Thank you very much, and good morning.
Thank you, Mr. Chair and committee members, for the opportunity to provide an overview of the procurement strategy for aboriginal business, which is managed by Indigenous and Northern Affairs Canada.
I have provided a short deck that contains some key facts about the procurement strategy for aboriginal business and its planned modernization. I will leave it with the committee as something you can look at in more detail.
I am accompanied today by Mohan Denetto, who is the director general of economic and business opportunities in the department.
Before I begin, I would like to recognize that we are meeting on the unceded traditional territory of the Algonquin nation.
Indigenous economic development is crucial to increasing the socio-economic outcomes and self-determination of indigenous peoples. The procurement strategy for aboriginal business is part of a suite of federal programming, which includes a number of initiatives to support indigenous peoples to more fully participate in the Canadian economy.
We view procurement as a key tool to advance indigenous economic development. The federal government spends more than $20 billion annually on procurement. Working with the federal government represents a tremendous opportunity for indigenous businesses to expand products and services and enter into new markets through active economic participation.
The procurement strategy for aboriginal business was launched in 1996 to increase the number of indigenous businesses competing for and winning federal contracts. It includes a number of measures designed to assist indigenous businesses to gain access to the federal market, including mandatory set-asides and voluntary set-asides, joint ventures, and subcontracting criteria.
The department provides advice and guidance to federal departments on the application of the procurement strategy for aboriginal business through a 100-plus member national coordinators network. We register qualified indigenous businesses in an online directory, and we verify the eligibility of firms via compliance pre-award and post-award audits. We leverage grants and contributions to allow indigenous organizations to build and explore business strategies with other jurisdictions and the private sector.
The value of set-asides reached $227 million in 2014, representing a 300% increase over five years since 2009. This has largely been achieved through departmental target setting and ongoing meetings with key departments, including Public Services and Procurement Canada; and Innovation, Science and Economic Development Canada.
Since 1996, indigenous businesses have won over $1 billion in the “procurement strategy for aboriginal business” set-asides. From 2012 to 2014, the number of indigenous businesses winning set-asides increased by 100%. Over that same period, the number of indigenous businesses winning contracts not set aside under the procurement strategy for aboriginal business also more than doubled, from 153 businesses to 347.
While the value of set-asides and the number of businesses winning them have increased, set-asides still represent a small percentage of the government's total procurement. While we have access to some data on the number of indigenous businesses winning contracts not set aside under the strategy, this data is not currently as comprehensive as it could be. Through the procurement modernization agenda and open data strategy, the quality and scope of data available on the procurement strategy for aboriginal business will improve.
We have also had some success with our proactive work in increasing the number of procurement opportunities available to indigenous businesses, including working with other departments to apply indigenous participation components to large-scale contracts in the areas of defence procurement and health systems.
For these large-scale contracts, there was insufficient indigenous business capacity to set these contracts aside. However, the Government of Canada introduced requirements for prime contractors to provide indigenous subcontracting or employment opportunities. This approach provides a direct economic benefit to indigenous peoples and communities. It also allows indigenous businesses to create partnerships with industry leaders, gain experience, access more complex opportunities, and enter into supply chains.
The department has also worked in collaboration with federal partners, other jurisdictions, indigenous organizations and the private sector to expand the application of the model used in the Procurement Strategy for Aboriginal Business, or PSAB.
For example, through the national shipbuilding procurement strategy, Indigenous and Northern Affairs Canada and its partners worked with Irving and Seaspan to promote indigenous business, which resulted in a number of indigenous businesses successfully entering the shipbuilding supply chain and creating employment and training opportunities.
We also prepare businesses to compete through grants and contributions funding. For example, the department assisted the Saskatoon Tribal Council to develop a procurement business model, which resulted in significant procurement and labour force opportunities for indigenous people.
It should also be noted that some comprehensive land claim agreements call for the generation of socio-economic benefits. Procurement strategy for aboriginal business officials work closely with comprehensive land claim agreements officials and other departments to ensure that comprehensive land claim agreements' obligations are respected and that indigenous participation is maximized. For example, the department is currently working with Public Services and Procurement Canada, Treasury Board Secretariat, and Nunavut Tunngavik Incorporated to examine how to better meet the set-aside and socio-economic benefit requirements set out in the Nunavut Land Claims Agreement.
