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View Rachael Harder Profile
CPC (AB)
Thank you.
Minister, you and Minister Anand have talked a lot about the importance of our relationship with indigenous people. Originally in her mandate letter, it was set out that she would allocate 5% of all procurement contracts to indigenous-led businesses. You've talked about the importance of that, even here today.
Unfortunately, when it comes to procuring anything, really that rate is actually only 2%. It's 2% of all procurements that is being allocated to indigenous-led businesses, which is a tremendous failure in comparison to the 5% set out in the original mandate letter. In the meantime, a sole-source contract was awarded to China for PPE.
Why wasn't there a competitive process, and why wasn't opportunity given to indigenous-led businesses?
View Jean-Yves Duclos Profile
Lib. (QC)
Thank you, Ms. Harder, for asking the question.
I suppose and suspect you were there at the beginning of the meeting when we talked about the importance of thinking about procurement in a broad way, taking into account both the important advantages of providing services and goods to Canadians through appropriate procurement and also the economic advantages, the fact that we want procurement to be increasingly green procurement—
View Jean-Yves Duclos Profile
Lib. (QC)
That's exactly where I was going, because past the green procurement supply chain that we want to build, there is the social impact of procurement and supporting indigenous—
View Rachael Harder Profile
CPC (AB)
Why was a sole-source contract given to China instead of an indigenous-led business? They were deliberately ignored.
Roger Ermuth
View Roger Ermuth Profile
Roger Ermuth
2021-06-16 17:05
Mr. Chair, in terms of procurement strategy and what was purchased in PPE, especially during the early days of the pandemic and so on, I would defer to our colleagues at PSPC in terms of what the rationale was there.
In terms of the social procurement, obviously a lot of work is going on and obviously a lot more work still needs to be done. There has been, in terms of the Nunavut agreement, some work done up north, some really big steps up north. Ongoing work with Indigenous Services Canada, PSPC and indigenous reference groups is going on to look at how we can move this forward.
Finally, I would note that the recently released Treasury Board directive on the management of procurement has also re-emphasized or refocused procurement planning to look at market access and allow socio-economic priorities.
View Tamara Jansen Profile
CPC (BC)
First, Mr. Easter, over this time that we've been working together, I have detected a farmer's heart in you, and I'm very thankful for that. When you were going to make an announcement, I thought that maybe you were going to cross the floor and come to the good side.
Voices: Oh, oh!
Mrs. Tamara Jansen: It has been a pleasure to work with you. Thank you very much.
Now I'll go back to the matter at hand. Mr. St-Jean, we are here to evaluate the CRA's progress in regard to tackling tax evasion. I want to go back to 2015, when Prime Minister Trudeau said that the wealthiest Canadians were using small business tax rates to reduce their tax bills. He was basically calling small business owners tax cheats.
At the time, I was one of those people out there delivering flowers to customers in the heat of the summer, sweating it away in the old Hino truck with no air conditioning, which was, according to him, nothing more than a clever tax haven. I have to say that I was really insulted, as I believe many other small business owners were.
Now here we are in 2021, and the Liberals have thrown billions of dollars at the CRA to expose these supposed small business tax cheats. I know that the CFIB said at the time that his assumptions were seriously flawed, and so far there appears to be no evidence whatsoever that he was right. Does it make any sense for the Liberals to have developed this tax policy and hired so many new staff based on those assumptions, especially when we see that the CRA makes deals with the big tax cheats but keeps going after the little guy?
Charles-Antoine St-Jean
View Charles-Antoine St-Jean Profile
Charles-Antoine St-Jean
2021-06-15 17:00
Thank you very much for that question.
I think we saw that the last budget was talking about investing a lot more money in tracking the tax data, getting better systems and getting more legal firepower to the CRA to help combat tax evasion. This is the way we read the announcement from the government, which we support, but I will let my colleague Bruce Ball comment especially on the small business tax.
Bruce Ball
View Bruce Ball Profile
Bruce Ball
2021-06-15 17:01
Maybe I'll start with the first part of the question. I do know that a lot of businesses took exception, I guess, to the suggestion that they were somehow doing something wrong, and I'd agree that the majority aren't.
The issue is the underground economy. There are still business people and other people doing activities in the underground economy. Over the years we're working with CRA in trying to find ways to have these individuals or these companies come forward. Typically they're individuals, because corporations can be tracked, and there will be more of that with the registry, but it's to have these individuals come forward. We've been talking to them about education and taking advantage of the voluntary disclosure program and that kind of thing.
In addition to the money for verification, I think it's also important for the government to continue to try to get people out of the underground economy and to come forward and become compliant taxpayers.
View Tamara Jansen Profile
CPC (BC)
I couldn't agree with you more. I know that we've been very thankful to have accountants who were honest and wanted to help us make sure we could sleep at night because we did the right thing.
Last week at the finance committee, I asked the CRA's Ted Gallivan why they were continuing to target small business owners with audits during a pandemic, and he proudly told me they had initiated a six-month pause on those audits. Considering that this pandemic has been going on for more than 15 months, would you say that aggressive audits are just another way of going after the easy target rather than the big tax cheats?
Bruce Ball
View Bruce Ball Profile
Bruce Ball
2021-06-15 17:04
I was listening to the conversation last week. I'm not sure that they were auditing small businesses generally.
