Government Operations Committee on Nov. 28th, 2024

[Dave Sergerie, Strategic Projects Coordinator, First Nations of Quebec and Labrador Economic Development Commission]

Yes, I am.

[The Chair, Conservative, Kelly McCauley]

Go ahead for five minutes, please, for your opening statement.

[Dave Sergerie]

Thank you very much. Kwe. Bonjour. Good day.

My name is Dave Sergerie. I am Anishinabe from Timiskaming First Nation.. I've been working for the Assembly of First Nations Quebec-Labrador for the past 23 years, and I'm currently the strategic projects coordinator for the AFNQL's Economic Development Commission in support of 43 first nation communities in Quebec. Thank you for having me here today.

In the next few minutes, I will quickly address a certain number of issues regarding indigenous procurement. Should you wish to further discuss any topics, my contact information is available on our website.

Indigenous businesses are primarily small to medium-sized, so a lot of them are active mainly in their local markets and have neither the interest nor the capacity to open up to the outside world, to canvass for contracts or to participate in calls for tenders. Please remember this opening statement when we come to address some of the constraints and solutions specific to indigenous procurement.

First, let's take a quick look at the reasons behind this tendency to have smaller businesses.

Indigenous people have a world view that is very much rooted in the present moment. They don't project much into the future, and the same is true for entrepreneurs. They want to be able to provide for their families, to create quality jobs and to provide essential services to local residents. Additionally, first nation entrepreneurs are faced with socio-economic realities and barriers that often prevent them from working 60 to 70 hours a week away from their families. All the ambition in the world cannot eliminate the harsh conditions faced by many community residents and entrepreneurs.

In terms of constraints and solutions, I will first address the capacity level.

Not all indigenous businesses have the capacity to carry out high-value contracts. The lack of human and financial resources makes it difficult even for experienced and competent business owners to comply with the heavy regulation constraints of certain activity sectors, such as construction. Furthermore, because First Nations businesses are smaller and face additional challenges, their tenders tend to be higher than those of non-indigenous businesses, thus preventing them from winning contracts.

On this last point, we recommend greater flexibility in the criteria for awarding contracts so as to put indigenous and non-indigenous businesses on a more equal footing. However, as a more general solution, we recommend that government buyers largely increase the use of low-value contracting, which, as you know, has an upper limit of $25,000 for goods and $40,000 for services. Because these contracts can be awarded without going through the tendering process, this approach has tremendous potential in the context of procurement from indigenous businesses.

By landing $25,000 contracts, businesses can continue to grow, can hire employees and can develop their expertise. Additionally, this type of lower-value contract allows them to familiarize themselves with the process of government contracting, and as they start to see the concrete benefits of it all, their confidence in the process and in government will naturally increase, thus setting a positive example for their peers.

Implementing this proposed solution presents its own difficulties. For one, low-value contracts can be less attractive from a government point of view, as they require a lot more work, on the whole, than larger-value contracts, while contributing less to the achievement of the 5% target. As a result, they might not be sufficiently valued and promoted within the procurement strategy for indigenous businesses.

In terms of attractiveness, the first aspect I want to talk about is the weight of history. Obviously, indigenous people have seen many government-led initiatives never materialize. A certain mistrust has set in with regard to governments in general.

The procurement process is also largely unknown to contractors. It is a complex process, in the eyes of many of them, that makes it difficult to qualify. Indigenous entrepreneurs need to be supported so that they can more easily navigate the procurement process. Restoring their confidence in the process and showing them concrete examples of contracts that have been awarded to indigenous businesses could convince entrepreneurs that the time is worth investing.

[The Chair, Conservative, Kelly McCauley]

I'm sorry. That is our five minutes. I have to cut you off there in order to get our rounds in.

We will be able to get the first round in before we have to vote, but I have to cut everyone off right at six minutes. Watch the clocks, please.

Mr. Genuis, go ahead, please, sir.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Mr. Chair.

