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.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Thanks, Mr. Chair. It's five, not two and a half.
Mr. Ducharme, I think it was you who mentioned that one of the businesses you dealt with had the capability to provide masks and had bid on some of the COVID business.
I'm sorry. Was it you who brought that up?
Chief Executive Officer, National Aboriginal Capital Corporations Association
That would be me.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Yes. Did you ever receive any feedback on why a business like that did not get the contract, or similar businesses? Was it price, or was there just no response?
Chief Executive Officer, National Aboriginal Capital Corporations Association
They basically said that it was national security confidentiality. They weren't able to provide any feedback to the business owner, other than to say that they weren't eligible. This was even though they had invested in a facility to be built on a first nation, hired first nation people, and invested quite heavily in the equipment, thinking that the procurement process would work. There were no indicators within the process to select for any social impacts to say that somebody would score higher for being on a first nation, hiring first nations, impacting first nations—
Conservative
Chief Executive Officer, National Aboriginal Capital Corporations Association
Yes, they did.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Good lord. That's garbage. I'm sorry. We see this again and again when, in order to sole-source something to a preferred vendor or someone they want, it's national security. I highly doubt there's a national security issue—and I think you would agree with me—in buying masks and supporting an indigenous business.
I'm wondering if there's any low-hanging fruit here. It's probably very obvious, but for the record, is there any low-hanging fruit or any quick changes the government can make to better help indigenous businesses procure government contracts? We talked about the insurance one. We could change that, because we heard this before—three years ago—but I'm wondering what other low-hanging fruit the government could make immediate changes on.
Director, Innovation and Entrepreneurship, Canadian Council for Aboriginal Business
I think it would be regarding the RFPs and scaling the RFPs to the amount of work that's done if you want to include more of the small businesses. To respond to an RFP with the federal government, you almost need a full-time employee who's a proposal writer. I think if that were geared to the size of the contract, that would increase opportunities for the smaller indigenous businesses.
Conservative
Kelly McCauley Conservative Edmonton West, AB
This was a theme that came up repeatedly when we did the same study three and a half years ago. Unfortunately, nothing has changed since then. Whether it's women-led business, indigenous-led business or other SMEs, what we hear is that for Amazon for their HQ2 it's an eight-page RFP, whereas for them it's 100 pages for a roll of toilet paper. It's silly.
Is there anything else in terms of low-hanging fruit? Obviously, scalability is one. Is there anything else we could implement relatively painlessly and quickly, if there is such a thing within government?
Director, Innovation and Entrepreneurship, Canadian Council for Aboriginal Business
I think it's the company that Shannin was talking about. I mean, that company invested their own money in it. They got no funding from the government to help them start this manufacturing plant. They brought the cost of their stuff down to 10¢ or 12¢ per mask. You might be able to get it from a foreign company for 6¢ to 7¢, but when you look at it, you're spending that 10¢ to 12¢ per mask here in Canada, which in turn is hiring indigenous people. That money is staying in Canada instead of going outside it.
I think that would be a really quick one. I would look at that company right now. They have 20 million masks sitting, because within that RFP they had to guarantee that if the government came to look at their warehouse, they would have that in stock.
Conservative
Conservative
Conservative
Kelly McCauley Conservative Edmonton West, AB
Ms. Suitor, I'm going to bounce back to you, please. You've dealt with energy businesses a lot. Again, on a previous study, we heard repeatedly how the energy companies—Suncor, etc.—were setting a very high bar for indigenous participation and were achieving it.
Can you give us some examples of what they're doing right that perhaps the government should make steps to copy, when they're not trying to shut down the oil business?
Director, Aksis Edmonton Aboriginal Business and Professional Association
The one that is very obvious to me is that within many of those resource companies, there has been an indigenous inclusion evaluation criterion within all the RFP responses. It's not about a set-aside per se, but it's about anyone responding to an RFP being able to prove that they have an indigenous inclusion policy and that it is being followed through.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Is there any reason the government couldn't copy that?