What Mr. Gallivan said agreed with what I thought. They were doing reviews of the assistance programs, so maybe that was part of it. They were reviewing the wage subsidy applications and later the rental applications. I'm not quite sure what the audit activity would be if it wasn't around some of the support programs.
View Pierre Paul-Hus Profile
CPC (QC)
When you have a contact, it can work, but when you don't, you're left spinning in the void.
In the beginning, the government [Technical difficulty—Editor]; we understand that. The situation was urgent.
However, when the government asked everyone in Canada to make an effort, everyone did. When we realized that they were buying products from China or elsewhere in the world, we didn't understand why, since Canada has products to offer. It's problematic, obviously.
Mr. Dyck, you mentioned on December 11 that it was obscene. That's what we read in an article. You mentioned that everyone had set up their equipment, their production and you had kept your staff instead of asking for subsidies.
In your opinion, did the government fail to help SMEs? On the one hand, some SMEs closed down and applied for subsidies and waited. On the other hand, and this is your case, you made a big effort, but you lost out?
Is that how you see it?
Tyler Dyck
View Tyler Dyck Profile
Tyler Dyck
2021-06-14 17:18
Yes, I do think it ends, speaking not just for ourselves but also on behalf of the other distillers. I think they feel very disheartened. This is not the Canada they stand for. I think we're all brought up to treat people well and to do our best, and with the idea that if we do good things it's not that we're doing them for a reward, but that there might be some recognition. However, when that recognition goes to big multinationals that are just that much more sophisticated, I think if you asked most people out here, they'd say, “Well, they must have had contacts in government.” That's a cynical stance, and I always hate that portion of it, but I don't know how else to explain it. You have people doing the right thing who are asking for really nothing other than to be allowed to continue doing the right thing. It's hard to explain.
View Majid Jowhari Profile
Lib. (ON)
Thank you, Mr. Chair. I'll be splitting my time with MP Drouin.
Let me start by thanking both witnesses for their commitment to Canada and Canadians and for making sure that they kept all of us safe. Thank you very much.
I have a quick question. I'm going to follow the line of questioning that Ms. Sahota started.
Mr. Guitor, can you share with me whether you had the opportunity to work with the office of small and medium enterprises, which helps with soft landing for a lot of organizations with Public Services and Procurement Canada?
View Tamara Jansen Profile
CPC (BC)
Yes. Thank you.
You were just mentioning that we have grown by 15%, but we haven't seen any actual increases, which is disappointing.
Debi Daviau, President of the Professional Institute of the Public Service of Canada, suggested at the finance committee that CRA's focus should be on wealthy individuals and powerful corporations who do the majority of the cheating.
I had asked her why CRA appears to be aggressively focusing on small mom-and-pop shops for audits during COVID and ignoring the wealthy individuals. She identified this actually as a real problem. Her response was the following:
I just don't think the Canada Revenue Agency is up—
View Tamara Jansen Profile
CPC (BC)
I'm going to quote her:
...I just don't think that they have the same capacity to address international taxes that they do to address local taxes. ....certainly employees at the Canada Revenue Agency are up against, as I said, tax giants. These are people who have immense skill, technology, expertise and other big companies on their side.
It's interesting to hear how your testimony today asserts the complete opposite on how well CRA is doing on chasing down wealthy overseas tax cheats.
With the number of dollars that CRA has invested over the last years, why didn't you invest in the tools you need to go after the big guys rather than focus on those little mom-and-pop shops, especially during a pandemic?
Ted Gallivan
View Ted Gallivan Profile
Ted Gallivan
2021-06-10 16:48
Thank you, Mr. Chair.
Let's start with one of the premises, which was COVID. During COVID, my colleague Alex MacLean, who looks after international tax and large business, never stopped. They never downtooled those audits. We continued to focus on those taxpayers while giving six months of a kind of hiatus on contact for small businesses.
The CRA did suspend its small and medium-sized enterprise audits for a full six months, and when we resumed, we did so on a more consultative basis, checking in with businesses to see if we could start.
It would be my testimony today that during COVID the situation has actually been the the opposite of the testimony you would have received. The CRA never stopped its work on high-net-worth individuals and big companies through COVID. We made a deliberate pause because we understood that small businesses were suffering during COVID. When we resumed, we tried to make it a more consultative process based on the readiness of that business to withstand an audit.
Alexandra MacLean
View Alexandra MacLean Profile
Alexandra MacLean
2021-06-10 16:49
Thanks very much, Mr. Chair.
I just wanted to add how seriously we take our mandate in international and large business directorate. We have been staffing up and we have been focusing on training. As the member indicated, we are challenging very well resourced interests that have very well qualified advisors. They have very deep pockets. There is a strong focus on improving training and making sure our people are well equipped to take on the most challenging and complex tax situations.
We have also invested a lot in information technology. I think Mr. Gallivan has touched on that in some of his answers. The amount of data coming into the agency is better than it has been in the past by quite a lot. We're better able to detect relationships and transactions than we were in the past, for sure.
However, it is a challenging business. There's a lot of money at stake, as many people have mentioned during this afternoon's proceedings. A lot of resources are deployed, I guess, on both sides, but particularly in the interest of high-net-worth individuals and multinational enterprises.
I wonder if my colleagues from Finance want to highlight.... We are quite excited about some of the budget 2021 initiatives that will help us deal with base erosion.
