Indigenous and Northern Affairs Committee on Dec. 9th, 2024

[Anna Gainey, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Thank you, Mr. Chair.

Welcome to all the witnesses. It's a pleasure to have them with us today.

I'll start with Mr. Duclos.

Minister, we know that bad actors often try to take advantage of the procurement system. I know that our government recognizes this and has taken significant steps to stop this kind of fraud and hold people accountable.

Can you elaborate on what steps are being taken to strengthen the integrity of the system?

[Jean-Yves Duclos, Liberal, Québec, QC]

Thank you very much, colleague.

Before I answer your excellent question, I'd like to talk about the broader context.

There are about 60,000 indigenous businesses in Canada, but only about 2,900 are currently registered on the indigenous business directory. The government is therefore working hard to encourage more indigenous businesses to register so they can more easily and quickly contribute to meeting the needs of the Canadian government.

As Minister Hajdu said a little earlier, if we work harder on this, that will help create better jobs for indigenous people across Canada, build better businesses and reduce the costs of poverty. Minister Hajdu may not have mentioned that, if we achieve the full participation of indigenous businesses in Canada, approximately 150,000 indigenous people could be lifted out of poverty. There would also be major benefits for families and communities.

Minister Hajdu also said that, by working harder to reach or even exceed the 5% target—this is a minimum, not a maximum—we will also create tens and tens of billions of dollars in revenue in Canada. That will give us more tax revenue to provide more funding for education, health and infrastructure services for indigenous peoples.

Now, to get there, this program must also build confidence. That requires integrity. Your question is therefore very relevant. What can my department do to help ensure the integrity of this program and Canadians' confidence in it?

Thanks to my departmental officials' leadership, we had the opportunity to create a new entity just a few months ago, in May 2024. The Office of Supplier Integrity and Compliance, or OSIC, supports Minister Hajdu and her team in situations where we may want to act quickly to suspend a supplier from existing contracts or declare them ineligible for future contracts. For example, we can now act more quickly to suspend or declare ineligible any business that commits an offence under the Criminal Code or the Financial Administration Act, that has been declared ineligible by a competent authority other than the Canadian government or even by an international organization, that has violated the Code of Conduct for Procurement, or that has committed offences related to forced labour, the environment or the Canada Labour Code. Finally, even if there has not been a criminal charge or conviction, when OSIC determines that there is a risk associated with the Government of Canada contracting with a particular company, that company can be temporarily or permanently suspended or declared ineligible.

[Anna Gainey, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Thank you.

How much time do I have?

[The Chair, Liberal, Patrick Weiler]

You have one minute.

[Anna Gainey, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Okay.

Minister Hajdu, in the last exchange, the back-and-forth was a little hard to follow. I'll allow you to finish some of your sentences.

You started something, and I'm curious if you could elaborate on it. You said that there were also examples of where we're exceeding the 5%. You had data.... There was a question around data inconsistencies, perhaps with the AFN. If you have an example, maybe this is an opportunity to show some of the success or to show where we are hitting those marks.

[Patty Hajdu, Liberal, Thunder Bay—Superior North, ON]

Thank you for the question.

I will submit that to you in writing, because I don't have it across all departments, but I can tell you, for example, that in Indigenous Services Canada, where we have a bit of a leg up with relationships with indigenous peoples, it's at 18%.

These are significant numbers. They're generating wealth for communities. That's the piece that sometimes gets lost in this conversation. It's not just something that's nice to have; this is about helping communities have economic self-determination.

What does that mean? It means that if the Government of Canada is funding a fire hall, for example, and if the community wants to add two more bays and two more trucks, it doesn't have to work directly with the department to do that. It has the economic freedom to be able to do this. Isn't that what we're all about—economic freedom?

These procurement targets are playing a really important role in helping the Government of Canada turn its head to new business partners to fulfill some of the contracts of the Government of Canada. It also opens doors to new companies that may have never seen themselves as being able to secure a customer like the Government of Canada.

I can tell you that in just nine years of having been here, whether it's for grants, for procurement or in other kinds of relationships with the Government of Canada that generate revenue for an organization or for a company, oftentimes it is relationship-driven. There are obviously criteria that have to be met. There are contests and procurement processes, but a trusted partner is something that I think is valuable. When companies get a foot in the door, then they can start to establish their reliability as strong companies from which to procure. I don't want to lose that.

I think it's really important that you asked that question. Thank you.

[The Chair, Liberal, Patrick Weiler]

Thank you very much, Ms. Gainey.

Mr. Champoux, you have the floor for two and a half minutes.

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Mr. Chair.

Minister Duclos, I'm going to talk to you a bit about the problem of subcontracting among indigenous businesses.

I'll give you an example. The Department of National Defence awards a contract to a subcontractor, who is then responsible for finding suppliers of clothing for Canadian Armed Forces members. The subcontractor is located in Saint-Jean-sur-Richelieu. There are indigenous businesses that are perfectly capable of supplying the goods for this contract, businesses such as Bastien Industries in Wendake, which I'm sure you're familiar with. However, this company is not approached. The supplier in Saint-Jean-sur-Richelieu probably doesn't know that he can use indigenous businesses.

Why are subcontractors that do business with the government not required to reach out to indigenous businesses? Your government is usually the champion of inclusion criteria, after all. Why is this criterion not a requirement in calls for tender?

[Jean-Yves Duclos, Liberal, Québec, QC]

Thank you, Mr. Champoux. That's a great question.