Throughout these processes, Indigenous and Northern Affairs Canada also takes steps to ensure Canada's commitments in international trade agreements are respected.
In 2014, the department conducted an internal evaluation of the procurement strategy for aboriginal business. The evaluation found that the strategy was aligned with government priorities, and that it was relevant, efficient and economical, with good performance. However, it also highlighted a number of issues that need to be addressed.
The evaluation noted that the procurement strategy for aboriginal business generally benefits larger and more established firms, and may need to review outreach activities to better target small and medium-sized enterprises. More rigorous data collection and analysis is needed to better monitor the impacts of the procurement strategy for aboriginal business on indigenous business growth and communities.
The evaluation also suggested that approaches be adjusted to address the evolving needs of indigenous businesses. The department will continue to address the findings of this evaluation as part of the government's current procurement modernization agenda.
Last week, presentations to this committee outlined a number of initiatives that are expected to have a positive impact on indigenous procurement, including the simplification of the federal procurement process and increased emphasis on social procurement. These initiatives will clearly benefit indigenous small and medium-sized enterprises, which include over 43,000 self-employed indigenous people in Canada. The key to success will be to work with partners that have close ties and regular contact with indigenous businesses and business owners.
In addition to the government's broader efforts, indigenous services is undertaking its own review of the procurement strategy for aboriginal business to leverage and enhance procurement policies, guidelines, and mechanisms to maximize the participation and benefit of indigenous people, businesses, and communities from federal programs, expenditures, and investments.
Over the next six months, we will undertake a review of the procurement strategy for aboriginal business, and engage with our federal colleagues and external stakeholders through an online process and two round tables. We will develop an options paper in spring 2018 for policy consideration.
Before I make my closing remarks, I would like to take a moment to share how we see indigenous procurement improving.
Going forward, we would like to increase the number and value of procurement opportunities available for indigenous businesses. To complement this, we want to grow the number of indigenous small and medium-sized enterprises bidding on, and winning, federal contracts that are not set aside. Some of the potential actions to achieve this vision are presented in slide 10 of what I've provided. We will also work to better monitor and measure impacts of indigenous procurement.
We look forward to working collaboratively with other federal departments to better match indigenous business capacity to their procurement requirements. The impacts of all these actions will be monitored and measured through improved performance measurement so that we understand the longer-term impacts of federal indigenous procurement initiatives.
Thank you for the opportunity to present to your committee. We look forward to the final report of this study and incorporating your recommendations into our modernization program.
I look forward to any questions and comments you may have.
Thank you for having me back.
Thank you, Mr. Chair and committee members. Accompanying me today is Carolyne Blain, director general of strategic policy for PSPC's acquisitions program. We will outline the work we do with client departments and indigenous suppliers with respect to federal procurement opportunities.
By way of a quick recap from last week's presentation to the committee, PSPC is the government's common service provider for the acquisition of goods and services for about 100 client departments. We deliver against a complex backdrop of legislative and regulatory requirements, Treasury Board policies, and trade agreement obligations.
Specific and legally binding procurement obligations arise out of the comprehensive land claim agreements, also known as modern treaties. Of the 25 modern treaties that Canada has signed with indigenous groups and territorial or provincial governments, 20 contain specific federal government contracting obligations. These obligations are not in effect across the whole country, but are applicable in large areas within the Yukon, British Columbia, the Northwest Territories, Nunavut, northern Quebec, and northern Labrador.
For each and every procurement, PSPC must first determine whether any such obligations apply, and if so, how they will affect the procurement strategy. The determination is applied by answering a series of questions—i.e., does the proposed procurement involve goods, services, real property, or construction in a geographic area subject to one or more treaties? Although the obligations are not identical in the various agreements, they are all aimed at enhancing economic opportunities of the indigenous groups benefiting from the agreement in their settlement areas. In 2016-17, a total of 365 federal contracts were awarded to indigenous firms in modern treaty areas, with a contracting value of approximately $31 million.
Ms. Murphy provided a detailed overview and a handout on the procurement strategy for aboriginal business, PSAB, so I do not propose to go through the material in detail. I would just like to highlight the following points and share some examples of procurements awarded through PSAB.
