Appearance before the Standing Committee on Indigenous and Northern Affairs (INAN) - Economic Development (December 9, 2024)

Table of contents

A. Scenario Note

Logistics

Date: December 9, 2024
Time: 3:30 p.m. – 8:30 p.m.
Location: Room 415, Wellington Building, 197 Sparks st

Appearing

3:30 p.m. – 5:30 p.m.

Indigenous Services Canada (ISC)
  • The Hon. Patty Hajdu, Minister of Indigenous Services
  • Department Officials
    • Gina Wilson, Deputy Minister
    • Keith Conn, Assistant Deputy Minister, Lands and Economic Development
    • Jessica Sultan, Director General, Economic Policy Development
Public Services and Procurement Canada (PSPC)
  • The Hon. Jean-Yves Duclos, Minister of Public Services and Procurement
  • Departmental Officials
    • Arianne Reza, Deputy Minister
    • Catherine Poulin, Assistant Deputy Minister, Departmental Oversight Branch

5:30 p.m. – 7:30 p.m.

Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC)
  • The Hon. Gary Anandasangaree, Minister of Crown-Indigenous Relations
  • Department Officials
    • Valerie Gideon, Deputy Minister
    • Georgina Lloyd, Assistant Deputy Minister, Northern Affairs
    • Heather McLean, Assistant Deputy Minister, Implementation Sector
    • Christopher Duschenes, Director General, Indigenous Institutions and Governance Modernization
Employment and Social Development Canada (ESDC)
  • The Hon. Genette Petitpas Taylor, Minister of Employment, Workforce Development and Official Languages
  • Departmental Officials
    • Colette Kaminsky, Senior Assistant Deputy Minister, Skills and Employment Branch
    • Wojo Zielonka, Chief Financial Officer

7:30 p.m. – 8:30 p.m.

Métis Nation of Alberta
  • Andrea Sandmaier, President

Committee Membership

  • MP Patrick Weiler (LIB – BC) (Chair)
  • MP Jaime Battiste (LIB – NS)
  • MP Ben Carr (LIB – MB)
  • MP Anna Gainey (LIB – QC)
  • MP Michael V. McLeod (LIB – NWT)
  • MP Brendan Hanley (LIB – Y.T.)

  • MP Jamie Schmale (CPC – ON) (Vice-Chair)
  • MP Eric Melillo (CPC – ON)
  • MP Martin Shields (CPC – AB)
  • MP Bob Zimmer (CPC – BC)

  • MP Sébastien Lemire (BQ – QC) (Vice-Chair)

  • MP Lori Idlout (NDP – Nunavut)

