Government Operations Committee on Dec. 5th, 2022

[The Chair, Conservative, Kelly McCauley]

I'm afraid it will have to be a brief answer, please.

[Victoria LaBillois]

Luckily, it is.

Where has the government done well in procurement? I think looking at the procurement program and going through this modernization exercise has afforded the opportunity to listen to many indigenous voices and their experiences with procurement. Creating a target is a good starting point.

I know my colleagues have mentioned working within education and sensitization within the procurement delivery landscape within the federal public service. We've seen progress happening there, but it can't be exploratory; that type of education and sensitization needs to be mandatory.

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Colleagues, if you don't mind, I'm going to combine the last two rounds for the NDP and the Bloc.

Ms. Vignola, you have five minutes.

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

Thank you very much, Mr. Chair.

Ms. LaBillois, I would like to ask you two questions that you can answer with a yes or a no. I would like to go back to one of your answers. You said that you had to seek permission from the board to establish and operate your business.

Does being an indigenous woman increase the number of challenges you face in the entrepreneurial world, specifically in procurement?

[Victoria LaBillois]

Yes.

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

Thank you.

Before attempting to solve the problems related to access to federal government contracts caused by the Indian Act, would it not be wiser to carry out a complete review of the act?

[Victoria LaBillois]

Yes.

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

Thank you.

Mr. Metatawabin, earlier you listed the services that indigenous capital corporations provide to indigenous businesses. However, I am wondering about access to capital.

Are the capital corporations able to offer interest rates as good as those offered by the major Canadian banks, for example?

[Shannin Metatawabin]

Thank you for that question.

We're in the process right now of making sure that access to capital is something that indigenous entrepreneurs have. The organization I represent received $240 million 30 years ago and has recycled it 15 times to $3.3 billion in lending. They've never been able to take advantage of all the opportunities within their regions with adequate access to capital.

In order to deploy money, you need to ensure there's an enabling environment to ensure you have deal flow. The Government of Canada created a program called “Aboriginal Business Canada” many years ago, which provides an equity contribution to an indigenous business that reduces the risk level on that loan. That has been highly successful. They've shown that for every dollar provided, there is $1.26 to $1.40 provided back to the treasury department. These are social impacts and returns to the government. It's an actual investment to invest in the indigenous economy: providing more enablers, tax incentives for investors and also the training capacity that Ray was talking about. It's very important to make sure that everybody has the training, understanding, knowledge and know-how to start a business.

Being plugged into the procurement system needs to be improved, because they make it highly complex, and for indigenous entrepreneurs, some of the barriers they create make it highly complex to even get in the door. We just have to improve everything, and if we have that opportunity, this organization can work with the government to make sure we take down these barriers.

Thank you.

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

Thank you very much.

My last question is for Mr. Wanuch.

Mr. Wanuch, 18 years ago now, I supported Innu students in a major pan-Canadian indigenous entrepreneurship competition that was organized in conjunction with a section of the Business Development Bank of Canada that was committed to supporting indigenous entrepreneurs. I don't know if that section still exists or if it has changed its name, but the competition was called E‑Spirit.

Throughout the year, the students would learn the different steps towards creating a product and a business. Then, at the end of the year, they would go to a location to share with first nations from across Canada what they had done and how they had done it. In our case, it was in Prince George, British Columbia, and it was amazing. I still get chills just thinking about it.

Is this competition, or one like it, still going on to your knowledge?

If it no longer exists, would it be wise to re‑establish it to encourage indigenous youth to go into entrepreneurship?

[Ray Wanuch]

That's a good question. I don't know if it still exists. However, I think there are variations of entrepreneurship going on throughout Canada. Shannin may be able to offer up an answer on that too.

It's vitally important. I think where we try to come across is that it has to be in balance, meaning that, yes, you can have entrepreneurship, but when you're within our communities, it's more about job creation and sustaining a livelihood, rather than profit being the main motivator.

I think there are options for that. You're finding communities going through the additions to reserve process now, or starting to develop profitable businesses in urban centres and taking those profits and bringing them back to the community for social programming and for educational purposes, such as becoming an entrepreneur or, in our case, an economic development officer, which all still brings it together. There are so many entrepreneurship programs for our indigenous youth, but there still have to be more specialized programs depending on the age and depending on the region and what industry they are in. We have to look at all of this.

We're going to have our national conference out at Membertou next year. Look at Clearwater Industries and what happened there, where the First Nations Finance Authority was able to provide capital so that indigenous groups could buy out that corporation and have a lot of input into that local economy. There are examples like that one that we have to cite and continue the process.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Mr. Johns, we'll go to you.

Colleagues, I hope you don't mind that I've been letting things go a tiny bit longer, because I think we're still hearing important things, so bear with me.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Thank you, Mr. Chair.

Ms. LaBillois, last June, Public Services and Procurement Canada indicated that over the previous three years they had awarded an annual average of $442 million to indigenous suppliers. In your opening statement, you indicated that indigenous businesses receive less than 1% of the value of federal procurement contracts, or about $68 million a year.

Can you maybe share why you think there may be a discrepancy between what the government is reporting and what's actually happening?