PSAB is intended to encourage aboriginal suppliers and the federal government to do business with each other. A contract that is set aside under PSAB means that only aboriginal businesses registered with INAC are acceptable bidders. The decision to use PSAB, where applicable, rests with the client departments. PSPC's role is to help its client departments identify and define indigenous opportunities in their business requirements or scope of work. Under PSAB, as in all our procurements, open competition is the default, both in regulation and in practice. Bids are prepared and submitted by aboriginal businesses, and are evaluated in keeping with the principles of federal government contracting, which are fairness, openness, integrity, and best value.
As a reference point, between 2009 and 2015, PSPC issued approximately $500 million in total contract value for 1,265 PSAB contracts. The highest-value contracts under PSAB are typically found in the following commodity groupings: health services, construction, accommodations, office supplies, IT equipment and software, and informatics professional services.
In circumstances where the prime contractor is not an aboriginal business, the PSAB allows for socio-economic benefit clauses, such as indigenous participation components to be incorporated into its procurements. For example, client departments may designate that a proportion of subcontracts on projects be reserved for aboriginal business, or that additional evaluation points be given to the bid to incentivize the hiring of aboriginal suppliers and subcontractors. However, the inclusion of aboriginal suppliers or subcontractors must be clearly identified in the solicitation as an evaluation criterion.
We are encouraging aboriginal firms to create joint ventures with other aboriginal or non-aboriginal firms in bidding for federal government contracts. If a firm is starting a joint venture, at least 51% of the joint venture must be owned and controlled by an aboriginal business or businesses. A firm must demonstrate a level of aboriginal content amounting to 33% of the value of the work performed by the aboriginal business.
I thought it would be helpful to quickly highlight some of the PSAB procurements underway.
In March 2016, as part of the Centre Block Rehabilitation Project, two professional services contracts were awarded to indigenous firms; one was awarded to the Mobile Resource Group Inc., for the provision of real property management support services valued at $750,000. A second contract was awarded to the Naut'sa mawt Resources Group for the provision of leadership development services, valued at $345,000 to date.
Public Services and Procurement Canada, or PSPC, has several air carrier agreements with indigenous owned airlines, including First Air, Canadian North, Wasaya Airways and Yukon Air North. In 2016-2017, federal spending for these air carriers totalled approximately $10 million.
The contract for the Canada Student Loans Program contains a voluntary set-aside in which the prime contractor selected under a competitive process entered into a relationship with Tribal Wi-Chi-Way-Win Capital Corporation to manage the customer contact centres for the administration of the program.
I spoke earlier of how we seek to encourage joint venture partnerships between indigenous and non-indigenous firms. One example of this was the recent Esquimalt graving dock remediation in BC, valued at approximately $28 million. The indigenous firm Malahat Nation and the non-indigenous firm Quantum Murray combined to do business. The Malahat nation derived economic benefits through this relationship and members of the Malahat nation were involved in the performance of the work. This enabled the indigenous firm to acquire training and experience in the field of marine sediment remediation. Indigenous Services worked closely with the PSPC regional office to provide a PSAB set-aside for the project.
Canada's national shipbuilding strategy provides economic benefits to communities across Canada, including for indigenous peoples. For example, the Canadian shipyards have trained approximately 1,500 indigenous people as ironworkers and sheet metal fabricators, which are highly skilled and marketable trades.
PSPC's office of small and medium enterprises, OSME, is instrumental in outreach efforts to build capacity in indigenous enterprises, and to provide information and tools on how to access federal procurement opportunities with the objective of bringing more indigenous enterprises into the supply chain.
Ongoing OSME activities include seminars, one-on-one meetings with indigenous suppliers to explain how government works, how to identify opportunities in the procurement process, and how to compete. We host indigenous-specific events during the course of the year to match businesses interested in partnering. OSME's MOU within INAC allows for the coordination of indigenous outreach at a national level, and for indigenous-specific events to take place.
Last year, OSME participated in over 120 indigenous events held locally in many Canadian communities, and reaching more than 2,300 individuals or SMEs. Over and above local and regional events, OSME networked at the annual Assembly of First Nations conference, partnered with the Canadian Aboriginal and Minority Supplier Council, and collaborated with the Canadian Council for Aboriginal Business to deliver a national webinar on doing business with the government, including how to obtain security clearances.
