Government Operations Committee on Dec. 5th, 2022

[Victoria LaBillois]

I do. I was just taking notes.

I think what's important when we say we have challenges with access to capital.... I'm going to further qualify that and call it “access to competitively priced capital”. If I can obtain a loan at 11% but I'm lacking the financial literacy or the financial management competence to understand the importance of interest rates, my business is going to go under. We need to ensure that the capital we're accessing is competitively priced, in line with lending rates that are prevalent across Canada. That is one of the things I see challenged. We see different efforts to increase access for, say, indigenous women entrepreneurs or indigenous people in general, but we must keep in mind that it's not just access to capital. It's access to competitively priced capital.

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Johns.

Mr. Barrett, you have five minutes, please.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Thanks very much, Mr. Chair.

Thank you to all the witnesses for joining us today.

We'll start with you, Mr. Metatawabin, please.

Has the government fulfilled its 5% commitment when it comes to IT contracting?

[Shannin Metatawabin]

I don't believe it has, no.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

I will just give the other witnesses the opportunity to indicate if their answers are different.

[The Chair, Conservative, Kelly McCauley]

Why don't we start with Mr. Wanuch, please?

[Ray Wanuch]

No. I think that's been cited a number of times, the lack of data. I couldn't tell you what the number is. I think we know where it should be, but there's a lack of data. It's not there.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Okay.

[Ray Wanuch]

It's sad to say, but we can't give you an answer.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Thank you.

Mr. Ducharme, go ahead.

[Philip Ducharme]

Again, it's what Ray and Shannin said. There is no data that's available. You can't get that information from the federal government.

Within our team, we went into Buyandsell Canada to search contracts to see if we could do it that way. However, 2018 was the last time it was publicly reported. Hopefully by December 2023 we'll have a better indication of where the federal government stands with indigenous procurement.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Thank you.

Finally, it's over to you, Ms. LaBillois.

[Victoria LaBillois]

I don't have access to the data. I could not answer your question. However, I'm a storyteller. I want to tell you about using IT, as an example.

Our board, the National Indigenous Economic Development Board, was seeking to update our website. Under the sole-source contracting, which I referenced in my opening statement about the $40,000 threshold, we were working with an indigenous-owned website development company that could do the work. Over the course of navigating this process—and you are aware of how costs have increased during the pandemic—we didn't meet that $40,000 threshold any longer. That eliminated the company, although it did all the initial work of trying to respond to the bid and complete this. We're still without an updated website, and we dragged this indigenous-owned company through the mud in trying to get there.

Thank you.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Thank you.

We've seen many of the government's IT contracts go to a relatively narrow group of well-connected consulting firms. In some cases, the contracts are written in such a narrow way that only a couple of firms could fit those criteria and qualify.

Has it been your experience that indigenous companies might not qualify for contracts, when, it seems, these contracts have been written with a predetermined outcome in mind? That is to say, one specific company is selected. Although it's presented like an open procurement, they've predetermined who will receive it, based on the narrow set of criteria they included in there.

One or two of you folks could respond to that one. Then, I have one more question, if I have the time.

[Philip Ducharme]

I would like to respond to that question.

Again, our research shows that indigenous businesses feel they are being excluded by the language of the RFPs that are coming through. The federal government has talked about unbundling contracts. Unless they start unbundling them and making it easier for our indigenous businesses to qualify, they're not going to meet the mandatory requirements. That, again, is an issue where we lose out all the time.

There is, I think, some truth to what you're saying.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

I'm going to move to my last question, because I have about a minute left, I think.

I will turn to you, Mr. Metatawabin, if I can.

I'm curious whether you have any examples of jurisdictions with strong accountability programs to ensure governments follow through with their promises, with respect to procurement.

[Shannin Metatawabin]

I think a good example is Supply Nation in Australia. They created an indigenous organization that has done exactly what we're promoting today: creating an indigenous procurement institute. In the first year, when they targeted 3%, they achieved 9%. They achieved higher targets when they put the department's targets in the public realm, and this is what they are achieving on an annual basis. It was accountability by departments, to each other, that prompted everybody to get something done.

Unless there are consequences to not achieving targets, there won't be anybody wanting to take drastic steps to ensure indigenous businesses achieve procurement opportunities. For 35 years, we've been talking about procurement opportunities for indigenous businesses. It's the frontline managers who develop the RFPs that exclude indigenous businesses. When you have an indigenous business that's actually eligible, they will go with what they know. That's a non-indigenous business.

That is the big problem, right there.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Barrett.

Mr. Bains, you're up.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you, Mr. Chair.

Thank you to all our witnesses for joining us today.

My questions are coming from the traditional territories of the Musqueam and Coast Salish peoples.

I'm going to begin with Mr. Ducharme.

Can you please tell us about recent developments in indigenous procurement in the natural resources industry, and the steps you've taken to help its development?

[Philip Ducharme]

I think the natural resources sector has led the charge on indigenous procurement in Canada. The Wood Buffalo region, especially, has been doing it for many years. In 2021, Suncor and Syncrude did a combined spend of $2.4 billion with indigenous businesses, which equated to, I believe, 17% of Suncor's overall spend and 27% of Syncrude's.

It's happening across the country if you're looking at clean energy, as well. Some of our champions, including Ontario Power Generation, have publicly made targets. Hydro One has also publicly made targets. By making them public, they are opening themselves up to ensuring they meet them and working with our indigenous businesses. They do that through a number of different ways, even through indirect opportunities, where they bring in their prime vendors. These prime vendors are working with our indigenous businesses to grow the capacity and make them be suppliers.

I think that sector has been doing it for a long time. They share some great practices. Suncor has spoken to Deloitte, another one of our champions, on how to increase it. I believe Deloitte has met its internal targets, as well, for indigenous procurement. I think, again, that the best practices that came through the natural resources sector can come through the rest of Canada, as well.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Is there still room for improvement there? I imagine there is.

[Philip Ducharme]

There is. There's always room for improvement.

Again, regarding that 5% in a previous question asked.... We were advocating for that 5% based on the indigenous population. However, in regions where the population is bigger, it should be higher. If you look at the Yukon government, their indigenous procurement target is 25%.

We also look at indigenous businesses as a whole. Fifty per cent of our businesses are urban-based. If they are only working with the resources within that area, they are not helping that demographic. We want to ensure that, within the entire supply chain—not just where they are doing the work, but even in corporate offices—they are utilizing indigenous businesses for IT, for staffing requirements, or even for something as simple as catering.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you.

Mr. Wanuch, can you tell us about your recommendations on indigenous business diversity for the future?

[Ray Wanuch]

I think it starts at home, allowing access to procurement. We've also addressed throughout this presentation the lack of finances, the lack of training. Our role is capacity building. We've been dealing with a number of federal departments to roll that training out in many ways to our members, whom we bring together.

You've seen a number of organizations here at the table representing their own memberships. I think it's more about how we bring them together and work together. That's why I like the idea of a federated approach. You can still deal with your own membership in your respective area, but come together to share information and best practices, whether it's under the banner of a data lake, which I think should be considered, or other issues, such as training for procurement officers. I think this is how we have to come together for the betterment of our communities, our indigenous entrepreneurs and what we contribute to the GDP of this country.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you.

Ms. LaBillois, I think you've spoken quite a lot about the challenges with the awarding of contracts to indigenous businesses, diversity measures and programs, and where the government can improve.

Can you please share some areas you think the government has done well?