank you, Mr. Metatawabin.

Thanks to all three of you for your presentations.

We'll now go into our questions and answers. Our first round will be for six minutes, starting with Mr. McCauley.

6:05 p.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

Thanks, Mr. Chair.

To our witnesses, thank you for your patience and for sticking with us. I know that staring at a blank Zoom screen for two hours is probably not the highlight of your day, so thank you.

I want to thank everyone for their opening statements. It pains me that we have to invite witnesses here today for this study, because we went through an almost identical process three to three and a half years ago in the last Parliament, when we heard different people from the indigenous communities say basically the same things we're hearing today—big promises, no follow-through, and on and on. I'm glad you were able to come and reinforce what we've heard before.

One thing that's always stunned me about procurement from the indigenous community is that when we had the last set of committee meetings on this issue, we heard from indigenous people that they were getting no help from the government side, no real results. Then we heard witnesses say that they were getting great help from the energy industry, especially in Alberta. Then, when we brought the procurement bureaucrats in, they almost threw their shoulders out patting themselves on the back so hard. There's a complete disconnect between what you're telling us and what the bureaucrats will end up telling us.

One of the things I'm really glad you brought up was the part about tracking and setting goals. We've seen procurement for three straight years now, with two to be decided as their goal for achieving the set-asides. I think it's important for accountability and achieving results that we have these things.

For everyone here, Mr. Metatawabin, you mention how we're qualifying indigenous businesses. It's always a question of whether we are better off with a contract going to a non-indigenous-owned company that employs a very large number of indigenous people or whether the set-aside is for an indigenous-owned business that does not perhaps employ a large number of indigenous people. What delivers the best results for the community, and where do you see the balance between those?

6:05 p.m.

Chief Executive Officer, National Aboriginal Capital Corporations Association

Shannin Metatawabin

A big problem with procurement over the past 25 years is that only $1.6 billion has been allocated to all indigenous procurement opportunities—

6:05 p.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

Agreed.

6:05 p.m.

Chief Executive Officer, National Aboriginal Capital Corporations Association

Shannin Metatawabin

—and that's only 0.8% of all opportunities. We need to make wholesale changes. Australia has shown that they had a target, and then they increased it fourfold. Saskatchewan has done it, but it's only because there's a will. If there's a will, then there's a way.

The only way you're going to make a difference is for those frontline managers to be able to select an indigenous person. If there are hard targets and consequences for not meeting those targets, it will happen.

What you're talking about is how we can find the right mix in the types of businesses. I think that what Australia has shown is that if there is an opportunity, indigenous people will respond with the right businesses, respond with the right employee breakdown and invest in the assets. We did this 20 years ago. They invested a lot, and nothing resulted from it. A lot of them just stuck to the mainstream. I'm looking for a real change.

6:05 p.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

Mr. Ducharme, do you have a comment on that, or Mr. Sinclair or Ms. Suitor?

6:05 p.m.

Director, Innovation and Entrepreneurship, Canadian Council for Aboriginal Business

Philip Ducharme

I agree with what Shannin said.

We look at the businesses as well, and we are trying to ensure that the businesses are going to be the 51% owned and controlled. What has been an issue in the past is that the government told us what an indigenous business is. They said that to qualify as an indigenous business, they have to meet that extra requirement.

To my knowledge, for any of the other other programming that the federal government has regarding social procurement, it's only the ownership and control. There is no requirement to have your workforce be the stakeholder group that is being recognized.

I do think that indigenous businesses.... There is research that shows that we do hire our own people and that we do increase the capacity within our communities as well by hiring. I think that's what needs to be done. It also needs to have a target set, and there have to be some teeth to it. A mandate is great, but unless it's incentivized, it's going to be a hard sell to get it to happen.