View Robert Kitchen Profile
CPC (SK)
I call the meeting to order.
Welcome to meeting number 36 of the House of Commons Standing Committee on Government Operations and Estimates. The committee is meeting today from 5:44 Ottawa time to hear witnesses as part of its study of businesses owned by under-represented groups. We have the full two hours to do the meeting and we look forward to hearing from our witnesses.
I'd like to take this opportunity to remind all participants at this meeting that taking screenshots or taking photos of your screen is not permitted.
To ensure an orderly meeting, I would like to outline a few rules to follow.
Interpretation in this video conference will work very much like in a regular committee meeting. You have the choice at the bottom of your screen of either “Floor”, “English” or “French”. Before speaking, please wait until I recognize you by name. When you are ready to speak, click on the microphone icon to activate your mike. When you are not speaking, your mike should be on mute. To raise a point of order during the meeting, committee members should ensure that their microphone is unmuted and should say, “Point of order” to get the chair's attention.
The clerk and the analysts are participating in the meeting virtually today. If you need to speak with them during the meeting, please email them through the committee email address. The clerk can also be reached on his mobile phone.
For those people who are participating in the committee room, please note that masks are required for all staff at all times. MPs may remove their masks only when they are seated.
I will now invite the representatives of Aksis Edmonton's Aboriginal Business and Professional Association, Mr. Sinclair or Ms. Suitor, to make their presentation.
Mr. Sinclair, we can't hear you.
Philip Ducharme
View Philip Ducharme Profile
Philip Ducharme
2021-06-09 17:49
Good afternoon. My name is Philip Ducharme. As director of innovation and entrepreneurship of the Canadian Council for Aboriginal Business, I want to thank you, Mr. Chair, and all the distinguished members of this committee for the opportunity to provide you with my testimony and to answer your questions.
Speaking to you from my home office, I acknowledge that the land is the traditional territory of many nations, including the Mississaugas of the Credit, the Anishinabe, the Chippewa, the Haudenosaunee and the Wendat peoples, and is now home to many other first nations, Inuit and Métis people. I am Métis, with all eight of my great-grandparents attached to Métis scrip, and I am a citizen of the Manitoba Metis Federation.
From the beginning of the pandemic, the federal government put out calls to procure personal protective equipment from businesses. As our president and CEO Ms. Tabatha Bull has noted during her appearances at House and Senate committees over the last year, numerous indigenous businesses were prepared and continue to be prepared to provide PPE to meet Canada's medical needs. Lists of such indigenous businesses were provided to many federal departments as early as March 2020, but only a small fraction of the over $6 billion in federal procurement contracts for PPE was awarded to indigenous businesses.
Over the course of the pandemic there were two RFPs that sole-sourced from indigenous businesses. In a press release of September 21, 2020, PSPC noted that seven indigenous companies were awarded contracts for non-medical face masks in one such RFP for a total of approximately $2.5 million, with an unprecedented 233 indigenous-led businesses responding. PSPC also reported that approximately $68.5 million in contracts had been awarded to self-identified indigenous businesses for requirements related to COVID-19. We understand through discussions with PSPC and through our own combing of publicly available data that this value is now slightly higher. However, we continue to be unable to obtain confirmation of the total spend to indigenous businesses on PPE.
To remedy this information gap, as suggested by Ms. Bull on February 22, I propose that this committee consider measures that would mandate government departments and agencies to report on their purchases from indigenous businesses as part of their submissions for the main estimates and the supplementary estimates. Simply put, we cannot evaluate and improve upon what we do not measure and report.
Through Supply Change, CCAB's trademarked indigenous procurement strategy, we have had continuous dialogue with indigenous businesses as it pertains to federal procurement. What we have learned is that indigenous businesses are very keen on pursuing opportunities but have had numerous challenges, including identifying those opportunities. With this in mind, we post all federal set-aside RFPs within our own aboriginal procurement marketplace.
Other challenges that indigenous businesses have identified to us include the complexity of the RFPs. A $100,000 bid requires almost the same amount of time and resources to respond to as a $10-million bid. In many bids, previous work history with the federal government is required, and without it the bid is non-compliant, making it difficult to garner new indigenous suppliers. Another key challenge we have heard is that there is no feedback on why a bid was unsuccessful. One of our indigenous business members responded to 32 federal RFPs without success, but without any feedback, they did not know where they needed to improve on their bid.
That said, I want to note that throughout my extensive career working with indigenous businesses and federal procurement, I can say that I've never had the opportunity of collaborating as closely with various federal departments, and in particular with PSPC, through OSME, as I have in the last year. Together with the various OSME regions, we have held numerous information webinars for indigenous businesses and will continue to do so. This collaboration helps indigenous businesses navigate the complexities of responding to federal bids and is one of the ways we continue to work with the federal government to support the mandate of achieving a minimum 5% indigenous procurement target.
Additionally, other measures to increase federal procurement from indigenous businesses should include ensuring that indigenous procurement targets appear in every departmental plan and every executive's professional management plan to ensure administrative leadership and fulfillment of the government's procurement targets for indigenous businesses. This change could be made administratively, without the need for legislation, through an amendment to the government's directive on performance management.
CCAB is committed to continuing to work in collaboration with the government, our members and our partners to help rebuild and strengthen the path towards reconciliation and a healthy and prosperous Canada.