Director, Aksis Edmonton Aboriginal Business and Professional Association
That would be my wish or my suggestion. Why wouldn't we have indigenous inclusion throughout the country and throughout all of the procurement process? It could be scored somewhere in the criteria, with back-up documentation to prove it.
Conservative
The Chair Conservative Robert Gordon Kitchen
Thank you, Mr. McCauley. Thank you, Ms. Suitor.
We will now go to Mr. Weiler for five minutes.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
Thank you, Mr. Chair.
My first question, through you, is to Mr. Ducharme.
You mentioned in your introductory remarks that you were leading different training seminars with OSME. I'm wondering if you've been able to track the effectiveness of those training sessions in terms of if and how they led to more success through the procurement process with some of the businesses that were involved.
Director, Innovation and Entrepreneurship, Canadian Council for Aboriginal Business
We haven't done an evaluation on the successes of them, but we have had businesses that have said that they are applying. Again, some of these contracts take a long time. When we looked at the masks last year, it took, I think, two and a half to three months for it to be awarded. There are changes. I think the indigenous businesses are looking at the RFPs differently.
Mind you, you guys also make changes sometimes within the process. When the government went to the Ariba platform, we had done a training session on using Buyandsell, and everything was done. The first contract that the federal government did for the Ariba system was the indigenous-only business, and it was really hard for us to get in. Even the procurement officers at OSME were trying to go in to try to learn how to use the system.
I think what we've been trying to do is get them better equipped, and there have been more bids submitted, but we don't have the stats right now. We can find that out, though, and bring it back to you.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
Thank you.
I have a general question for your opinion.
What level of awareness do you believe the federal government has on indigenous-owned capacity in different areas for procurement? I am just wondering if you see a need for that—maybe a training thing on the other side for the government—just to have a better understanding of where there are opportunities to work more with indigenous-owned companies.
Director, Innovation and Entrepreneurship, Canadian Council for Aboriginal Business
I don't believe that a lot of the procurement officers do know the indigenous capacity that's out there. We did research on it when we were talking about 5% indigenous businesses that have the capacity to procure up to 24% of federal contracts. Most of these departments are not looking past.... There are certain requirements. Again, I don't want to comment on what the procurement managers are doing, but I think there is opportunity if they looked at it.
Again, when I went back to Defence Construction Canada, they were looking to see if that business—they might not see it right there—has the capacity, and they were exploring to see if that is happening.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
Thank you.
One thing I want to touch on is outcomes-based procurement.
I understand there have been a few programs that the federal government has launched in this respect, including Innovative Solutions Canada, which was putting forward challenges designed to find novel solutions for products or services that weren't necessarily commercially available at the time. Treasury Board and PSPC had launched an agile procurement initiative more towards solving a particular problem rather than through lengthy RFPs. I'm just curious about your thoughts on where there may be some opportunities to do more of this.
I'd like to open this up to all of the three organizations that are here as witnesses. Do you see an opportunity to do more of that to engage indigenous-owned businesses in federal procurement?
Chief Executive Officer, National Aboriginal Capital Corporations Association
I'd like to use an example that we heard about. Last summer, or maybe it was the fall before COVID hit, the defence department let out a 10-year clothing contract. This one would have been an ideal indigenous contract. It would have probably encapsulated a number of communities to be able to meet the needs of this procurement, if there had been some forward thinking, some planning, some will, and if we had a process in place to let us know that this was coming out. We know the defence department needs clothes. We know that it's coming out. We just need to know when it's going to be coming out so that we can work with our entrepreneurs to consolidate and coordinate a response and submit a bid.
I think this is what's lacking. The RFP just comes out, and you're expected to respond. In the indigenous case, they had already put in the effort and they saw nothing for it. For them being ready for these things, the trust has left the station. I think we need to build up that trust again, create an institution, provide the financing and business support services, and change the internal culture of the government in selecting indigenous businesses.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
Thank you.
Mr. Chair, how long do I have left?