OSME's outreach helps identify, analyze, and reduce the barriers that can make doing business with the government unnecessarily difficult for indigenous suppliers. We share this feedback broadly for the awareness of relevant stakeholders.
Taken together and over time, these measures are intended to increase the capacity of indigenous firms to compete and participate in government contracts, and increase indigenous economic development.
Thank you, and sorry we're late.
I recommend that you recommend to the Speaker that we get an RFP to get some signage in here so people know where they're going. Every floor, you get up there and there's nothing.
Anyway, thank you for inviting us to appear.
We'll talk a little about PSAB, and what it is and what it isn't. Our biggest concern with the procurement strategy, apart from the lack of informatics and the difficulty in bidding through the existing system, is that we don't think the procurement strategy goes far enough. We've been arguing for Public Works to include new tendering instruments with large procurements.
In the past what we've done.... For example, for non-insured health benefits claims, which primarily benefit first nations, there's an outsourcing of all the back end of the claims processing. In that contract, because it affected first nations, we put in a minimum indigenous requirement of 20% of the contract. All of these claims processors are big U.S. companies. I think we have one Canadian company that does it out of Halifax, so without that minimum indigenous requirement, there would be no benefit to indigenous people.
If we look just across the street here at all the major capital projects we're doing, even on Parliament Hill, there's no minimum indigenous requirement. Contractors are urged to try to set some targets or whatever. We have construction going on the Hill for the next decade. We could create a hundred indigenous masons and support a lot of indigenous companies, but we don't put in a minimum requirement.
My ex-wife manages the West Block building. There are no natives working there because the companies don't have to. We don't put that requirement in there.
Now in the private sector, we're getting the Enbridges; everybody in the oil patch is giving minimum indigenous requirements in the contracts. We don't put that requirement in there.
We have the Supreme Court building coming up. It's a $2-billion build. That's around the corner. We look at 100 Wellington. We thank the for giving us that building. We said we wanted the building, but we also want the construction on that portion of the building. Renovating that building and building the back part right out to Sparks Street is going to be about $100-million build—something like that.
Three weeks ago, Public Works came out with a tender for precinct two—to do all that work at precinct two—for project managers. The project managers are limited. They got this thing so jacked up.... It was first out for a three-week tender, so only the incumbents could win. They expanded that. Then, you have to have your local resources in Ottawa, within a 50-kilometre patch of Ottawa. For Métis, forget it. We're out.
We have done these minimum indigenous requirements in shipbuilding. You might have heard of the success of Membertou First Nation. They were successful because they got minimum indigenous requirements in the shipbuilding and some of the military contracts.
This government has put out a huge build on infrastructure. We should require that these companies have a minium indigenous requirement. That goes beyond just setting aside PSAB. Although, we would say, with 100 Wellington, that build should be set aside just for indigenous contractors. Yes, they'll probably have to enter into JVs, but at least they'll get a piece of the action.
Right now, we have all of this work that's going out there. There's no indigenous requirement. You're not really helping indigenous business. You have to remember about indigenous business that while it's growing, it's not diversified. It's not large enough to participate in these contracts. When we've done all these bundling contracts like we're doing, indigenous people have no chance to get in them.
We run a $65-million construction company. We did Manitoba Hydro. We did a $21-million directly negotiated contract. We created the company. It did another $40 million. It won the bids. Now it has 15 joint ventures with Enbridge for Line 3. That's because we started with a procurement system. We made sure that this time there was going to be something for the indigenous people. We started that, and we built it.
That's really what we need to do. There are lots of things we don't like about PSAB. When it first got going, there were a lot of 51% shell companies that were indigenous in name only. In the United States, they have section 8(a), where the government has a legislative mandate to set aside contracts for minorities, Native Americans, and women.
They have a whole business office in the Department of Commerce. They have a good supplier development system there, where they actually work with minority companies to build their quota, just as I talked about with our experience. We don't have that here. We have a few bureaucrats who you just heard from here. I raised, for example, 100 Wellington with the deputy and with the chief of staff for the minister.
I said, “Why is there no requirement for any indigenous involvement in project management for that precinct?” They said they'd get it fixed. It's four weeks later. Yes, okay.
