Government Operations Committee on Sept. 24th, 2024

[Philip Ducharme]

I don't know the process that the government uses.

When you go online and look at the government process to be registered as an indigenous business, it does say you have to include the proof of indigeneity and the documentation to show it. That would be very similar.

We followed some of the guidelines to look at that. We also looked at the U.S., where supplier diversity is a component of that. The documentation to prove the 51% has been happening since 1968.

On the government list, I'm not in the back end of the government, so I don't do their certification. I'm quite confident in what we do for certification. It was something that our corporate members also wanted to ensure. We did a survey in 2016, and 72% wanted to ensure that if they were working with an indigenous business, it was a bona fide indigenous business and not someone claiming indigeneity just to take advantage of programming.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Have you, in any way, had an opportunity to even cross-reference or have that consultation process with the government side on lists? Is there a consultation process that you're working on consistently with the government?

[Philip Ducharme]

We do work a lot with the federal government. A lot of the stuff I can't speak to, but I know the one they're talking about is with regard to the bunny. I think there is some context that hasn't been brought forward on that one.

It was a tribal council that owned the business. That was my understanding. In some programs, you have to upload a document. Maybe the documentation showed that this company was owned by the Pasqua First Nation tribal council, but the programming required a picture of a status card or a picture of a Métis citizenship card to be uploaded. It's possible that a person said, “You know what? Just upload a picture of a bunny. Something has to go in there to be able to make that system go.”

For so many things, people jump to conclusions and make it worse than what it is. We don't know the full extent of what that certification process was. I wouldn't want to throw someone under the bus and say that they're not doing it right, because they are trying their best. Even having these discussions is showing that it is something that's valid and that we want to make sure it's going to be successful.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

I'm going to ask a little bit about the indigenous business supply chain. Is it generally possible to find and use indigenous businesses throughout the supply chain? How hard is that process?

When we talked about a target of 5%, that's just a minimum, right? That's just something to get to. I saw that in 2022-23 the number indicating the percentage of contracts going to indigenous businesses had gone up to 6.26%. It was exceeding 5%. It's not that we're just trying to get to 5%; it's about getting more. Sometimes there might not be that many businesses, but are we able to find businesses all through the supply chain?

[Philip Ducharme]

They say there are up to—

[The Chair, Conservative, Kelly McCauley]

I'm afraid there's no time left for a response.

We'll go to Mrs. Vignola, please, for two and a half minutes.

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

Thank you very much, Mr. Chair.

I'm listening to you and I keep taking notes, because I have so many questions for you. I'll be quick.

I will address Ms. Bernard, but Mr. Ducharme can also add his comments.

Between the communities and the federal government, who is in the best position to determine whether an indigenous person, Métis or Inuit is an indigenous person, Métis or Inuit?

[Joanna Bernard]

At this time, the federal government is telling us as first nations whether we're status or not. It's not doing that on the other side, whether it's Métis or Inuit. They're doing it on their own. They don't have the government doing the second generation cut-off like the government does for us as first nations, so there's a concern I have there.

If the government wishes to—

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

I have to stop you there. I'm very sorry about that.

I understand that it is currently the federal government that does that.

Is it up to the government or the nations and communities to do this?

[Joanna Bernard]

I truly believe it should be the first nation, but there's a process to that. Some first nations have their own registry and membership. I think they do with what is called a section 10 band. That allows them to have their own membership.

You have to work towards that for first nations to get to that point, but it doesn't matter, even if you have your own membership. For first nations, the government does not recognize us after the second generation, and that's where lies the problem. If the government were to step away from that and allow us to allow our descendants to be on there, we wouldn't have an issue with being Inuit or Métis. I personally have an issue when the government is controlling first nations, but not the membership of the other two organizations.

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

Thank you.

I have about 30 seconds left, so I'm going to take this opportunity to make a comment.

I don't understand why the Indian Act is still in effect in its current form, and that it's still the federal government that determines that a Métis, Inuit or indigenous person is a Métis, Inuit or indigenous person.

It isn't up to the federal government to determine that. You're not children or minors forever. Quite simply, it's high time that your communities were given back their autonomy and opportunity for growth.

[The Chair, Conservative, Kelly McCauley]

Thank you, Ms. Vignola.

We're back to you, Mr. Bachrach, sir.

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

Thank you, Mr. Chair.

Chief Bernard, you said something I found very interesting in one of the previous rounds of questions. It was about the benefit to the community. This is something that as a party we wholeheartedly support writ large, not just for indigenous procurement but for procurement in general. When governments spend millions or billions of dollars on infrastructure projects, for example, there should be benefits that go to communities. There should be apprentices, there should be women employed, there should be some legacy, and there should be local employment.

This is something I think that's very germane, and yet I've seen representatives of this federal government get up in the House and say that indigenous procurement is solely about the individuals receiving the contracts; it isn't about community.

Is this a gap? Is this something that your organization has brought up with the government as a shortcoming? I noticed quite a stark contrast between the comments of the government and the comments that you made before the committee just a moment ago.

[Joanna Bernard]

First nations are government. They're not in the business of doing business and they are not entrepreneurs; they are government. They do need as much help and in-house resources as they can get.

We're not the only department that is not funded sufficiently. Education across the board is not funded sufficiently, like anything else. The only way for us to get ahead of that is to have some in-house resources and revenues.

One way to do that is by looking at the local economy, setting up a scholarship to help our students get to school or helping build a park or a health centre. This is where benefits could go to the community.

