Evidence of meeting #148 for Government Operations and Estimates in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was businesses.
A video is available from Parliament.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you, Mr. Chair.
Welcome to the officials. Thank you for the work you're doing, and thank you for your testimony today.
Once again, Madam Wilson, congratulations on the shout-out.
Madam Wilson, in a number of your responses to other questions, you said that you would like to be able to create awareness of, promote and advocate for the indigenous participation plans. That came about as a result of your trying to respond to other questions.
I'll give you the time that you want to be able to talk about the indigenous participation plan, but I would like you to talk about it through the lens that we heard it through from others at our committee when we were doing this study, especially the Plato president. It's the fact that the process is very cumbersome. It's very cumbersome, especially for the small indigenous organizations. If you're trying to help them get more businesses, what are we doing? Does this indigenous participation plan have anything to do with building capacity, making it easier and also helping them generate awareness of the opportunities that exist? Is your department moving in any of those directions?
The floor is yours, ma'am.
October 24th, 2024 / 12:25 p.m.
Deputy Minister, Department of Indigenous Services
With regard to the last point, I'd like to give Jessica an opportunity to talk a bit about the indigenous participation plans, which are a best practice in departments. They're not a standardized mandatory practice, but they're one that is picking up some good virtues.
Director General, Economic Policy Development, Department of Indigenous Services
Thank you.
While the 33% content requirement focuses on the value of the dollars in the contract, an indigenous participation plan can be used to require different types of deliverables under the contract. For example, indigenous participation plans, IPPs, can be used to give specific requirements around, for example, indigenous employment in terms of the life of the contract. It could also include requirements for training. It's a tool that can be used in order.... It's a way to ensure that the benefits go to indigenous businesses and indigenous people as intended.
As Ms. Wilson mentioned, this is a best practice at this point, as opposed to being mandatory. There is an exception to that, and that is in the Nunavut land claim area. It is mandatory to use an indigenous benefit plan, which is a synonym for indigenous participation plan in procurements in that land claim area.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you. If that was working, if that was enacted before, Dalian wouldn't have been in the position to benefit from hundreds of millions of dollars and to not invest a penny of it in hiring indigenous employees or working with smaller indigenous businesses to help them build capacity. Those are the points that I raised specifically to the CEO when he was here. I told him that they basically got $175 million, and I asked him how many indigenous people they hired. How many did they train? How many indigenous small organizations did they hire? How did they help their community, which they so proudly represent, build the capacity that's needed?
I have about a minute and 15 seconds, so I'd like to go back to the audit. You mentioned that we have pre, post and discretionary audits. Are these audits that are regularly conducted? I know we've asked for a list to come, and we'll get it. I understand pre, and I understand post. Can you tell me if there is a procedure whereby you say that if there is a threshold of this, then we will go and audit? How are audits triggered, whether it's post, pre or discretionary?
Director General, Economic Policy Development, Department of Indigenous Services
For a pre-award audit, it's automatically triggered if the contract is over $2 million. Otherwise, it can be triggered voluntarily, but it's the $2-million threshold.
A post-award audit is at the request of the contracting authority, of the client department or of ISC, which would be quite rare, as we don't have oversight of the contract during the administration or the life of the contract.
A discretionary audit would similarly be requested by the client department or the contracting authority if there was rationale or reason to consider that it might be useful.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
It's always triggered by the other side, and not by the department.
Director General, Economic Policy Development, Department of Indigenous Services
In any situation, I'll say discretionary.... Actually, in any of them—pre, post or discretionary—it could be the client department, the contracting authority or Indigenous Services Canada that could ask for it.
Conservative
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
Thank you very much, Mr. Chair.
As I told you earlier, we received lists from each organization and each department, indicating which companies received contracts and for what amounts. We received all that information, and I compiled it. I'm now checking to see if there was an error in the lists, if some companies shouldn't have been on them because they're non-indigenous.
I'm using your directory as well as other first nations' directories.
