Thank you.
Mr. Chair, thank you for inviting representatives of Public Services and Procurement Canada, or PSPC, and its office of supplier integrity and compliance to discuss this important study on indigenous procurement.
With me today are Catherine Poulin, assistant deputy minister of the departmental oversight branch; and David Naus, director general responsible for integrity and forensic accounting services, also in the departmental oversight branch.
I would like to begin by acknowledging that the land on which we gather is the traditional unceded territory of the Algonquin Anishinabeg people. The Algonquin peoples have lived on this land since time immemorial. We are grateful to have the opportunity to be present in this territory.
The Government of Canada's procurement strategy for indigenous business has been an important indigenous business development tool for many years. It focuses on encouraging the participation of indigenous businesses in federal procurement through mandatory, voluntary and conditional set-asides.
More recently, the Government of Canada has established the target of 5% of the total value of federal contracts awarded to indigenous businesses to direct its purchasing power in support of indigenous businesses. PSPC is working with Indigenous Services Canada, as well as with the Treasury Board of Canada Secretariat to support departments and agencies to meet the minimum target of 5%.
As a department, PSPC is also working to ensure that 5% of our purchases are directed towards indigenous businesses. Last year, we did not meet this target. In part, that was because a large part of our contracts are awarded for large-value, complex endeavours, where it is simply not possible to find indigenous prime contractors.
Instead, our large contracts are making a difference by ensuring that subcontracting and employment opportunities benefit indigenous businesses and individuals, which aren't always reflected in the numbers. The inclusion of the participation plans and contracts is driving these economic benefits through subcontracting.
We continue to look at ways to increase indigenous prime contracts. We have introduced indigenous-by-default approaches where indigenous participation must be considered in all procurements. As well, PSPC has introduced limited bidding in certain cases to allow for a procurement to be accessible solely by indigenous businesses.
Mr. Chair, we share this committee’s concern regarding the potential deliberate misrepresentation of indigeneity on the part of government suppliers. Indigenous Services Canada is the lead department for the Government of Canada’s procurement strategy for indigenous businesses. ISC is also responsible for defining the criteria for eligible indigenous businesses, administering the verification processes of a business’s ability to meet the eligibility requirements, and maintaining the government’s indigenous business directory.
As with other departments, PSPC relies on the indigenous business directory to provide assurance that we are contracting with verified indigenous businesses. I will note that Indigenous Services Canada is currently working with their partners to develop a path forward for transferring the verification process to indigenous groups.
Mr. Chair, the government has taken two important steps to safeguard the integrity of the federal procurement system and to take action to protect Canada from suppliers of concern. First, it has created the Office of Supplier Integrity and Compliance, or OSIC, to enhance PSPC’s capacity to identify and respond to instances of supplier misconduct and wrongdoing.
Second, it has introduced the new ineligibility and suspension policy to provide OSIC with a range of actions, including suspension and debarment, on a much broader scope of misconduct. To be clear, these changes enable the registrar of ineligibility and suspension to suspend and debar suppliers based on an assessment that shows they have violated the integrity of the procurement process, even in situations where there are no criminal charges or convictions.
We encourage departments and agencies to come forward with their concerns about potential wrongdoing and misconduct. Even if departments do not report issues, OSIC can self-initiate assessments if they become aware of issues.
With regard to indigenous procurement, I can tell you that PSPC is actively engaging Indigenous Services Canada to ensure that deliberate misrepresentation or false claims of indigeneity are referred to OSIC for consideration. Since its inception earlier this year, OSIC has already taken action against a number of bad actors and continues to step up the government's efforts to root out suppliers of concern.
In closing, Mr. Chair, the Government of Canada buys some $37 billion worth of goods and services each year. Directing 5% of these purchases to indigenous businesses can have a significant positive impact on indigenous business development. PSPC will continue to use the government's buying power to help address the inequities that exist between indigenous and non-indigenous businesses. At the same time, we are equally committed to safeguarding the integrity of Canada's federal procurement system.
Thank you.