Thank you for your time.
Donald (Rocky) Sinclair
View Donald (Rocky) Sinclair Profile
Donald (Rocky) Sinclair
2021-06-09 17:53
Good afternoon, Mr. Chair and committee members.
First, thank you very much for the opportunity to address the committee today.
My name is Rocky Sinclair, and I'm the CEO of the Alberta Indian Investment Corporation. We're an aboriginal financial institution located in Enoch Cree Nation. My comments today, however, will be in my capacity as president of Aksis, which is an indigenous business and professional association formed in 2013. We're located in Edmonton.
Although we have not engaged in a formal survey or study related to federal procurement opportunities for indigenous peoples in Edmonton, we are confident that there are common concerns with the procurement strategy that are applicable to the majority of indigenous businesses regardless of where they are located.
There are processes that can be overly complicated and difficult to navigate. That's known. Also, the reach of the procurement opportunities may not be getting to the indigenous businesses. There are limitations there, certainly. There are also concerns about some of the qualifying criteria that might be too limiting or stringent. That is also known.
For urban indigenous businesses, there are unique challenges, given that they are are typically stand-alone in nature and do not have a support system that may be available in other communities. Many indigenous businesses in urban settings are typically interspersed throughout the city and are not concentrated in one area; therefore, they do not have peer support readily available. Also, many of those businesses are owner-operator businesses. The proprietors are very hands-on and do not have the resources to navigate through complex program portals to look for opportunities.
It is our view that if proactive strategies are introduced, along with mandated targets and appropriate metrics, we will see improvements in the uptake of indigenous businesses in securing opportunities with the federal government, and we would recommend that consideration. If there are not significant and fundamental changes to the indigenous procurement strategy, the issues that indigenous businesses have had with the strategy since 1996 will continue.
I have a colleague who is with me, and she will provide further comments. She will take up the balance of my time.
Thank you very much.
Marnie Suitor
View Marnie Suitor Profile
Marnie Suitor
2021-06-09 17:57
Thank you, Rocky. I believe that's my cue to speak now.
Good afternoon, and thank you very much for the invitation to be part of this session today.
My name is Marnie Suitor, and I'm speaking to today from Amiskwaciy Waskahikan, which is Edmonton in Alberta, the heart of Treaty 6 territory and in Métis Region 4. I am a director of Aksis and I am also the principal partner of an indigenous-owned consulting practice known as In Synch Consulting.
Over the past 18 years, the majority of my focus has been on capacity building within indigenous communities, businesses and entrepreneurial endeavours. I have witnessed many entrepreneurs and department managers struggle with what I refer to as the end-to-end procurement process, whether that be at the front end when they they're searching for and identifying an opportunity to respond to, whether that's through the pre-qualification process, or whether that is in the contract and reporting management that is part of the project compliance.
It is a very tedious and onerous process, and it requires infrastructure to support and an expertise to complete the core elements of procurement. In many cases, entrepreneurs find that the return on their investment of time and resources just simply doesn't add up.
That said, I do believe that there are ways to streamline the process and to refine the policies and procedures to enable indigenous businesses to fully and meaningfully participate in the federal procurement process.
I want to thank you for allowing me to share these few thoughts and I look forward to participating as the session unfolds.
Thank you.
Shannin Metatawabin
View Shannin Metatawabin Profile
Shannin Metatawabin
2021-06-09 17:59
Thank you.
My name is Shannin Metatawabin. I am the CEO of the National Aboriginal Capital Corporations Association, or NACCA. I'm also a member of the Fort Albany First Nation of the Mushkegowuk nation. Thank you for the invitation to speak to your committee’s study of federal procurement before and after the COVID-19 pandemic.
Before I begin, I would like to acknowledge that—
Shannin Metatawabin
View Shannin Metatawabin Profile
Shannin Metatawabin
2021-06-09 18:00
I just want to acknowledge that I'm taking this call on the Mi'kmaq territory of beautiful P.E.I.
NACCA represents a national network of 59 indigenous-led institutions. Our members work with first nations, Métis, and Inuit businesses on a daily basis. NACCA is also one of six organizations in a national indigenous procurement working group formed in July 2020. Canada created our working group to coordinate advice on policy and legislative frameworks needed to achieve a minimum target of 5% indigenous procurement government-wide.
In these difficult times, procuring goods and services from indigenous businesses provides one concrete means to further economic and social reconciliation, yet over the past decade, opportunities for indigenous procurement seem to have remained unchanged. As far as we know, the high point was in 2014, with $227 million in indigenous set-asides, which was only 0.8% of total federal procurement that year. I say, “as far as we know” because one issue our group has identified is the lack of consistent, accessible data across federal departments.
Why do the opportunities remain so few, even with the 5% target upheld throughout the pandemic? Our research has revealed several factors.
The first issue is government policy and process. The benefits of indigenous procurement are not widely appreciated across government, and the current policy directs little spending to indigenous suppliers. The process itself is decentralized, which limits implementation of the 5% target to only a handful of departments. Added to this, departments are not required to report publicly on their targets, and there are no consequences for failing to meet them. There are few incentives to change, so things remain the same.
A second barrier rests with the capacity of the indigenous businesses to bid on government contracts. Many find the process difficult to navigate. Many are not registered with the aboriginal business directory, which is now managed by government. Also designed and managed by the government are the outreach strategy, training and tools, which do not meet the needs of our businesses.