On PSAB, everything is like.... It's a duck; everything falls off the side of that thing. It's not that it doesn't have potential, but the way it's operated now, it's not focused on the larger stuff. It has no capacity development system. Having a couple of bureaucrats go to some conferences and tell them how easy it is to get procurements.... I'm in that business as a consultant. I've won a dozen; I've bid on fifty. I know how hard it is.
It helps when it's the PSAB system, and we should expand the scope of it, but it's not going to get us to where the really big contracts are: shipbuilding, federal infrastructure, and the like. It extends to services: call centres, tax collectors, employment insurance people, that sort of thing. We need to open up some of that system. We are direct-delivering employment programs. The government of Canada did it for the last 20 years. We've done it better, with better results and at a lower cost. When we look at procurement for all our call centres and service providers, we would be happy to negotiate an effective and rewarding contract for both of us on any of that stuff.
The Métis are primarily western Canadian. We represent the Métis Nation, and we are very proud of that. In two years, we'll celebrate our 200th year since negotiating Manitoba into the Confederation. We are really looking forward to that. We participated in the Canada 150 celebrations. We are very proud Canadians, and we are very entrepreneurial. We are looking for work and for contracts.
I would like to bring you a perspective of the modern treaty holders. I think a lot of what was said was quite helpful and we agree with. The Tlicho agreement is a modern treaty, protected under section 35, and it includes both self-government and land claims. It's the whole package together.
I had the privilege of sitting at the negotiating table for 10 years to help build that agreement. I had the opportunity to build into the Tlicho treaty what the “economic measures” are that form chapter 26 of that agreement. The way that chapter works is that it really sets out some large objectives. Then it talks about tools, about how you will get there. Fundamentally, I think, for the purposes of PSAB, one of those objectives was that Canada's programs, and also those of the Government of Northwest Territories, should be built to foster Tlicho self-sufficiency. It then goes into specific measures about how that self-sufficiency will be achieved, including following the preferential contracting policies intended to maximize local, indigenous, and other kinds of contracting opportunities.
When I sat at that table, PSAB was brought to us in that negotiation as, look, this is the kind of economic tool that Canada will use to ensure that you have this opportunity to participate in these large economic opportunities. But my experience has been, over the last....
The Tlicho are now, is it, 11 years post effective date?
Ms. Bertha Rabesca Zoe: Twelve.
Mr. Colin Salter: It's 12. Thank you, Bertha.
From my experience, we've rarely been able to tap into PSAB. I think there's a bit of a disconnect going on. PSAB as a design, as a program, is a very good idea, but because of the way in which it's operationalized, it doesn't result in enough of the significant business opportunities available in the Tlicho area to actually fall within the ambit of PSAB. In fact, very few opportunities ever get to touch PSAB. There are certain rules inside the PSAB policy itself around when “mandatory” applies. I would encourage this committee to really look at those rules. The policy is mandatory, but then there are numerous interpretations and opportunities for it not to apply. Is the indigenous party the primarily affected group? Will they feel the direct benefit?
In the Tlicho region, the biggest opportunities are reclamation opportunities. The Tlicho Government has created the Tlicho Investment Corporation, a business of over $100 million. It's been servicing the diamond mining industry primarily. Reclamation is a huge part of what we do. It would be wonderful if those reclamation opportunities could fall within the ambit of PSAB. Unfortunately, the issue we run into with regard to the application of PSAB in those kinds of opportunities is that with reclamation, it's hard to prove that the primarily affected people are the indigenous people. A reclamation opportunity, of course, is for the benefit of all Canadians as well. Some of these messes are quite unbelievable; Giant Mine is coming up.
I think if PSAB is going to be an effective tool to live up to the treaty commitments, then really it needs to find a way where we're not relying on a departmental interpretation to exclude its application. It's worth noting that in the Tlicho treaty, there's a treaty right that for all federal procurement, you will in fact follow your policies. Those are the policies that would explain to us.... The on-the-ground implementation of this is that the policies are followed, but then the interpretations take the contracts out of the preferred approach, out of PSAB.
Ultimately we had a grand bargain about how we would attain self-sufficiency and bake that into the treaty, but in the application of the policy itself, which, of course, is of far lower importance than is the constitutional promise of chapter 26, it's not playing out as we would like.
We have a couple of ideas on how to fix it, and we would be happy to share those with the committee.