There is a difference between indigenous entrepreneurs, who are not government and.... You don't want the government to be involved in this. I mean, if for some reason I'm an entrepreneur and I don't like the chief and the chief doesn't like me, I get nothing. This is why they never worked for fisheries and never worked for forestry. They gave the allocations to the community, and then the chief and council, who had no background in fisheries or forestry, made these decisions. This comes back full circle here. That's where we are today, and we need to look at ways that we can benefit the communities through aboriginal benefits, which would be a percentage to help with scholarships or anything within the region where that work is being done.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Next is Mrs. Block, please.

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

Thank you, Chair, and thank you to both Chief Bernard and Mr. Ducharme for joining us today.

My first question can go to either one of you.

In August 2021, the government made it mandatory to have each department award at least 5% of their total contract value to indigenous-owned businesses. It's my understanding that before 2021, there was a target, but it wasn't mandatory. Can either of you comment on the level of indigenous participation in federal contracting prior to this target being made mandatory?

[Philip Ducharme]

I think if you look at the numbers, you will see that they are quite a bit lower. They weren't there. I think it was showing maybe around 1% of it. I think it was first announced in 2019, when it was part of the mandate letter to look at setting a target of 5%. That was when we first started talking about the 5% indigenous procurement target.

It is still difficult for lots of businesses with the federal government and federal procurement. I think it needs to be simplified. I think we may need to look at some of the levels of requirements for their contracts. A $100,000 or $150,000 contract requires the same amount of work as a $10 million or $20 million one. Small indigenous businesses, and all smaller businesses in Canada, don't have the resources to do that. I think there are still some struggles.

Also, on some of these other big ones, when we look at the reporting from 2023, on paper it was 6.27% of the value that went to indigenous businesses. In reality, we did not get that.

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

Thank you very much. That's a great segue into my next question.

As you noted, it was reported that the value of government contracts awarded under the program has risen sharply, to $862 million in the 2022 fiscal year, which is up from $170 million in the five years prior to that. According to the 2022-2023 ISC report on the mandatory minimum 5% target, it was reported that 6.27% of all contracts were awarded to indigenous businesses. On the face of it, it would appear that the government has already exceeded the targets that they set for 2024-25. However, as we all know, the devil is often in the detail, which is why our committee undertook this study.

From bombshell reports over the summer, we know that this government has done little to no vetting of businesses to ensure they qualify as indigenous businesses, and my colleague has done a great job in digging into that. When we were passing this motion to study this program, we were told by government members that we didn't understand the purpose of this program and that it was running just fine and accomplishing the purpose for which it was created.

Are you concerned at all that the current government sees no issues with the abuse that has been uncovered, particularly the so-called Rent-a-Feather schemes or the lack of concern about verifying the indigenous identity of businesses before giving them access to the program?

I'll turn to Chief Ducharme.... I'm sorry; it's Chief Bernard.

[Joanna Bernard]

I want to note that those numbers have not been verified. The research that you did shows that it went to an indigenous company, but if you look deeper, you will find that this is not true when you go into each individual contract and who was part of it. Was it a shell company? Even though your reporting shows that it's indigenous, it may not have been. In reality, that so-called 6% is probably more like 1%.

I just don't understand. When the first aboriginal procurement strategy came out, it was 10%. There was no governing of it and nothing was done to enforce it, as was mentioned. In 2019, according to what I just heard, they started trying to enforce it, but as we know, the devil is in the details, and they weren't looking into the details to verify how much that indigenous company or person or entrepreneur actually received, because the majority of them—I hate to say this—are shell companies. It's important to go deeper to see that percentage.

To me, it would probably be more down in the 1% range. I'm not understanding how the government is now wanting to give 5% but couldn't even manage the 10%, so what's going to be different now?

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

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thanks.

It's back to you, Mr. Battiste.

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

Mr. Ducharme, I was really interested in the discussion you had about the uploading of the picture. I know many communities and many first nations across Canada also have corporate divisions within their communities. I know that Eskasoni, the community that I'm from, has an eagle that represents them corporately. I've seen others in the west use buffalo. In British Columbia, they use the orcas.

Is it possible that this narrative that the media and the Conservatives have spun about a bunny being used for verification was actually the government just asking for a picture representative of their community?

[Philip Ducharme]

I don't know if it was representative of their community. I have been to places, even some online platforms, where they just upload a blank document or something because the system requires something to be put in. Again, I'm just speculating. The business that was reported was a community-owned business. A community isn't going to have a status card on its own, so maybe that could have been why it was determined to just upload a picture to bypass the system so that they could actually go through the certification process.

Again, I'm speculating. I did not do the certification.

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

Regional Chief Bernard, do you believe that it's important to have a percentage of the procurement going to indigenous communities, first nations communities, Inuit and Métis communities? Do you see this as something that's valued in terms of the efforts made to decrease the gap of indigenous-owned businesses in Canada?

[Joanna Bernard]

I definitely think it's essential to help the communities and to help with poverty within communities. If there's a community entrepreneur making money, his money is being spent within his community, so it does benefit the community a bit.

In regard to the tribal councils, they are owned by the first nations. The first nation has a band number, so those so-called rabbit pictures don't make sense. You just show that you are from a community and what that community band number is. It's registered in Canada. Each community is registered with a number. That would be the way to do it, and not just as a tribal council, because they don't have an individual band number. There are ways that this can be done efficiently and properly to ensure these....

The phrase “tribal council” is one anybody could use. I'm assuming a tribal council consists of multiple—maybe at least three—first nations. They can use their band numbers for that community instead of a status number.