A third barrier may be the criteria defining an indigenous business. The current criteria require 51% indigenous ownership and control and 33% of employees to be indigenous. Taken together, these two requirements are hard to achieve, and some indigenous businesses may be excluded.
Then what is to be done? Our working group has identified four solutions:
First and above all, increasing indigenous access depends on having mandated government-wide targets. Setting a target of 5% across departments was a crucial first step, but it will exist only on paper unless the monitoring and supports needed are also introduced.
Second, monitoring is key. Canada needs to improve its data collection, reporting and governance of the process to drive results. The federal government needs to increase its transparency government-wide so that we have an accurate portrait and indigenous oversight.
Third, meeting the target will require streamlining and demystifying the procurement process to make it more accessible. The process will need to address specific barriers that prevent our businesses from participating, including any introduced by the definition of “indigenous business”.
Fourth, the indigenous institution has to lead in identifying, advancing and delivering tools and services to support implementation of the target. Our business owners need an indigenous-led centre they can trust to develop a comprehensive, up-to-date directory, using a definition that works for them as well.
These are the measures our group has identified, and we are now bringing forward a robust research program to support them. We are also coordinating with our three government counterparts tasked with developing a new policy framework with PSPC and the treasury department.
Clearly, there is much to be done to achieve the target and much that can be done. The experiences of jurisdictions like Australia and Saskatchewan have shown us that with the right will, monitoring and supports, we could not only meet but exceed the 5% target and increase it threefold to fourfold.
In the COVID crisis and beyond, addressing this aspect of reconciliation is straightforward. Meeting the 5% target will depend on clear federal direction, incentives throughout the bureaucracy, and an indigenous lead to work with and register our business owners. In a fairly short time, we could move this target from aspiration to reality, promoting our shared prosperity.
Meegwetch.
View Kelly McCauley Profile
CPC (AB)
Thanks, Mr. Chair.
To our witnesses, thank you for your patience and for sticking with us. I know that staring at a blank Zoom screen for two hours is probably not the highlight of your day, so thank you.
I want to thank everyone for their opening statements. It pains me that we have to invite witnesses here today for this study, because we went through an almost identical process three to three and a half years ago in the last Parliament, when we heard different people from the indigenous communities say basically the same things we're hearing today—big promises, no follow-through, and on and on. I'm glad you were able to come and reinforce what we've heard before.
One thing that's always stunned me about procurement from the indigenous community is that when we had the last set of committee meetings on this issue, we heard from indigenous people that they were getting no help from the government side, no real results. Then we heard witnesses say that they were getting great help from the energy industry, especially in Alberta. Then, when we brought the procurement bureaucrats in, they almost threw their shoulders out patting themselves on the back so hard. There's a complete disconnect between what you're telling us and what the bureaucrats will end up telling us.
One of the things I'm really glad you brought up was the part about tracking and setting goals. We've seen procurement for three straight years now, with two to be decided as their goal for achieving the set-asides. I think it's important for accountability and achieving results that we have these things.
For everyone here, Mr. Metatawabin, you mention how we're qualifying indigenous businesses. It's always a question of whether we are better off with a contract going to a non-indigenous-owned company that employs a very large number of indigenous people or whether the set-aside is for an indigenous-owned business that does not perhaps employ a large number of indigenous people. What delivers the best results for the community, and where do you see the balance between those?
Shannin Metatawabin
View Shannin Metatawabin Profile
Shannin Metatawabin
2021-06-09 18:08
A big problem with procurement over the past 25 years is that only $1.6 billion has been allocated to all indigenous procurement opportunities—
Shannin Metatawabin
View Shannin Metatawabin Profile
Shannin Metatawabin
2021-06-09 18:08
—and that's only 0.8% of all opportunities. We need to make wholesale changes. Australia has shown that they had a target, and then they increased it fourfold. Saskatchewan has done it, but it's only because there's a will. If there's a will, then there's a way.
The only way you're going to make a difference is for those frontline managers to be able to select an indigenous person. If there are hard targets and consequences for not meeting those targets, it will happen.
What you're talking about is how we can find the right mix in the types of businesses. I think that what Australia has shown is that if there is an opportunity, indigenous people will respond with the right businesses, respond with the right employee breakdown and invest in the assets. We did this 20 years ago. They invested a lot, and nothing resulted from it. A lot of them just stuck to the mainstream. I'm looking for a real change.
Philip Ducharme
View Philip Ducharme Profile
Philip Ducharme
2021-06-09 18:09
I agree with what Shannin said.
We look at the businesses as well, and we are trying to ensure that the businesses are going to be the 51% owned and controlled. What has been an issue in the past is that the government told us what an indigenous business is. They said that to qualify as an indigenous business, they have to meet that extra requirement.
To my knowledge, for any of the other other programming that the federal government has regarding social procurement, it's only the ownership and control. There is no requirement to have your workforce be the stakeholder group that is being recognized.
I do think that indigenous businesses.... There is research that shows that we do hire our own people and that we do increase the capacity within our communities as well by hiring. I think that's what needs to be done. It also needs to have a target set, and there have to be some teeth to it. A mandate is great, but unless it's incentivized, it's going to be a hard sell to get it to happen.