Colin gave a good outline of the Tlicho. The Tlicho are located north of Great Slave Lake just 100 kilometres north of Yellowknife. We have a huge track of land. We own 39,000 square kilometres, which is about half the size of Nova Scotia. Our traditional territory is called Mowhi Gogha De Niitlee—and I was hoping to circulate a map for the committee members. They are going to do that once they translate that into French. The traditional territory of the Tlicho is huge. It takes into account the borders of the partnering first nations that have land claims.
When you look at the map, you will see that there is what I call patchwork where the Inuvialuit, Gwich’in, and Sahtu have land claims, and they have surface and subsurface rights in certain blocks of land, but the Tlicho is a single block of land that they own outright.
We're very interested in the PSAB, because, as Colin said, we have 100 million dollars' worth of a company that has done a lot of work. What has PSAB done for the Tlicho in the last 12 years of the land claims? Nothing. We have not been able to use PSAB for any of our procurement work, especially in the remediation work. There are lots of abandoned mine sites in our traditional territory. Giant Mine is the major one right now. It needs over $300 million to $400 million worth of mine cleanup.
We can honestly say that PSAB has not been applied in our claim area, in our settlement area, in our Mowhi area through our agreement. I know this because I've been heavily involved in the implementation of the land claims prior to effective date, which is over 12 years, and I've worked with our companies to try to secure contracts using PSAB, but we have not been able to.
At one point I was told that PSAB doesn't apply to land claim areas. I said, “No, I don't think so. You need to read our agreement and what PSAB says.”
I think the committee needs to understand that even though it exists out there, some of us haven't been able to use PSAB because its application has been very discretionary in our region, as far as we're concerned.
I don't know if my time is up, but as Colin said, we do have some suggestions for fixing that. One is to not have discretionary application. As well, there are too many rules as it is right now. The interpretation of PSAB is also something this committee needs to consider.
Basically, I think overall it's a sound policy, but it hasn't been applied. As I said, it was very discretionary, in our region anyway.
Thank you for having us. My name is Max Skudra. I'm from the Canadian Council for Aboriginal Business. I'm the director of government relations and research. I'd like to recognize that we're on the traditional territories of the Algonquin people. It's great to be here. It's colder than where I'm from in Toronto, but I guess it's Canada, so why complain. Sorry, I should say, don't hold it against me that I'm from Toronto, please. I'm shooting myself in the foot with that one.
CCAB has been around for over 30 years. We're an aboriginal business council representing over 500 members, 70% of whom are indigenous companies. We have a number of programs and policies, which I don't have time in the 10 minutes to talk about, so I'm going to get right into what we think about procurements and some of the work we've done.
We've been doing research on this issue for over five years now. As was mentioned in the previous presentation, we put out our “Promise and Prosperity” report. I did this, so I'm very proud of it actually, if we're being honest. We have it in French, as well as English, if anyone on the committee would like it. We interviewed over 1,100 aboriginal businesses. We've done this twice in five-year segments, so we have very good longitudinal data on aboriginal businesses and what they're doing. The inside joke is that I harass more aboriginal companies and business people than anyone else in the country with phone calls and interviews.
To build on a point she made earlier, the real high level is that aboriginal business is booming in Canada. In the last five years, we've seen a 15% increase in the number of profitable companies coast to coast to coast. Those companies have also increased in their actual profitability, so both more profitable firms and more-profitable firms. We think that this is a dynamic and a momentum that is just building. You're seeing increased innovation, increased optimism, and increased trade in almost every sector and in every province and territory.
This kind of renaissance that you're seeing right now is creating an indigenous economy in Canada worth over $30 billion, with $12 billion in the businesses alone. That's both privately owned firms, as well as community-owned corporations. These companies are doing everything from graphic design to major energy plays in Alberta. Some research we've done with TD Bank estimates that there are roughly 43,000 indigenous companies in Canada and I think that we are going to revise that upward, based on the most recent census data.
These are all really positive overall trends and I think you've seen some really progressive work on the government-side around PSAB trying to support that growth. I should just say that PSAB is something that generally we support. We think it's a great idea. There has been some great work done to support indigenous businesses. You'll see single years where there's $60 million or $80 million or $100 million being done between the Government of Canada and indigenous businesses. Stand alone, that's great. I think it's when you look at it in context that it becomes a little less stellar.
