Canada’s auditor general is considering opening an investigation into a multi-million dollar program aimed at boosting indigenous businesses that has been vulnerable to abuse for decades.
Following complaints from Indigenous communities and a recent Global News investigation with researchers from First Nations University of Canada, Auditor General Karen Hogan’s office has confirmed it is reviewing a request to investigate the Indigenous Business Directory (IBD).
Government departments rely on the database to find First Nations, Métis and Inuit companies that account for an estimated $1.6 billion in annual federal work under the Indigenous Business Procurement Strategy (IBPS). Indigenous leaders have long warned Ottawa that non-Indigenous companies are being included in the IBD and gaining access to billions of dollars worth of government contracts.
A months-long investigation by Global News and First Nations University of Canada looked into the PSIB, created in 1996 to give Indigenous businesses preferential access to a percentage of federal contracts, and found loopholes and workarounds for non-Indigenous companies to access that money.
The analysis found that until 2022, the federal government allowed companies to identify themselves as Indigenous and did not always require documentation to back up those claims. It also detailed “pen-rental” schemes – an open secret in Ottawa’s lucrative procurement industry – in which an Indigenous person is hired to bid for a non-Indigenous company on federal contracts.
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Natan Obed, president of Inuit Tapiriit Kanatami, called workarounds a form of identity theft and the “next stage of colonization.”
The audit request comes from three prominent Indigenous groups – the Assembly of First Nations, the Algonquin Anishinabeg Nation Tribal Council and the Assembly of First Nations of Quebec and Labrador – who accused Ottawa of “negligent management” of the IBD.
“The IBD, which is intended to provide Indigenous businesses and entrepreneurs with targeted contracting opportunities, has been hijacked by ineligible, non-Indigenous interlopers who have defrauded Canada of potentially billions of dollars,” reads the letter from the organizations, shared with Global News.
“The Government of Canada, in its supposed aim of promoting economic opportunities for Indigenous people, actually does not care at all about ensuring that the beneficiaries of billions of dollars in contracts are Indigenous people.
“We feel as if those in charge of the IBD are mocking us rather than supporting us.”
Indigenous Services Canada (ISC), which maintains the Indigenous Business Directory, initially told reporters it had tightened eligibility requirements in 2022 and was requiring businesses to provide documentation to confirm their Indigeneity.
However, Global News reported Wednesday that when a representative of the Algonquin Anishinabeg Tribal Council approached ISC about being listed on the board in April 2024, she was told the council did not require any documentation.
According to the emails, a federal official told the Algonquin representative that they could upload “any” document, including a “picture of a rabbit,” to complete the application. The Algonquin representative uploaded the picture of a rabbit.
“Incredibly, the Government of Canada accepted this (photo) as proof of AANTC’s Indigenous status,” the letter to Hogan said.
“This would be a funny joke if it weren’t so disgustingly insulting.”
Global reached out to ISC for comment on the rabbit incident on Monday. As of Thursday afternoon, the department was unable to respond.
In a statement Thursday, the Auditor General’s Office said it is “currently assessing” the indigenous groups’ request and will decide whether to proceed with an investigation.
Such audits can take years to complete, but a spokesperson for Hogan’s office said the process is “flexible,” allowing them to “reorder the priorities of planned audits to take into account emerging issues, so that our work takes into account the areas of greatest risk to the people of Canada, as well as our mandate, available resources and parliamentary interest.”
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