Marnie Suitor
View Marnie Suitor Profile
Marnie Suitor
2021-06-09 18:10
Thank you.
I'm actually working at the civic level with the City of Edmonton on their procurement strategy, so some of the conversation that's come up so far is interesting. If we think about ownership at 51%, I've worked with indigenous businesses that are 100% indigenously owned, but in the background there are blind trust agreements, etc., that transfer the actual operation of the business to non-indigenous people, so having that criterion of ownership does also create some other nuances.
I've seen the other side. We've had a business that is 100% indigenous owned and operated but cannot meet the requirement for the employee base. The example would be in the engineering or architectural world. Here in Edmonton, we have a very reputable business that is capable and qualified, but they could never meet the 33% threshold, because they're not able to find the skill set within the indigenous community to meet that requirement. Therefore, there are challenges on both sides.
View Patrick Weiler Profile
Lib. (BC)
Thank you, Mr. Chair.
I'd also like to thank our witnesses for their patience in joining our committee meeting tonight.
Maybe I should start by recognizing that I'm streaming from my home on the traditional unceded territory of Coast Salish peoples, including the Squamish, Tsleil-Waututh and Musqueam nations.
What came up in the opening comments for everybody was that one of the big barriers to having increased indigenous involvement in government procurement was the complexity of the RFP process. Mr. Ducharme mentioned a couple of things: the challenges with previous work history with the government and lack of feedback.
Mr. Ducharme, I was hoping you could explain a little bit on your thoughts about how the RFP process itself could be simplified and how that might be able to increase indigenous procurement.
Philip Ducharme
View Philip Ducharme Profile
Philip Ducharme
2021-06-09 18:13
Thank you.
I think you could look at some of the RFPs. If you could unbundle them or if you didn't have so many criteria in them, it would help. It's set up right now so that all the mandatory criteria in these RFPs are almost a weed-out mechanism, and that's what a lot of our businesses struggle with, especially with the previous platform, the Buyandsell and the epost that the federal government was using. There would be one little thing that would be missed, and because of that, they were non-compliant and their bids are not even being looked at. I think making not as many mandatory requirements.... It almost seems like the requirements, as I said earlier, are there to set us up for failure. My understanding is that the new procurement platform the federal government is going to is going to make it a little bit easier so that people aren't going to be losing out by not having a document that's uploaded.
Again, I think by simplifying the contracts.... We had one supplier who said he spent $10,000 to respond to the bid because there was so much. It was a technical RFP, but there's no reason that something that's worth $10 million is going to have to require the same amount of work as a $10,000 or $100,000 RFP.
Marnie Suitor
View Marnie Suitor Profile
Marnie Suitor
2021-06-09 18:14
My comments would be somewhat similar. I think it's important to scale the RFP to the work that's being required by actually taking a look within to understand the risk, the scope, the dollar value, and then adjust the RFP accordingly. Is the requirement to hold, let's say, $5 million worth of insurance really practical for someone who's bidding on a $150,000 contract? Those types of things would be helpful.
Shannin Metatawabin
View Shannin Metatawabin Profile
Shannin Metatawabin
2021-06-09 18:15
I would like to add that if we viewed investing in indigenous businesses as an investment, we'd see that the social impacts for an indigenous-owned business in the community include a 72% increase in life satisfaction, a 52% increase in mental health indicators and a 19% increase in health indicators, so there are actually cost savings there.
There are also ancillary benefits to other community members with that business. There are community-owned businesses that have bid on contracts within their own community and have been weeded out because of the complexity of the bidding process. There needs to be a full change on how this is set up so that the community-owned business is at the front of the line, because they're going to be hiring their community members and the benefits are going to remain in that community. Right now, the system is set up to fail, as Philip has pointed out. We need to remove those barriers, just like we have with so many other barriers in front of us, and we're going to see a lot more impact.
View Patrick Weiler Profile
Lib. (BC)
We would appreciate your sharing with the committee, if you could, the report that has those statistics.
A number of things have come up at this meeting today, including that some of the other jurisdictions that have set targets and increased targets, with enforcement measures to ensure they are met, have been able to meet them. I'd be curious to hear your comments on what changes took place within government procurement to facilitate that additional procurement, in addition to just the targets. What actual changes in their process took place that led to that improvement?
I'll go first to Mr. Metatawabin, please.
Shannin Metatawabin
View Shannin Metatawabin Profile
Shannin Metatawabin
2021-06-09 18:17
I'm going to refer to something I have in front of me here, which says that in 2019 and 2020, Australian indigenous procurement outcomes had a target of $195 million. The results were $854 million. The results exceeded the target by about 4.3%.
Also, Saskatchewan Power in 2019 had a target of 3.5%. The results are 8.6%.
There's a large-fold increase in the targets. This is because they're actually implementing procurement and caring about it.
Maybe Rocky can speak to this, but Suncor has had the longest procurement process with some of the tribes in Alberta. That's kind of where corporations have taken the lead to implement processes through impact benefit agreements that have hard targets and consequences for not meeting them. You lose your social licence to operate. We almost need to get into that kind of territory if we really want procurement to make an impact.
View Julie Vignola Profile
BQ (QC)
Thank you, Mr. Chair.
Thank you very much for being here, Ms. Suitor, Mr. Metatawabin, Mr. Sinclair and Mr. Ducharme, and also for your patience. I am extremely grateful to you.