If you look at some of our partners in the oil sands, for example, Imperial Oil is doing $220 million-plus with indigenous suppliers, Syncrude is doing $300 million-plus a year, and Suncor is doing over $400 million a year with aboriginal companies. Among them, they're doing almost $1 billion of work a year and that's three companies in one region of Canada. Contrast that to what's being done nationally by PSAB, keeping in mind that the federal government is the largest single purchaser of goods and services in the country, and I think there's obviously room for improvement.
I think that this really plays into renewing the fiscal relationship discussion, as procuring goods and services from aboriginal companies gets directly to small business owners and SME business owners from coast to coast to coast.
I would agree with the comments made earlier that, among the biggest hurdles are some of the definitional issues, where companies won't have access to PSAB. I recognize that obviously, Canada's federal procurement has to stay within international trade agreements, but I would say that the application of the set-asides is probably a little more conservative than it could be and I think it could be used a bit more widely. That alone, I think, would see a significant increase.
The other points that I think CCAB has seen—and we work with all sorts of firms, aboriginal and non—is that while PSAB directly targets aboriginal companies, what I think is really critical is that we start to have larger contracts, for example, the shipbuilding with Seaspan, that have explicit language that ensures that throughout the supply chain, there's a focus on engaging aboriginal companies.
I can tell you what Suncor has done with Sivio to its supply chain. That's the best practice in corporate Canada today. It's to ensure that tier-one suppliers, the first purchasers, are looking not only at who they're buying from but who those people are purchasing from, and making sure that there's a real and sincere effort, and a trackable and measurable effort, that's accountable, that ensures throughout the supply chain there are aboriginal businesses present.
As we've heard earlier, and I agree 100%, the majority of aboriginal companies are relatively quite small. To think that the federal government, on a major contract, is going to be able to directly hire, for a $30-billion shipping contract, an indigenous business is unrealistic. We've been in a number of conversations with senior leadership in the defence sector, and many of them will say they'd be happy to but these contracts are so competitive that unless there's explicit language saying they need to or they'll be incentivized to, they won't because doing so would put them at a competitive disadvantage on a very lucrative contract.
The one thing CCAB would like to recommend is a focus on supply chain and ensuring that large purchases and large contracts that go to non-indigenous businesses have language that ensures that aboriginal businesses are included throughout the supply chain. That's the first thing.
The second thing is absolutely opening up the procurement to small businesses directly, specifically at around the $100,000 mark. That's where the majority of small aboriginal companies are looking for contracts. At that data point, roughly—and, plug, we're doing more research so we'll have more information for you on this shortly—that would really open things up.
The third is facilitating joint ventures and ensuring that aboriginal companies are incentivized to work with corporate Canada and that those structures see some support from government.
Now that I've eaten up all the time....
Two minutes, thank you very much, Chair.
My name is Josh Riley. As you might have picked up from my accent, I'm from Australia. I'm an Australian aboriginal. It's definitely a lot warmer there than it is in Ottawa. It's much colder here, as Max said. As a Wiradjuri person, I'd just like to acknowledge that we're on Algonquin territory, and also acknowledge all the indigenous people here today, and thank you for inviting us to share our perspectives as well.
Following on from what Max said, we've also been doing some work with INAC and our members to increase our procurement in the private sector. I think there are learnings that we've taken from our research and our approach that might be of benefit to add to this conversation here as well.
At the start of the year, as Max said, where it's all coming from, there are some great things happening in aboriginal procurement in the private sector as there are also in the public sector, but there's opportunity to do a lot more. We did some research at the start of the year to look at what are some of the challenges and needs between aboriginal businesses and our corporate members and non-members as well to make more aboriginal procurement happen. Twenty-five per cent of the respondents said they would like to see stronger procurement commitments from aboriginal corporations, and 22%, interestingly, said they're looking for direct connections to procurement officers in industry and government.
We've recently, as of last week, received some funding from INAC to be able to develop a strategy that is looking at getting corporates to collectively make more and stronger procurement outcomes for aboriginal businesses, creating a marketplace where corporations can find aboriginal businesses to integrate into their supply chains. But it's then also for those $100,000 and less procurement opportunities that aren't often publicly available in portals, making those available and visible to aboriginal businesses as well, and sharing best practices also.