First, Ms. Semaganis, thank you for coming here again, and thank you for exposing us to the human cost of this procurement abuse. Sometimes I think there is a temptation around here, when big numbers are thrown out, to just see the numbers, but we need to see the lost opportunity behind every misappropriation of funds. This is cultural appropriation leading to financial misappropriation, and that financial misappropriation has real consequences.

I wonder if you can share your reaction to the Randy Boissonnault affair, particularly what we can learn from what happened. What should we take from what took place and use, going forward?

[Crystal Semaganis]

I think the entire situation is indicative of what happens when you have absolutely no deterrence to claiming indigenous identity falsely. When you have absolutely no mechanisms in place to affirm these, you have exploitations. I find this to be an exploitation.

It is very common of the cases we research in our volunteer work, and we do this work with no resources. When you have high-placed people making false claims of first nations, Métis or Inuit identity, and they hold significant political power, it makes that exploitation exponentially harmful. It is a trauma for us to uncover these things, to see these things exposed in the media and to go back over that grift. What has this person been involved in? Where did they divert resources that should have gone to our people? Why is this allowed to happen? We need deterrents. We need frameworks too. We need dispute mechanisms in place for when we challenge a business.

We tried to research indigenous procurement. There is very little information, even when researching government databases, that can authenticate these businesses. There are walls everywhere for—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Can I ask a quick follow-up question?

You talked about deterrents and consequences. Do you think he should remain in the Liberal caucus or not?

[Crystal Semaganis]

No.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

I'm sorry. Could you say that one more time?

[Crystal Semaganis]

No, I don't think he should. That's a significant breach of trust—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Yes.

[Crystal Semaganis]

—and a misrepresentation of being serious about engagement and transparency with first nations, Métis and Inuit. Then they have people who represent that in their highest halls of representation.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you.

I want to proceed to our other two witness groups who were, I think, talking in a similar way about the other barriers that exist for indigenous businesses.

I am reflecting on this. The government says they want indigenous procurement. However, if they make procurement opportunities hard to access for new businesses, small businesses, businesses in rural areas and businesses run by people without political connections, we are going to have low numbers in practice, even if the government tries to massage the numbers in various ways.

Do you agree with that assessment, in general? What steps can we take to ensure procurement is more accessible for new businesses, small businesses, businesses located outside the national capital and businesses run by people without political connections, so that we're truly democratizing the process here?

Mr. Carignan is first. Then we'll go online.

[Denis Carignan]

Thank you, Mr. Genuis.

Well, part of the challenge in our sector is that—I already alluded to this—there just isn't a large population of indigenous IT professionals in the country. There are a number of businesses that are listed as IT professional businesses, but I can't speak to the number of employees they have who are actually technical and doing those jobs.

What's the best way to do it? The best way, obviously, is to get more businesses into the space. The question is, how do you get more businesses with people who have the skills into the space?

Part of the challenge is that building skills takes time. We, as a company, looked at this and said, “Well, we'd like to go and hire all the indigenous IT graduates we can find”, but we realized there just aren't enough. What we decided to do is build our own. We developed a training program, and we've been spending the last nine years investing in people to try to build this workforce and grow it.

In terms of how this process can benefit that approach, the rules can be structured so that incentives are built in for companies—be they indigenous or non-indigenous—to invest in people. It's about capacity development. I don't mean just training; I also mean jobs and careers.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Before I give a moment to our colleague online, I'll just say that I really agree with and affirm the importance of the point you made about that talent pipeline. It's so critical.

Go ahead.

[Dave Sergerie]

Thank you.

When we were preparing for this, we took it from the angle of government processes. There are three elements that we feel could be improved.

The first one is the way the government's 5% target is presented and perceived: Rather than presenting it as a goal to be achieved by government, it should be presented as a way to help indigenous—

[The Chair, Conservative, Kelly McCauley]

I apologize, sir. I have to cut you off again. We're out of time. You mentioned that you have three elements. If you could provide them in writing to the committee, it would be greatly appreciated.

Mr. Sousa, you have six minutes, please.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Thank you, Chair.