How is it that I can find a business in your directory, but cannot find it in any other directory?
Director General, Economic Policy Development, Department of Indigenous Services
I think the simplest answer to that question is that the business can choose to register where it wishes. If the business chooses to register on the IBD and not on any other list, that would be its choice.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
Furthermore, when I look through your directory, I see that some records indicate the date the company was created, while others do not. Some records show the number of employees, while others do not. There is no file that tells me which criteria a company is complying with. Perhaps it's the teacher in me that notices these details, because work methodology is a subject I taught.
Is it normal that there would be so many discrepancies when I try to analyze each item on the list?
Director General, Economic Policy Development, Department of Indigenous Services
Thank you for that question. I understand completely what you're saying.
I would have to go back and take a look, because there are all those fields that are available. However, you're right. They're not populated for every business in the same way.
With regard to your specific example about the number of employees, I expect that it's probably a holdover or the result of the fact that we used to require a specific number of employees so that we could go through. However, there's not a specific reason that I can state to you that it is the case. That's something I will take a look at to ensure more conformity.
Conservative
NDP
Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC
Thank you, Mr. Chair.
Last August, the First Nations University of Canada and Global News did a joint study on indigenous procurement. It pointed out that, for 25 years, leaders of indigenous organizations have been warning your services and federal officials about shell companies that take advantage of the strategy. For example, non-indigenous businesses would pay a person identified as indigenous to impersonate their owner or use an indigenous business as a front to access the strategy and thus secure contracts.
First, have you witnessed this phenomenon? Second, does it happen often?
Deputy Minister, Department of Indigenous Services
I'm not familiar with that specific study, but I know the First Nations University has done some very good work in this area.
Some of the work I've seen myself, as an Algonquin and a grandmother.... I know full well that non-indigenous individuals falsely claiming indigenous identity for personal or professional gain is just plain wrong. As you have likely heard, it's a very contentious and complex issue. The PSIB strategy—like other government policies and programs, the public sector, the private sector, academia, the arts, the research community and even the prison system—is not immune to this issue. In fact, we're very alive to it and taking important steps to address it.
Perhaps we can get a moment to explain some of those steps.
NDP
Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC
Yes, please.
What have you implemented to prevent this phenomenon of fronting, which is a form of fraud?
Deputy Minister, Department of Indigenous Services
As Ms. Sultan and Mr. Conn said earlier, there were policy reforms. For example, the transfer of the definition, audits,
discussions about removing set-asides, looking at things like limited bidding or even replacing the 33% content requirement with a best practice like indigenous participation plans.... These are the exact kinds of discussions we're having with partners at the table we told you about. There are a number of very solid changes that could come about as a result of that.
Conservative
The Chair Conservative Kelly McCauley
Thank you very much, both of you.
It's back to you, Mrs. Block.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Thank you, Chair.
Mr. Conn, there has been some contrasting testimony around Dalian today.
You stated that Dalian changed their corporate structure, which meant they ran afoul of the 51% indigenous-owned requirement. However, Ms. Wilson stated earlier that Dalian was still considered an indigenous business and is still on the list.
Is Dalian still considered an indigenous business, despite not being 51% indigenous-owned? Can you provide the committee with a list of other criteria that would cause a business to be removed from the list?
Assistant Deputy Minister, Lands and Economic Development, Department of Indigenous Services
They are removed from the list. They're no longer part of the list. As we indicated earlier, both Dalian and Coradix are still part of an ongoing audit, so we'll see what that outcome is all about. It's possible they're in violation of the policy itself, overall. We won't know until the audit is completed.
They are not on the list. We removed them from the list because of a change in governance at that company. They don't meet the eligibility criteria of PSIB. I'll supplement—
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Okay.
I will again submit that this is very different from what we heard earlier.
Can you please provide the committee with a list of other criteria that would cause a company to be removed from the list?
Assistant Deputy Minister, Lands and Economic Development, Department of Indigenous Services
Yes, we will do that in writing.