We developed this approach from looking at some successful models from around the world, particularly ones I've had the privilege of being involved with in Australia, such as Supply Nation. Off the back of the success of the Supply Nation model in Australia, I just wanted to share a little bit about the Australian government's procurement policy, which has resulted in $594 million in aboriginal procurement over the last two years.
I think that's my time there, so I'll be happy to answer any more questions, and thank you very much.
The biggest recommendation I have is for the government to start applying the minimum indigenous content requirement, or supply chain, as he refers to it, to these larger contracts. We've done it in the past, and we've had push-back on it sometimes for the non-insured health claims: “We can't do that, because there's no native business that can do it.” Let's have an RFI so we have a request for information, and everybody comes, and all these claims companies from the U.S. and Canada say they'll do it. What's the number, 15%, 20%? It's the same thing in all the construction stuff. It can be done. That's what is being done in oil and gas. It's being done with the big crowns.
In fact, these guys have a program called the progressive aboriginal relations program. It's a self-directed program. These companies go there, and they get measured: how many natives you have working; how many contracts you have with them; what is the structure of the employees as to where they fit in the organization; and what's their community involvement? If you put PSAB and the Government of Canada through that program, they'd be hard-pressed to even get bronze status, and you can go all the way up to platinum.
What this committee is doing is the same thing. How are you measuring it? We said the same thing. We encouraged Indigenous and Northern Affairs 10 years ago to take the same sort of thing with PSAB and apply it to the federally regulated companies, the Fortune 500, in Canada. All of them are required, under the Employment Equity Act, to ensure that they're paying attention to natives. Some of them do it well and some don't, but it's the same thing that these guys are advocating.
Another group I'd urge you to meet with is the Canadian Aboriginal and Minority Supplier Council. All it does is advocate for procurement for minorities and for indigenous people. It has lots of experience coming out of the United States, and we help support them.
We need to get corporate Canada, as these guys are saying, to pay attention to their contracting practices, just like the Government of Canada, but you guys can do something about the Government of Canada now, and all I'm recommending is this. Why don't you apply that minimum indigenous content? Why can't we have natives working on the Hill across the street? And everyone goes, “Yeah, yeah, yeah.”
I went to the ministerial advisory board, the National Aboriginal Economic Development Board. I go to them, and they say, “Yes, we should do that“, then everybody leaves the room, and then you get contracts, RFPs come out, like on precinct two, and it's like the word “indigenous” doesn't work. “Just give them that building right in the middle, but don't talk to them.”
In the Northwest Territories, we have the oil and gas activities in the north, and we have the mining activities, the diamond mines, in the south. For us, using ASETS, the mining companies, Aurora College, and the Mine Training Society have been doing a lot of training programs for underground miners, and training for working at the mines. I think that's been very successful, so we have a lot of skilled workforce in those areas.
I want to say a few words on what my friend was saying about minimum indigenous content. My experience was in working with Indian Affairs and Public Works on what we call the ABPs in the RFPs. The ABP is the aboriginal business plan that goes into these RFPs, which is usually about 25% of the proposal. I think that's what you were talking about. This is the closest we were able to get involved in how to plan so that aboriginal businesses are able to get into the contracts.
This is where we were having problems. Even though you have a minimum indigenous content or aboriginal business plan in these RFPs, they weren't working. For example, if contractors are successful and they are not indigenous contractors, and the ABPs require them to hire so much percentage of indigenous peoples, basically there's no way to make sure they're meeting those obligations. They could phone one of our offices and talk to the career development office and say they need this type of skilled worker. However, all they're required to do is reach out. There is no requirement to ask, “Okay, have you hired the skilled workers according to this?”
I think there needs to be a stricter guideline. If indigenous people or indigenous businesses aren't able to successfully bid, or if they're not satisfied that.... You've seen these contract bids. When it comes to the RFPs and the aboriginal content, it needs to be more enforceable.
I was involved in the drafting of those numbers to try to make it more favourable, but after involvement with a couple of those, I was told I couldn't be involved anymore. I don't know what happened to them after that. The bottom line is that Tlicho have not been able to use PSAB in our region, and even the RFPs, the 25% aboriginal content, isn't working at all for us.