Thank you to the witnesses for being here today.

I'm really impressed, actually, because a lot of work has to be done collaboratively in order to achieve success in any partnership, in any kind of business venture, especially with government.

Government has taken the position that it wants to enhance prosperity throughout Canada, to support those in rural and remote communities and to ensure respect for truth and reconciliation and the independence of the indigenous community as we go forward. A lot has been done with respect to that.

I know that the opposition is making a lot of hay about a certain situation that may have arisen as a result of the growing pains of these processes, but they're essential for us to proceed in order to enhance success in our communities throughout Canada. In the past, even when the list was established, very little indigenous procurement, maybe only 1%, was happening. So much more has been achieved consequently throughout, and more has to be done.

Mr. Carignan, you made reference to capacity building and business acumen. That's what this is about. It's to provide a sufficient amount of resources to enable those skills, that training and that advancement to occur.

I've had some discussions with the folks from the First Nations Finance Authority. They're doing extraordinary work independently. They're sourcing capital. They're out in the marketplace. They're doing extraordinary things to provide the resources necessary for indigenous communities and businesses to succeed and partner with some of those major projects, especially projects of sovereignty, not just for the indigenous community but for Canada, especially in the far north and with mineral resources on your lands. We have to take precautions in order to protect all that independence.

I'm looking at what we're discussing today. I don't want to discuss indigeneity. It's up to the nations to determine who's in and who's out. There are lists that have been established. There are lists that are being used separately.

This is what I want to understand: How do we proceed in a way that enables greater success for you? Somewhere in here it discusses CCIB. You're registered in that. Tell me what the difference is in the process of being certified that way and then explain to the committee how you're dealing with it in the private sector outside of government procurement. That's also an opportunity for the indigenous community to proceed throughout Canada and North America—and the world, for that matter.

Can you answer on those two points, please?

[Denis Carignan]

For the first one, in terms of the certification processes and the new process we found with CCIB, with CAMSC—which is a separate one—and with the federal government's indigenous business registry, they were all very similar. We had to provide information on who we are as a company, what we did, our board construct and our ownership. There was validation in all three circumstances that the principal owners of the company were indeed indigenous, which entitled us to be registered as an indigenous company. I guess that's the answer there.

There were some subtle differences between the three of them, but they were essentially trying to establish who we were, and that we were who we said we were.

I'm sorry. What was the second part of the question, sir?

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

It was in terms of the private sector.

We're talking a lot about government procurement, but the idea is to facilitate and use that as a platform for you to do a whole lot more.

[Denis Carignan]

Right.

In terms of what we've done, call to action 92 really helped us. We found that corporately a lot of businesses across Canada wanted to do something.

I remember talking to a former chief information officer for one of the big oil companies in Calgary. She suggested that all of her colleagues had something to do, because that company liked to give back to communities. They could do it through contracting, through trucking and through different security services, but she as the chief information officer wasn't able to do it in IT. When we presented ourselves and our training model, with our goal to actually bring people into the profession and train them and grow them, she said this was her first opportunity to actually do something that she had wanted to do, which was help that corporation further its own commitments to indigenous communities.

We found that to be the case across Canada with other private corporations as well.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

That's great. The idea is to try to promote some indigenous community businesses and so forth to take advantage of the marketplace.

Do they have checks and balances? I mean, we need to do audits. We need to ensure there's integrity in the system. Any bad actors have to be appropriately dealt with.

That happens in procurement. We have over 10,000 contracts or more. I don't even know how many contracts the government has—something extraordinary—so there are a few that are bad actors. We have to deal with them. That's what the procurement office does constantly in post-audits.

[Denis Carignan]

Absolutely.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Do they do that in the private sector?

[Denis Carignan]

Whether formally or not, they've gone and validated that we're on these registries. That's the first part of it.

The one thing we're able to offer as a company is that if they're engaging with us partly to help indigenous Canadians find work experience, we can present them with professional resources on our team that are actually indigenous. I think that's a differentiator for our company, versus some of the other ones.