I would say that there are a number of ways to encourage, and sometimes even require, indigenous businesses to participate in the procurement process, depending on the situation. As I was saying, the Canadian government sometimes has an obligation to award contracts to indigenous businesses in certain contexts and certain geographic locations. Generally speaking, our approach to encouraging the full participation of indigenous businesses applies to all Canadian government contracts.

In all cases, if companies submitting a proposal want to increase their chances of being awarded a contract, we encourage them to submit indigenous participation plans. If they themselves are indigenous businesses, we encourage them to include indigenous subcontractors as well. When a contract is awarded to a non-indigenous business, we encourage that business to subcontract with indigenous businesses and to demonstrate commitments to employment, training and benefits for the communities.

The fact remains that it's a competitive process. Apart from the exceptions I mentioned initially, these competitive processes can result in subcontractors who are not indigenous being hired.

[Martin Champoux, Bloc, Drummond, QC]

In the example I shared, it appears that the company in question was not even aware or informed of the opportunity to participate in a contract that was a perfect fit for its corporate profile.

Is the message not getting through? For example, when you award a contract to a subcontractor who is then responsible for finding suppliers, is it at that second stage that the message doesn't get through?

[The Chair, Liberal, Patrick Weiler]

Please keep your answer brief.

[Jean-Yves Duclos, Liberal, Québec, QC]

My answer will be brief, since the member already said it very well in his question. The Canadian government not only has the desire, but also the obligation, to increase its communication activities and enhance its relationship with indigenous peoples and businesses. That's done in a number of ways. Several hundred activities of this kind have been held in recent years and thousands of indigenous businesses have taken part in them, but too many businesses are unfortunately still not well enough informed.

[The Chair, Liberal, Patrick Weiler]

Thank you very much, Mr. Champoux.

Next, we're going to go to Ms. Idlout for two and a half minutes.

[Lori Idlout, NDP, Nunavut, NU]

Qujannamiik, Iksivautaq.

I'm not too sure to which minister I should ask this question regarding article 24 of the Nunavut Agreement, with article 24 being about Inuit firms getting government contracts.

As you might be aware, the federal government has obligations as well. I wonder if one of you can give us an update about how the implementation of article 24 is going.

[Jean-Yves Duclos, Liberal, Québec, QC]

I can take this question. Thank you very much.

MP Idlout, you are obviously very aware of where this article 24 comes from and aware of why it was so important to Nunavut. That was followed, as you also will know, most likely, by a Treasury Board directive on government contracts in 2019, which went beyond article 24. That comes with the requirement that government contracting in the Nunavut settlement area meets the federal government's obligations under article 24, as you have said.

It means that Nunavut Tunngavik Incorporated, the organization whose leadership is so key, is responsible for maintaining a registry of Inuit firms that helps to identify those commodities and services that are needed—

[Lori Idlout, NDP, Nunavut, NU]

Could you just quickly respond? I don't have enough time. How do you think the implementation of the federal obligations is going?

[Jean-Yves Duclos, Liberal, Québec, QC]

I missed the....

[Lori Idlout, NDP, Nunavut, NU]

The federal government has obligations to implement under article 24. Could you give us a status update on how the federal government is doing in implementing article 24?

[Jean-Yves Duclos, Liberal, Québec, QC]

Okay. I would prefer to send those details to you directly, because there are many aspects to that important question, and I think you deserve to know the list of them.

[Lori Idlout, NDP, Nunavut, NU]

Thank you so much. I'll look forward to that.

I do have another question for Minister Hajdu regarding the indigenous business directory, which I understand is led by your department.

At what point do you think that the government will get out of the business completely so that it's led by indigenous peoples?

[Patty Hajdu, Liberal, Thunder Bay—Superior North, ON]

I would say in the very near future. The challenge, as I indicated in some of my answers to your colleagues, is that we had hoped that we would get to a place of consensus. We've had indigenous partners studying the next steps on what to do, as you know, for quite some time. In fact, they provided a report. Even the report itself is conflicted in terms of any consensus.

I think the next step, for me, is to contemplate how we ensure that we set up an independent approach somehow with voices of all of the distinctive groups on that independent agency, for lack of a better word, that will then begin that hard work of wrangling through what the criteria are. I would say that it will be challenging, as you know, because there are a number of different scenarios that different people have a variety of perspectives on.

To me, the allegations over the weekend, combined with the ongoing attention on the indigenous business directory, means that it is high time for indigenous people to control for themselves the space of identifying what an indigenous business is and what qualifies someone to say that it is an indigenous business. Then we can work with PSPC to make sure that the targets are accessible to those businesses.

As I said, it's important that we have an approach that partners feel confident in.

[The Chair, Liberal, Patrick Weiler]

Thank you very much, Ms. Idlout.

Next, we'll go to Mr. Zimmer for five minutes.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Thank you, Mr. Chair.

Thanks to our witnesses for coming today.

A recent article said, “Canadian Army says new military sleeping bags not suitable for 'typical Canadian winter'”. Rob Huebert, an Arctic expert, said, “I wonder if they should have just gone to Canadian Tire.”

The defence department spent more than $34.8 million on 55,000 sleeping bags. This is from the article:

Troops who had used the recently issued General Purpose Sleeping Bag System...late last fall in a preparatory exercise found “several critical issues”....

Temperatures during the deployment ranged from -5C during the day to -20C at night.

Those are hardly harsh conditions in the Canadian winter or north. It continued:

The “critical issues” discovered by the soldiers “related to a lack of warmth with the new GPSBS”—

[Ben Carr, Liberal, Winnipeg South Centre, MB]

I have a point of order, Mr. Chair.

[The Chair, Liberal, Patrick Weiler]

I'm pausing the time. Mr. Carr has a point of order.