Parliamentary Analysis

  • MP Patrick Weiler (LIB) (Chair) may ask questions about housing for Indigenous communities, as well as efforts for increased consultation with Indigenous peoples.
  • MP Michael V. McLeod (LIB) will likely ask questions that pertain to communities in his riding of the Northwest Territories, including the Indigenous and Northern housing and infrastructure funding gap in communities in the territories. He has previously asked questions related to climate change response and mitigation, including wildfire recovery supports for Indigenous and Northern communities. He also may ask questions related to tuberculosis elimination strategies in Inuit and on-reserve areas, inconsistencies regarding medical travel escorts, and the inability of Métis children with autism to get support from Jordan's Principle. During the previous meeting on Ministerial Priorities, he asked about current land claims and self-government negotiations that were underway as well as next steps for Indigenous housing funding.
  • MP Brendan Hanley (LIB) may ask questions specific to his riding, Yukon. He may ask about self-governance for Indigenous communities, specifically those in his riding. He may also ask questions on Northern economic development and support for Indigenous-owned businesses. During the previous meeting on Ministerial Priorities, he asked about funding commitments for residential school ground searches in his riding of Yukon. He also asked about improvement to the NIHB program, specifically relating to the medical travel component of the program.
  • MP Jaime Battiste (LIB), Parliamentary Secretary to the Minister of Crown-Indigenous Relations, has been a strong advocate for First Nations, Métis, and Inuit issues throughout his career. He may ask questions about Jordan's Principle, as well safe drinking water in Indigenous communities. During Minister Hajdu's appearance at OGGO on Indigenous Procurement, he asked about collaboration with Indigenous peoples to determine Indigenous status and community citizenship.
  • MP Ben Carr (LIB) may ask questions that pertain to Indigenous communities in his home province (Manitoba). He may also ask about child and family services, as well as the opioid crisis. During officials' appearance on Supps C, he asked about supports for Indigenous education and investments in Churchill, MB. During the previous meeting on Ministerial Priorities, he asked questions specific to work being done in Manitoba, specifically investments in the revitalizing of the Hudson's Bay building and the redevelopment of Portage Place.
  • MP Anna Gainey (LIB) asked about the state of the Canadian High Arctic Research Station during officials' appearance on Supps C. She also asks questions about the implementation of UNDRIP. During the previous meeting on Ministerial Priorities, she focused on commitments under UNDRIP and asked about the importance of removing barriers to education for Indigenous students, specifically in her province of Quebec.
  • MP Jamie Schmale (CPC) (Vice-Chair) is also the CPC Critic for Crown-Indigenous Relations and Critic for Indigenous Services. He will likely highlight economic reconciliation in his questions. He may ask questions related to: the department's progress on payments for out-of-court settlements; the Nutrition North Canada Program's targets and timelines; and tie his questions to the carbon tax. He may seek updates on MMIWG recommendations and a Red Dress Alert, and be critical of how slow the Government has been to act on this; the failure to provide Indigenous communities with support to manage environmental emergencies like floods and wildfires; remaining boil water advisories on reserves; and ISC's failure to provide Indigenous communities with support to manage environmental emergencies like floods and wildfires. During the previous meeting on Ministerial Priorities, he asked about the renewal of funding for Indigenous friendship centres, Indigenous procurement and the Canadian Health Agency.
  • MP Eric Melillo (CPC) may ask questions about food insecurity, medical transportation in northern and remote communities, the Grassy Narrows care facility, and infrastructure gaps in Indigenous communities. He may criticize the Nutrition North program and ask what steps are being taken to lower food costs in the North. His questions will likely support an economic reconciliation approach. During the previous meeting on Ministerial Priorities, he asked about First Nations policing and the lack of funding from the Federal government.
  • MP Bob Zimmer (CPC) is the CPC Critic for Northern Affairs and Arctic Sovereignty, as well as the Critic for the Canadian Northern Economic Development Agency. He has previously asked for breakdowns of funding for several Specific Claims by community. He may ask questions about the funding for the Nutrition North Canada Program and the need for it to benefit people rather than corporations. He is interested in Arctic security and defence. He may ask questions regarding boil water advisories in Indigenous communities and cancelled or delayed critical infrastructure projects in Nunavut. During the previous meeting on Ministerial Priorities, he questioned the government's performance in reducing boil water advisories, building houses, and improving affordability in the North.
  • MP Martin Shields (CPC) may ask questions about food insecurity and may tie food insecurity to the carbon tax. He may also ask questions on water security and water and wastewater systems. During the previous meeting on Ministerial Priorities, he asked about Indigenous housing and the government's progress on new housing units.
  • MP Sébastien Lemire (BQ) (Vice-Chair) is also the BQ critic for Crown-Indigenous Relations and Northern Affairs. He will likely ask questions related to funding for the TRC's Calls to Action, wildfires, water insecurity, and housing. He may ask about the lack of funding for Indigenous issues. During officials' appearance on Main Estimates, he asked about mental heath services available for Indigenous youth, specifically teenagers. He also asked about funding requests for the Yänonhchia' housing initiative, the Indigenous and northern infrastructure gap, as well as Indigenous housing programs and supports. During the previous meeting on Ministerial Priorities, he asked about economic reconciliation and the asked again about the Yänonhchia housing initiative. He also asked what measures are being taken to ensure that Francophone communities are not being discriminated against within Indigenous organizations, as well as through government funding and supports, and First Nations policing.
  • MP Lori Idlout (NDP), the critic of Crown-Indigenous Relations and Northern Affairs, will likely ask questions that pertain to her riding in Nunavut. She will likely be critical about the sunsetting of funding for various ISC programs, including ones for mental health and wellness, the legacy of residential schools, Jordan's principle, the Inuit Child First Initiative, and housing, water, and community infrastructure. She will likely highlight the infrastructure gap in Indigenous communities and ask about the correlation between poor housing and health issues, a lack of affordable housing in Nunavut, funding for infrastructure, water infrastructure challenges on reserves, and the low funding for education infrastructures, including calling for the funding of 13 Inuit-language and cultural schools in the near future. She may also ask about health, tuberculosis rates, medical transportation in the North, and the Grassy Narrows care facility. She will likely be critical of the funding for the Nutrition North Canada Program benefiting corporations rather than people in the north. She may ask questions related to reconciliation, including on Bill S-16 (Haida Nation Recognition Act), Red Dress Alert, MMIWG, police-involved Indigenous deaths, and unmarked graves. During the previous meeting on Ministerial Priorities, she asked about Nutrition North, Jordan's Principle funding, and the government's lack of cooperation with Indigenous peoples.