You talked about the government initiatives that have been put in place since 1996, but you also talked about how difficult it is, at times, to find qualified employees within the community itself. That reminded me of something. Seventeen years ago, I took part in the E‑Spirit aboriginal business plan competition. That was an indigenous entrepreneurship competition whose goal was precisely to foster young people's desire to go to school and excel, to be able to acquire skills, and so on. As far as I know, that competition no longer exists.
To improve the qualification, what initiatives would work—because to date, we are seeing things that sometimes work and sometimes don't—and would enable indigenous businesses to find qualified employees within their communities?
Do you want to answer my question, Mr. Metatawabin?
Shannin Metatawabin
View Shannin Metatawabin Profile
Shannin Metatawabin
2021-06-09 18:20
Oh, I like this question. This is so important.
When you think about creating an entrepreneur, you have to start at the very beginning. This starts with the children.
I was speaking with Chris Googoo today from Ulnooweg. They have a whole pathway of learning whereby they enter the schools to begin introducing STEM, introducing skills and innovation, so that when the students get to the time when they're selecting careers, they'll either go to school or start a business. They already have entrepreneurship and business in their vocabulary. That's so important.
The AFI network works with businesses every day. They're always developing capacity programs and providing the training directly to the entrepreneur. However, support for the indigenous business development network has decreased by 70% in the past 20 years. Rocky, who has a certain number of business officers, has reduced his numbers because the support he has received is not there anymore. We need to increase that and provide some enablers, some stimulus, to ensure that we can provide the skills to everybody who wants to start a business.
View Julie Vignola Profile
BQ (QC)
Thank you for your answer, Mr. Metatawabin.
Stop me if I have it wrong, but from what I am hearing, not only do the initiatives fail, but there has also been a funding cut that has exacerbated the record of failure.
Have I understood correctly, Mr. Metatawabin?
Shannin Metatawabin
View Shannin Metatawabin Profile
Shannin Metatawabin
2021-06-09 18:21
If we take it back a little bit further, a number of barriers were created for indigenous people placed in reserves, away from the market. We have legislation in the Indian Act that prevents us from using our house as security. We don't have any wealth generation within our community, so equity is a problem, and so are skilling in the community, infrastructure and water. People are surviving on a day-to-day basis.
Providing skilling so that people can consider entrepreneurship as an option is a huge win. If we can do that and have government that is willing to say that indigenous people matter, this is low-hanging fruit. We can provide reconciliation by providing government opportunities that are already there. We just have to enable the indigenous business by saying that this is a real opportunity and it's going to happen this time.
View Julie Vignola Profile
BQ (QC)
I am going to ask you each to answer the next question.
The autonomy and self-determination of the First Nations are values that are very important to me and must be prioritized.
At present, the government finally seems to understand that in order for measures to be effective, they have to be put in place in collaboration with the First Nations, not imposed on them.
You have skills and you have experience, ideas and a culture. All of that has to be put to work.
Is it possible that the explanation for the low percentages of contracts awarded and of successful initiatives can be explained in part, but not solely, by the fact that there has been little inclusion of the First Nations in the processes and consultations and in deciding the changes that have been made?
Philip Ducharme
View Philip Ducharme Profile
Philip Ducharme
2021-06-09 18:23
If I could go ahead, I think this sort of ties back to what you said as well.
One thing we need to ensure is that the federal government works with indigenous businesses well before an RFP is posted. Once an RFP is posted, it's too late for our businesses to scale up and go out and resource the employees they need.
I know that even within the Centre Block in Ottawa, a lot of construction will be going on in the next 20 to 30 years. As well, we're working with the federal government and OSME to try to ensure that these businesses realize what opportunities are coming up. Then we can work with the asset holders and say that these are the types of trades and opportunities that will be required in our indigenous businesses to be able to fulfill these contracts, so that when the actual RFP is posted, we're able to apply to it and we're capable of responding to those RFPs fully, without having to scramble and then say that we don't have the means.
I think one of the best things that needs to happen is more engagement prior to the actual RFP coming out.
View Matthew Green Profile
NDP (ON)
Thank you very much, Mr. Chair, and thank you to all the witnesses.
I'm going to start by doing something I don't normally do. That's just noting in a very non-partisan way that I believe in my heart that all the members of this committee want to see increased procurement coming through to the indigenous communities. They want to see the programs that are in place work. I believe that to be true on the opposition side and on the government side.
I would also note that nobody understands the challenges that are faced in our first nations, Métis and Inuit communities better than those who are actually experiencing them. Your testimony today, in a very short period of time—notwithstanding the wait that you had—has already laid out some really compelling and very obvious next steps for this government to take.
I want to note that I have a concern about timing and what may or may not happen out of this study in terms of our being able to report back and have recommendations from this study. I'm unclear about whether that's going to happen in this session or the next. I do, however, want the opportunity to get on the record a few of the points that have been reiterated, because unfortunately I won't be able to pass it as a motion at this point. I don't think it would be time-effective.
Mr. Ducharme, you brought out what was for me one of the most compelling points, which was that if it doesn't get measured, it doesn't get done. I've been pushing the Auditor General to include, in all of their audits and studies, a framework very similar to what you identified in terms of having open and transparent reporting on the deliverables and the outcomes within the main estimates. I think you also touched on departmental plans. You also talked about, I believe, a directive on performance management.