[Victoria LaBillois]

I cannot speak to what is causing that discrepancy. I can only speak to my experience in working with the procurement strategy. Since 2011, as I have tried to make this strategy work for my suite of different companies, I've seen that one of the initial challenges an indigenous business owner will encounter is the lack of projects deemed indigenous set-asides. Once an RFP is released, you can't turn back time and say that would have been a great opportunity for indigenous businesses to be competing for this work.

There were also a number of qualifiers attached to how a project could be deemed an indigenous set-aside. One was related to the percentage of the population that was indigenous. Eighty per cent or the majority of end-users of the product, good or service had to be indigenous. Think of it as a funnel. If the projects aren't being deemed indigenous set-asides, we're starting from less than zero in getting our foot in the procurement door.

Once a project is deemed an indigenous set-aside, there are additional barriers we encounter. One of my colleagues spoke about the problem of an indigenous-owned company not being able to obtain a bid bond just because they're located on reserve. In my humble opinion, once we get to this 5% of projects being deemed indigenous set-asides, that's going to be the stumbling block for us, in addition to problems with access to competitively priced capital and the systemic barriers that exist in the insurance industry and with bonding and banking.

Thank you.

[Gord Johns, NDP, Courtenay—Alberni, BC]

In your opening statements, you mentioned that indigenous national economic development organizations are close to finalizing their business plan for an indigenous procurement institute. Mr. Metatawabin also talked about it.

Can you speak about how the federal government can support such an institute in meeting its goals?

[Victoria LaBillois]

I think one of the primary ways the federal government can support the development of this institute is through its financial support and endorsement of this organization. It is being designed by indigenous organizations that are coming together.

It's truly a historic time for our people. I referenced in my opening statement the national indigenous economic strategy for Canada, which in itself is a historic document, because it's indigenous people holding the pen for the first time, stating with clarity what we want. And if we look at this indigenous-led procurement institute, this is a continuation of that exercise, with us stating decisively that this is what we want to move forward together.

Thank you.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Metatawabin, go ahead, please.

[Shannin Metatawabin]

Thank you for that.

I think this is a historic time. In the United Nations Declarations on the Rights of Indigenous Peoples, the declaration the government has supported and created legislation for, article 5 says that indigenous people are best placed to provide services to their own people.

By supporting institutions, we can plan and we can support. What we're asking for from the government is that runway to begin this process of planning and creating this institute so that it can create its mechanism, work with the government, advocate and hold accountable the departments that are not investing in providing services and contracts to indigenous businesses. It's important to hold everybody accountable, and that's the only way a change can be made.

Thank you.

[Gord Johns, NDP, Courtenay—Alberni, BC]

I have a really short question, Mr. Wanuch. There was a conversation earlier about it really being procurement literacy and the challenges around the process and ensuring that people get the proper training to apply for procurement. Can you speak about the importance of that and what Canada could do better?

[Ray Wanuch]

Yes. There's a concierge process that we've talked about, not only for us with our database but also for NACCA and CCAB. We've also instilled a navigator approach and a mentorship program. A lot of our entrepreneurs are new to this game, and there needs to be a facilitation process. That's how we see our role—to facilitate and hold their hands.

You talked about IT and how maybe there are only a few companies getting it. Well, maybe there has to be a set-aside there for new indigenous suppliers that are going to enter the process, and we will go along for that journey with them to make it fair and equitable for everybody in this procurement table.

I think that as we evolve, procurement is going to evolve. I think we can provide that training for our procurement officers, too, so that they can relate to those entrepreneurs in smaller centres and where they come from, where they don't have access to capital and maybe where they don't have access to clean drinking water.

We have to generate this whole process and facilitate it right to the end.

[The Chair, Conservative, Kelly McCauley]

Mr. Johns, thank you.

Mrs. Kusie, you have five minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Mr. Chair.

Mr. Metatawabin, I want to go further on something Mr. Ducharme touched upon: entries into federal procurement contracts for indigenous businesses in certain sectors. In your opinion, what sectors are easier for indigenous businesses, and which ones are more difficult in terms of obtaining contracts?

[Shannin Metatawabin]

Through our 35 years of providing entrepreneurs with access to capital, indigenous entrepreneurs have covered all industries. Over the last 35 years, we've seen more service-type businesses, for sure, because we're in the community. We're providing service-type businesses—contractors, builders, transportation, food services—but we're gradually getting into the more complex, such as IT or professional services.

Indigenous entrepreneurs will respond. Twenty years ago, the Government of Canada had this big drive for procurement, and it said there was going to be this big opportunity, so indigenous entrepreneurs invested time and money into accessing procurement. However, the government never responded by providing contracts to indigenous entrepreneurs, so they went back just to the market within their regions. They did not spend time going through the process of submitting any other contract requests through the Government of Canada.

We need to do this right, because the market is there and they will respond in kind. They are waiting, willing and able. We just have to have the right enablers.

I want to highlight that, over 35 years, the National Aboriginal Capital Corporations Association has seen a 70% decline in the support for its programs and services for IFIs. That eliminates the nice youth program that you mentioned. All these programs that were in place have been reduced to minimal levels.

If we support it—and I said that it's an investment in our community—you'll see businesses ramping up and getting ready for this.

Thank you.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much.

Mr. Wanuch, I want to go to you, although as a Calgarian, I do take offence with your Edmonton Oilers sticker.

[The Chair, Conservative, Kelly McCauley]

Point of order.