Recent INAN studies, reports and government responses

  • Bill C-61, An Act respecting water, source water, drinking water, wastewater and related infrastructure on First Nations lands (last meeting on November 25, 2024).
  • Appearance of the Member of Parliament for Edmonton Centre (last discussed November 21, 2024)
  • Nutrition North Canada (last meeting on May 8, 2024)
  • Tax Revenues from Businesses on First Nations Territories (last meeting on June 10, 2024)
  • Report 17: Bill S-16, An Act respecting the recognition of the Haida Nation and the Council of the Haida Nation (presented on October 24, 2024)
  • Report 15: Main Estimates 2024-2025 (presented on May 30, 2024)
  • Report 14: "We Belong to the Land": The Restitution of Land to Indigenous Nations (presented on May 8, 2024)

Recent Correspondence

  • Lori Idlout (NDP): November 4, 2024 — Support letter regarding the finalization of the Nunavut Land Use Plan.
  • Lori Idlout (NDP): October 28, 2024 — Contaminated Transport Canada Dock polluting Indigenous waters and endangering health.
  • Lori Idlout (NDP): October 11, 2024 — Correspondence regarding Tax on Bulk Water – Igloolik, NU Co-Op and Northwest Company Northern Store
  • Lori Idlout (NDP): August 26, 2024 — Elder Care Facility in the Wiikwemkoong Unceded Territory.
  • Lori Idlout (NDP): July 29, 2024 — Correspondence regarding funding cuts to finding unmarked graves of Indigenous children who attended residential schools.
  • Lori Idlout (NDP): April 12, 2024 — Indigenous Class Action Lawsuit Settlement Claims.
  • Bob Zimmer (CPC): April 23, 2024 — Letter regarding you assistance with searching for historical Indigenous records.
  • Eric Melillo (CPC): March 4, 2024 — Tragic fire in Cat Lake First Nation that destroyed their nursing station.
  • Lori Idlout (NDP): March 19, 2024 — Auditor General's report regarding housing in First Nations communities.
  • Lori Idlout (NDP): January 4, 2024 — Information request on trilateral senior officials committee on housing (Initiated by MINO).

Members OPQs/Petitions

  • Jamie Schmale (CPC): November 20, 2024 — Indigenous Business Directory. Response not yet tabled.
  • Eric Melillo (CPC): October 9, 2024 — Expenditures related to the cabinet retreat which took place in Halifax, Nova Scotia, from August 25 to 27, 2024. Response sent to PCO.
  • Bob Zimmer (CPC): September 25, 2024 — Giant Mine remediation project. Response tabled November 19, 2024.
  • Bob Zimmer (CPC): October 17, 2024 — Organizational chart of departments within Northern Affairs Canada. Response sent to PCO.
  • Lori Idlout (NDP): September 20, 2024 — Contracts with healthcare agencies to serve rural and remote Indigenous communities at ISC, broken down by fiscal year, since 2017-18. Response tabled November 6, 2024.
  • Lori Idlout (NDP): October 1, 2024 — Indigenous Health Equity Fund for fiscal year 2024-25. Response tabled November 19, 2024.
  • Lori Idlout (NDP): October 1, 2024 — Contaminated sites and waste sites in Nunavut. Response tabled November 19, 2024.
  • Jamie Schmale (CPC): Petition e-4982 — Indigenous Identity Fraud. Certified August 6, 2024.
  • Lori Idlout (NDP): Petition e-5164 — Indigenous peoples right to safe drinking water. Open for signature.

In the Media

Meeting Proceedings

The meeting is tentatively scheduled for December 9, 2024

The Chair will call the meeting to order and provide instructions for the meeting proceedings. They will then introduce the witnesses and invite the Ministers to deliver opening remarks (limit of 5 minutes). This will be followed by a Q&A period (details below).

It is recommended that all speakers speak at a moderate pace and at an appropriate volume to ensure they are heard by the interpreters. All witnesses are asked to mute their microphones unless they are speaking. A new practice that was recently instituted as a measure to protect interpreters from injury, is that when earpieces are not in use by witnesses, that they be placed on the designated white circles installed on the table.

Following the opening remarks, there will be rounds of questions from Committee members (as listed below). The rounds of questioning will repeat when the second panel commences in the second hour.

Departmental Officials appearing as witnesses should avoid making commitments to parliamentarians outside of the meeting's official proceedings. If a Member of Parliament or Senator approaches a witness asking for information, they should politely redirect that request to the Clerk of the Committee, who will then officially liaise with the Department.