Could you please restate those points from your notes, to go back into the Hansard, for people who are watching? Hopefully, the senior members or parliamentary secretaries who are here could take this back and maybe move on this, without our having to do anything formally.
Can you restate that ask with detail?
Philip Ducharme
View Philip Ducharme Profile
Philip Ducharme
2021-06-09 18:27
I'll get to my notes here.
I think one of the areas we talked about was the directive on performance management. It would be as simple as changing 4.1.2 and including indigenous procurement in there. Right now it says, “determining, in consultation with the deputy head, the departmental criteria for talent management plans”. If we were to include “including indigenous procurement targets in accordance with the appendix to this directive”, it would make a big difference.
Also, the standard on performance management, specifically in A.2.2.1.1, could also now potentially read, “Clear and measurable work objectives, with associated performance measures including indigenous procurement targets, that are linked to the priorities of the organization and of the Government of Canada”. Again, this is something that can be done without being legislated.
In other programs that were held in the U.S., it was actually legislated, and that's what made the difference. I think it was President Nixon who brought that executive order forward in 1968. I think here in Canada the mandate is a good start. As Shannin also mentioned, there does need to be teeth to it; otherwise, it's not going to resonate and happen.
View Matthew Green Profile
NDP (ON)
I believe you referenced having a reporting back in the main and supplementary estimates. Perhaps you could find that in your notes and also repeat that for the purpose of the committee. My hope again is that the colleagues we have here in government, the policy people who are tapped into these calls, will get a chance to hear this and maybe take you up on it as a form of real movement from this government towards outcomes.
Shannin Metatawabin
View Shannin Metatawabin Profile
Shannin Metatawabin
2021-06-09 18:29
Can I add one thing?
I'll tell you where Australia really made the big change. They issued the targets, but the change only really happened when the government departments were transparent with how they achieved their targets and showed them to each other so that there was a competitive environment, with your department now showing where you stand with indigenous procurement. That's when real change happened. Now department heads and their bureaucrats are doing everything they can to achieve it.
View Matthew Green Profile
NDP (ON)
While I certainly support that idea, I would also love to see it reflected to the public. I would love to see it presented in our reports that come back through public accounts, because, again, within the culture of the government, that's one thing, but I think there's also a forward-facing public responsibility. I can't quite get the words, but maybe I'll reference back to the Hansard if Mr. Ducharme doesn't have the wording handy.
Philip Ducharme
View Philip Ducharme Profile
Philip Ducharme
2021-06-09 18:30
I actually do have it handy.
It was Ms. Bull who also brought that forward to the committee on February 22. It was for the “committee [to] consider measures that would mandate government departments and agencies to report on their purchases from indigenous businesses as...part of their submissions to the main estimates and the supplementary estimates committee.”
Again, when they do their supplementary estimates, they can state at that time what their indigenous procurement is. That's another form of recording it and ensuring that it is happening.
View Matthew Green Profile
NDP (ON)
One of the ways that I hope to document this is that it will be in the Hansard. Again, I believe everybody around this table wants to see these programs succeed.I really do.
One of the commitments I'm going to leave with all of you is that I'm going to take those recommendations and go ahead and put those into a formal letter from me, out of my office, to the ministers responsible, again just to have it on paper and on the public record. It's my hope that at this time next year, you and Ms. Bull won't have to come back with this request again. My hope is to see it actually in the systems and principles and reporting mechanisms of government, because this is a government that says it wants to be committed to being open by default, and I would like to see that accountability carried through.
Thank you, Mr. Chair.
View Pierre Paul-Hus Profile
CPC (QC)
Thank you, Mr. Chair.
Good afternoon, everyone.
I am in Quebec City, a few hundred metres from the Wendake community, which is very well integrated in the Quebec City region. There are a lot of excellent businesses in Wendake; I am familiar with several of them.
I would like to ask a question, and I hope that the interpretation will enable us to understand one another properly.
Mr. Ducharme, Ms. Suitor and Mr. Metatawabin, you have spoken about trust. From what I understand, there is often a problem of trust between the government and the indigenous community in the business world when it comes to awarding contracts.
My next question is very technical, and I hope it will be understood properly. Do you think that the fact that the Government of Canada does not have the legal means that it needs for resolving a contractual problem with an indigenous business might be a factor that explains why fewer contracts are awarded to your businesses?
I hope that what I said was clear to the interpreters.
I would ask Mr. Ducharme to answer the question.
Philip Ducharme
View Philip Ducharme Profile
Philip Ducharme
2021-06-09 18:32
Thank you, Mr. Paul-Hus.
I'm not sure whether the question is clear, but I think you did talk about trust, and I think this is an area where we are struggling.
I know that a lot of our businesses have said.... I alluded to one company that's done 32 bids within the last year. We held a recovery forum last year through work. It was a little bit sad because we had so many businesses that said they were no longer going to be applying to the federal government for contracts. That hurt a little bit because we are working quite closely.
Mr. Green mentioned that he believes all parties are interested in this issue. That does make us feel good, and I think that's what we need to do. We will relay that message back to our businesses to try to bring them back into the fold. It seems that in the past we've taken one step forward and two steps back.
However, I think we really need to work on that trust issue with the federal government so that our businesses do look at opportunities with regard to procurement.
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