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.