Witnesses should be prepared for interruptions and heated exchanges and remain calm and poised while at the table.

Committee members will pose their questions in the following order:

  • First round (6 minutes for each Party)
    • Conservative Party of Canada
    • Liberal Party of Canada
    • Bloc Québécois
    • New Democratic Party of Canada
  • Second round
    • Conservative Party of Canada (5 minutes)
    • Liberal Party of Canada (5 minutes)
    • Bloc Québécois (2.5 minutes)
    • New Democratic Party of Canada (2.5 minutes)
    • Conservative Party of Canada (5 minutes)
    • Liberal Party of Canada (5 minutes)

The meeting can be watched via ParlVU, however there may be an up to 70-second delay with the webcast.

Other Information for Appearing In-Person

Witnesses should arrive early to allow time for security screening. Screening could take 30 minutes or more for those without a Hill pass.

B. Opening Remarks

Speaking notes for the Honourable Patty Hajdu Minister of Indigenous Services

My colleague has left off at a great place, because my role here today is to highlight the importance of fostering strong Indigenous economic opportunities through programs like the PSIB, the procurement strategy for Indigenous business.

For decades, Indigenous peoples were intentionally excluded from opportunities to develop local economies and participate more broadly in the national economy. The short-sighted policies of previous governments meant that, whether intentional or as a consequence of exclusionary policy, Indigenous businesses and economies have been held back. However, that is short-sighted for Indigenous peoples and communities and for Canada's economy alike. Supporting Indigenous entrepreneurs, who are job creators, or making access to capital available for major projects is good for people, communities and Canada's overall economy.

Investing in Indigenous communities and building up Indigenous businesses and entrepreneurs benefit all Canadians. According to the 2022 "National Indigenous Economic Strategy for Canada", the continued exclusion of Indigenous peoples costs the Canadian economy $27.7 billion every year. The National Indigenous Economic Development Board found that closing the existing employment gap could help lift over 150,000 Indigenous people out of poverty. There is a real cost to inaction.

Indigenous people are an untapped resource in Canada's market. Since 2015, we've been focused on strengthening self-determination and building capacity so that Indigenous peoples have the tools and resources to fully participate in the economy on their own terms. Federal funding for programs like the aboriginal entrepreneurship program managed by the National Aboriginal Capital Corporations Association and Métis capital corporations is creating opportunities for First Nations, Inuit and Métis business owners to launch or grow their businesses.

Indigenous financial institutions have existed since the late 1980s. Over the past 35 years, the program has issued approximately 52,000 business loans worth $3.2 billion, with a repayment rate of over 95%. For every $1 million lent by Indigenous financial institutions, $3.6 million is produced in total gross domestic product, GDP, for Canada. Successive governments have recognized that access to capital is key to economic reconciliation, and the results of these investments can be seen in communities across the country.

For example, Ulnooweg Development Group Inc., the Indigenous financial institution for the Atlantic, has played a key role in supporting Indigenous entrepreneurs. To date, it's funded over 1,900 projects worth over $71 million. This funding has supported entrepreneurs in the fishing, aquaculture and marine servicing industries, creating a strong First Nations-led industry in the region and boosting the local economy.

Investing in Indigenous communities and building up Indigenous businesses and entrepreneurs benefit all regions in our country. It's why budget 2024 announced $319.8 million over five years to provide much-needed additional capital for Indigenous financial institutions and Métis capital corporations to support the growing needs of entrepreneurs.

While investing in Indigenous business is important, it starts with a strong base. Building up communities with new or renovated schools, health care centres, water treatment plants, all-season roads and housing is investing in Canada's productivity and economy overall. A recent report from the AFN found that every dollar invested in infrastructure generates $1.82 in economic output for First Nations communities. Since 2015, we've increased funding for education, health, infrastructure and housing by over 1,100%.

We're working with partners on community-led solutions, and we're making progress. For example, to close the housing gap, we've supported 5,300 housing projects in 611 First Nations communities since April 2016. More kindergarten to grade 12 schools are being built so that children can access high-quality education without leaving home, including in communities like Tataskweyak Cree Nation in northern Manitoba, Eabametoong First Nation in northern Ontario and Piikani Nation in Alberta.

Strong communities produce strong community members, who in turn are the leaders who will shape the decades to come.

Procurement is another key part of building the Indigenous economy. The national Indigenous economic strategy, which was developed by over 20 Indigenous organizations, sees procurement as a key component of accessing financial capital so that Indigenous peoples can achieve economic and social prosperity on their own terms.

