Mr. Chair, I have two answers.
One, certainly there is a multiplier effect, but where I'll go with the answer is unfortunately a bit negative in the sense that the data points that exist around indigenous procurement are certainly not where we would like them to be. That triggers the second part of my response, which is around the 5% and how verifiable it is that the 5% actually directly impacts indigenous suppliers.
Then, if you'll allow me, I'll build out what we have said in the report and why it's important to get a much stronger baseline set of data so that we can know, as we make incremental progress and hopefully more than that in the weeks and months ahead, how we're progressing.
Essentially, the way the 5% is calculated is a combination of both PSIB set-asides and non-PSIB set-asides that are awarded to indigenous suppliers. When you look at the attributes of the strategy, there are two important criteria. One is 51% ownership and control, and the other one is 33% of the value being delivered by that indigenous supplier that was contracted. The total value of the contract, however, is counted against the value that's included in the 5%, so immediately there's a disconnect that's created. In the 33% specifically, you could have a delta of 67% that's not actually provided to the indigenous supplier but is in fact counted against that 5%.
An additional concern we had was also the amount of discretion associated with the exceptions to the total value of government procurement. It's 5% of the total value of procurement that's ultimately calculated, but these exceptions amount to as much as 50% to 60% of the total value, so you're diminishing the denominator significantly before calculating that 5% criteria.
The last thing I'll say is that in addition, we found a lack of integrity associated with the 33% criteria, and that 33% wasn't a contractual term in all of the contracts we saw. Therefore, the integrity associated with even that 67% figure is in question.
The PSIB has absolutely produced positive results for certain indigenous suppliers, but I don't think it's commensurate with the talking points around the 5%. The 5% has resulted in an overstatement of the impact on indigenous communities, and when you speak to those indigenous communities first-hand, they are also struggling to see that level of impact in their communities.
That being said, our office has also heard very positive things about the PSIB, and there have been positively impacted indigenous suppliers who have benefited from the set-aside. By all means, what I'm asking is let's not punish indigenous suppliers, because any wrongdoing is not theirs. The wrongdoing is in the implementation of a strategy that has existed for 30 years, and that is my ultimate frustration with why I'm here today. I shouldn't have to speak on 30 years of failed implementation.
That's why I think so many people are disappointed with the outcomes from this report, but it's also important to reflect back on other recommendations made and see why more change hasn't already happened.
I know you asked a data question, and I've taken it elsewhere, but the last point I'll make is about accountability.
Ultimately, we have to have accountability to ensure change. That's where the recommendations are so important to having a policy that provides that centralized guidance to everyone so everyone understands their obligations so they too can experience the positive impact you experienced first-hand across the board so indigenous suppliers feel supported and that they can trust in the federal procurement process.