Government Operations Committee on Sept. 24th, 2024

[Philip Ducharme]

It is a very significant one.

Again, I think that where sometimes joint ventures have had to come into play, it's because the indigenous business or the indigenous community was not able to get the bid bonding or was not able to get the insurance. They would have to get that through their joint venture partner.

Again, it is a real struggle for indigenous businesses. I have a great friend who has a business, but she's actually had to store her equipment off reserve to be able to get financing to purchase that equipment.

It is something the Indian Act.... For full disclosure, I am not completely familiar with the Indian Act. I really work on procurement. A lot of these things are different with it. That act has been a challenge for our indigenous businesses.

When we talk about the challenges, we do want to hear the challenges. We have been fortunate: We have lobbied the federal government a lot for certain changes, and changes have been made.

Indigenous businesses have always been held to a higher standard than any other group. When you look at social procurement or supplier diversity, you see that we have had more regulations and rules placed on us to identify as an indigenous business than other groups have had.

We want to look at those challenges, like removing the 33% employment requirement. Chief Bernard's brother, John Bernard, was one of the biggest advocates of that, because within the growth of his business, he was not able to maintain a 33% workforce in the technology field, which is very specialized. I think removing that barrier helps our indigenous businesses.

It is good to find out about the barriers and the challenges, but successes need to be highlighted as well.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much.

[The Chair, Conservative, Kelly McCauley]

Mr. Bachrach, go ahead, please.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Mr. Ducharme, in a previous response speaking about your organization's directory of indigenous businesses, you compared the federal government's approach to its directory, which is solely about proving indigeneity, to your organization's more comprehensive approach, which includes not only indigenous identity but also other factors.

Is this a fair characterization?

[Philip Ducharme]

To be included on the indigenous business directory, the directory does ask that you supply more than just proof of indigeneity. You have to supply the documentation to prove that the ownership and control meet the 51% criteria to be classified as an indigenous business.

Maybe you just attest to that without actually providing the documentation; I don't know. I don't do the certification for the federal government, but we do require that documentation—

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

My question was just about the distinction or the difference between your organization's directory and Indigenous Services Canada's list.

It sounded like your organization was utilizing a more comprehensive approach to certifying indigenous business than that of the federal government. Perhaps I'm wrong. That was my impression, just based on previous remarks.

[Philip Ducharme]

If you actually went into the indigenous business directory and looked at the requirement for being included, I think you'd see that the documentation is required.

It's not just saying that you're indigenous; you still have to prove that there's an actual business and that you're the owner of that business, so there is documentation.

We require also that 51% ownership and control is held by the indigenous individual or individuals.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

To both of our witnesses, we have the ability to make recommendations to the federal government to improve this indigenous procurement process and program. If you could make one recommendation to the government that would improve the current approach, what would it be?

We'll start with Mr. Ducharme and then we'll go to Chief Bernard.

[The Chair, Conservative, Kelly McCauley]

Answer briefly, because we're almost out of time.

[Philip Ducharme]

I think the one recommendation is to work with indigenous peoples and the businesses, give them the opportunities and see what the challenges are for indigenous businesses to be able to do it.

As well, you have to simplify the process for the federal government's contracting requirements.

[Joanna Bernard]

Since the first meeting in December 2023, the FNPO, which is the First Nations Procurement Organization, has formed a steering committee of six indigenous organizations, including the AFN.

I'm looking to secure some funding to ensure the work that is being done there alongside the Canadian government to be part of this.... It's so they can get full-blown information right from the organizations on how to make this a better process.

Can I say one thing?

Being aboriginal is not a skill, yet for aboriginal procurement with joint ventures, it's almost like that. If you're aboriginal, then all of a sudden that's a qualification you bring to a joint venture.

We don't agree with this. Obviously, you have to start somewhere. That should be small. We believe that the aboriginal side of the joint venture should progress, and it doesn't seem to be doing that. We do joint ventures, but there's no initiative for the first nation portion of that joint venture to grow. There's some work to be done there, as well as everything else that was discussed today.

I'm really looking to see if we can secure the funding to move forward and work with the Canadian government on this strategy.

Thank you.

[Jaime Battiste, Liberal, Sydney—Victoria, NS]

Can you give us that acronym again? What does FNPO mean? I know you talked about the five organizations who are working—

[Joanna Bernard]

Yes, there are six indigenous organizations, including AFN. FNPO is the First Nations Procurement Organization.

Our very first meeting was in December 2023. We have all come together looking for ways to strengthen the strategy so we can all be satisfied with moving forward, and if there's a need for changes, we can look at that and work together.

I just can't stand the fact that the government does this. They go behind closed doors. They think they know the best way to serve us when we're not even at the table. That has to stop. I said this to the Prime Minister himself when I was national chief. It's not only on this issue; it's on everything across the board.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

We'll go to Mrs. Block, please.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you, Chair.

Thank you again for your testimony.

As my colleague mentioned, this is part of a much bigger study on a broken procurement system under this Liberal government. One of the issues we have found in procurement across government is the use of middlemen: companies that subcontract all of the work and do none of it themselves, but take a 15% to 30% cut of any project.

My question is for both of you. Do you support the Auditor General launching an audit into fraud in indigenous procurement?

[Joanna Bernard]

I do.

[Philip Ducharme]

Yes. Again, if there's just cause for them to investigate, I think it's very relevant. That would probably dissuade others if there are repercussions from it.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

I will now turn the rest of my time over to Mrs. Kusie.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much.

In my previous line of questioning, I was talking about the subcontracting, but I'm also interested in the business structure, which is most beneficial.

In your opinion, Mr. Ducharme, should the government seek indigenous involvement throughout the business structure and not just the ownership to ensure that it is truly indigenous people who receive the benefits of the set-aside?

[Philip Ducharme]

Are you talking about employees within the organization? When you say “structure”, I'm not sure what you're referring to.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

That's correct.

There has been a focus on the ownership, as opposed to the employees. In my opinion, this would be a benefit of doing an overview of the subcontracting process and the structure within the process.

To get your opinion as well, do you think the government should seek indigenous involvement throughout the business structure and not just the ownership itself?

[Philip Ducharme]

Again, we're going to be held to different standards than other people.

As indigenous people, we are going to hire our own people, and our stats do show that this is what's happening. Indigenous businesses hire indigenous people, but a woman-owned business or a minority-owned business does not have that requirement.

That was a requirement that was always done. I feel that as indigenous people, we're always held to a higher standard than other groups within Canada, and I find it almost offensive and racist that in some ways, we have to prove more. We have to be different from any other group in that more is expected of us and more burden is placed on us to be able to succeed and grow our businesses.

[Joanna Bernard]

May I respond to that question?

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Yes, please go ahead.

[Joanna Bernard]

It was mentioned that indigenous entrepreneurs and businesses have to hire so many indigenous people. That could lead to the demise of any organization or business. John Bernard from Donna Cona had an issue with this back in 2006 when he spoke to the standing committee.

The problem with that is that if there are no qualified indigenous people to do that work, then we are cut off. No indigenous company or non-native company would hire people just for the sake of them being indigenous or not. It could lead to the demise of that company.

I don't think that insisting that a percentage of indigenous people be hired should really be implemented in here. We always try our best, as indigenous companies, to hire indigenous people, but if we can't, then we are cut off from the bidding process, and that's just not correct.

There's definitely more work to be done there. I do agree with the other witness that it shouldn't be an issue, but the ownership at 51%-plus should definitely be, along with proving that they are the owner and that they are getting those benefits. It's important.