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.
Deputy Minister, Department of Indigenous Services
Okay, I got it.
We no longer have Dalian or companies in joint venture with Dalian in the indigenous business directory, and we do not have any contracts with Dalian or Coradix. They were suspended on March 12 from the indigenous business directory due to questionable factors being raised in the media and here in committee sessions. In fact, PSPC announced their suspension more broadly around the same time.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
Thank you.
Would you be able to indicate if Mr. David Yeo was involved in the designing of the program itself?
Director General, Economic Policy Development, Department of Indigenous Services
We are not able to confirm that fact. I do understand that there was information provided by Mr. Yeo. I can confirm, however, that when the PSAB, as it was known at the time, was put in place, there was extensive consultation with many stakeholders. It's possible that Mr. Yeo, as a business owner, could have been one of them.
Conservative
October 24th, 2024 / 11:30 a.m.
Liberal
Jenica Atwin Liberal Fredericton, NB
Thank you very much, Mr. Chair.
Thank you very much to our witnesses for being with us today.
Right off the top, how does Indigenous Services Canada verify the eligibility of indigenous businesses in the directory? Can you walk us through that process?
Deputy Minister, Department of Indigenous Services
I just want to be really clear. It's a bit complicated, and I want to read it clearly.
At this time, to be eligible for a PSAB contract, an indigenous business must be “51% owned and controlled” by indigenous people and must demonstrate an ability to make sure that “33% of the total value of work performed...is performed by the Indigenous business” or by subcontractors that also meet that 51% ownership and control criterion throughout the life of the contract.
I want to add as well that the 33% requirement does not mean that 33% of the business's employees must be indigenous. There's no requirement for that. That was a condition that existed a number of years ago, but on the advice of indigenous partners in 2018 and 2019, the government removed that requirement for employees because it created a barrier for some indigenous-owned and controlled businesses.
Liberal
Jenica Atwin Liberal Fredericton, NB
Thank you.
How does Indigenous Services Canada work with first nations, Inuit and Métis partners to assess if a business is eligible for the indigenous business directory?
Director General, Economic Policy Development, Department of Indigenous Services
When a business applies to be in the indigenous business directory, or IBD, there are two pieces of information that need to be provided. One is proof of indigeneity, and the other is proof of minimum 51% indigenous ownership and control.
When Indigenous Services Canada receives documentation regarding proof of indigeneity, if the person has provided a status card, that would be verified by the government itself with the Indian register.
In other cases—for example, if there are identity cards from the MNA or MMF—we would go directly to the organization itself and verify that the organization recognizes the individual as a member. That's the way we confirm that the indigeneity documentation is valid.
Liberal
Jenica Atwin Liberal Fredericton, NB
Has this process evolved over time? Are you taking measures to strengthen those processes?
Director General, Economic Policy Development, Department of Indigenous Services
Absolutely. That, for example, is one way in which we have strengthened the process, by creating those relationships and maintaining those relationships with the organizations or nations themselves, so indigenous people are, in fact, confirming who is part of their community.
Liberal
Jenica Atwin Liberal Fredericton, NB
Does Indigenous Services Canada have any role in validating or assessing the use of subcontractors for other departments?
Director General, Economic Policy Development, Department of Indigenous Services
As has been testified at this committee, the government doesn't have a relationship with subcontractors; we have a relationship with the prime one.
That said, I think the question probably relates to the 33% requirement and subcontractors in that context. There are mechanisms by which the government does verify compliance with the 33%, including with subcontractors. I'd be happy to speak to that if that's of interest.
Director General, Economic Policy Development, Department of Indigenous Services
In order to ensure that there is compliance throughout the contracting process, first there is a certification by the vendor that they will meet the 33% requirement.
Second, that is put into the terms and conditions of the contract, and those terms and conditions have to flow from the prime to the subcontractors. That requirement is also in the subcontracted contracts.
Third, it's the responsibility of the client department or the department that's receiving the good or service to verify throughout the life of the contract that the compliance to the 33% value criteria is met.
Finally, there's an audit option, and that would be a discretionary audit that could be requested, if required, at any time. As well, a post-award audit could be requested as a final way to verify compliance, should there be concerns at the termination of the contract that the 33% may not have been met.
Liberal
Jenica Atwin Liberal Fredericton, NB
Thank you very much.
From your understanding, if it came to light that a supplier did not meet that provision, would it be considered a breach of contract?
Director General, Economic Policy Development, Department of Indigenous Services
Yes, absolutely.
Liberal
Jenica Atwin Liberal Fredericton, NB
I know that Minister Hajdu has said she's working to transfer that verification of indigenous businesses away from the federal government. Can you confirm that your department is working on that?
Director General, Economic Policy Development, Department of Indigenous Services
Would you like to take that one?
Keith Conn Assistant Deputy Minister, Lands and Economic Development, Department of Indigenous Services
Yes, I can confirm that we are working with partners to look at options around the transference of the verification process. It has been an ongoing discussion at our partnership table with a number of indigenous organizations. The concept is there and the desire is there, but it's how we clarify the mechanism and the process to ensure that it's transferred in a good way, if you will.
Liberal
Assistant Deputy Minister, Lands and Economic Development, Department of Indigenous Services
They are going positively, I think, and Jessica can speak to that. She has direct engagement with the partners, as do I on occasion.
Conservative
Director General, Economic Policy Development, Department of Indigenous Services
I would say they're going well. There is lots of varied input and there are varied positions, but one thing that remains constant is the desire for indigenous people to verify indigenous businesses.
