A recent report has highlighted major shortcomings in the federal government’s implementation of a strategy aimed at contracting Indigenous businesses. The report, issued by the Procurement Ombud, identified systemic deficiencies in how contracts were awarded through the Procurement Strategy for Indigenous Business, leading to a significant number of contracts being granted without proper verification of Indigenous eligibility.
The government has set a target of allocating five percent of all contracts to Indigenous businesses. However, the Procurement Ombud noted that the lack of accountability measures makes it challenging to ascertain whether this objective is being met effectively.
The review period, spanning from April 1, 2023, to March 31, 2025, scrutinized various government entities, including Indigenous Services Canada, Public Services and Procurement Canada, Shared Services Canada, Employment and Social Development Canada, and Correctional Services Canada.
To qualify under the strategy, Indigenous businesses must be at least 51 percent Indigenous-owned and controlled and listed in the Indigenous Business Directory. The assessment did not delve into the management of the Indigenous Business Directory.
Among the contracts examined, seven were awarded to joint ventures involving Indigenous and non-Indigenous entities, comprising a majority of the total expenditure. However, the report highlighted a lack of monitoring to ensure these contracts adhered to the stipulated Indigenous involvement criteria.
The report emphasized the need for an improved recourse mechanism to enable Indigenous businesses to voice concerns regarding the contract award process. In response, Public Services and Procurement Canada expressed support for establishing such a mechanism, deferring the responsibility to Indigenous Services Canada for collaborative development with Indigenous partners.
Indigenous Services Canada acknowledged the recommendations and pledged to implement policy changes in partnership with Indigenous stakeholders, including exploring options for enhancing the verification of Indigenous status.