The strategy also recommends that all levels of government and industry have mandatory Indigenous procurement targets. In 2021, the federal government implemented a 5% Indigenous procurement target set for all departments. Tabatha Bull—some of you have heard from her—the CEO of the Canadian Council for Indigenous Business, called it "a pivotal moment in harnessing the potential of the Indigenous economy".

Since then, the value of contracts going to Indigenous businesses has increased to approximately $1.6 billion, and there are tangible economic benefits to companies that for the first time have the Government of Canada as their customer. From experience to system navigation to growth of opportunity, government procurement could be a valuable component in the sales trajectory of an Indigenous company.

Now that we're seeing success in bringing Indigenous companies into the sphere of government procurement, the federal government is working with partners to transform the procurement strategy. It's clear that this program must be transformed and transferred to the control of partners. To do so respects the principle of self-determination, and it responds to the calls from Indigenous leaders themselves.

Central to advancing self-determination and economic reconciliation is ensuring that Indigenous peoples participate in and shape the decisions that deeply affect them. It's why I convened with the private sector, Indigenous leadership and other government departments two economic reconciliation roundtables to date—and others are planned for 2025—to identify and create solutions to government and corporate barriers to Indigenous economic activity. We're using that information as we work with partners on a renewed federal economic policy to support First Nations, Inuit and Métis economic development.

I can see by the focus of the members in this committee that we agree that the federal government has a real opportunity and a role to foster Indigenous economic prosperity, including by safeguarding the 5% minimum target and the procurement strategy for Indigenous businesses. Programs that increase economic activity across Canada are just common sense.

The continued exclusion of Indigenous people from the economy costs the Canadian economy, as I said before, $27.7 billion every year, so we can't afford to ignore opportunities to build up this economy. By working together to remove barriers to economic development and to support Indigenous businesses, we are making progress towards long-term well-being and prosperity in communities across Canada.

I look forward to answering your questions and further discussing the importance of economic reconciliation.

Thank you.

C. Government Response to INAN Report 2

D. Indigenous Procurement

Context:

  • The Government of Canada fosters the Indigenous business participation in federal procurement through the 5% mandatory, minimum Indigenous procurement target; the Procurement Strategy for Indigenous Business; and content in the Treasury Board Directive on the Management of Procurement pertaining to Indigenous participation in federal procurement. This is in addition to Canada's legal obligations under modern treaties and the Directive on Government Contracts, Including Real Property Leases, in the Nunavut Settlement Area.
  • To apply such initiatives and policies, federal procurement officers must be able to determine which business meet the eligibility criteria of the Procurement Strategy for Indigenous Business. For this purpose, the Government of Canada has been providing an Indigenous Business Directory service.
  • In 2021, ISC established a five-year process to engage partners and co-develop a Transformative Indigenous Procurement Strategy to improve existing Indigenous procurement policies and programs.
  • ISC has provided funding to and worked closely on reforms with 18 National Indigenous Organizations and Indigenous economic organizations and regional organizations including, the National Aboriginal Capital Corporations Association, the Canadian Council for Indigenous Business, the Assembly of First Nations, the Métis National Council, and Inuit Tapiriit Kanatami.
  • To be included on the Indigenous Business Directory, a business must provide documentation proving that it is at least 51% Indigenous owned and controlled.
  • In May 2024, PSPC announced the establishment of the Office of Supplier Integrity and Compliance to strengthen the integrity and oversight of the procurement process to help ensure that Canada does not contract with suppliers of concern. PSPC also has a revised Ineligibility and Suspension Policy that came into effect in May 2024.

Considerations:

  • Since the fall of 2023, the Government of Canada's Indigenous procurement practices, policies and tools have been publicly scrutinized, by media, Parliamentarians, and Indigenous partners.
  • The Standing Committee on Government Operations and Estimates is currently studying Indigenous Procurement.
  • ISC, Public Services and Procurement Canada, the Treasury Board of Canada Secretariat, and every other department and agency have unique responsibilities and roles related to Indigenous procurement. ISC plays an advisory and administrative role in the operations of the Procurement Strategy for Indigenous Business. ISC also manages the Indigenous Business Directory and publishes Government of Canada achievement data for the 5% mandatory minimum Indigenous procurement target.
  • Each department and agency is responsible for monitoring the contracts they award, including ensuring that the contractor complies with the requirements of the Procurement Strategy for Indigenous Business.

Next Steps:

  • ISC is actively working with Indigenous partners to co-develop a new Transformative Indigenous Procurement Strategy that will improve procurement policies, safeguards, and processes for Indigenous businesses. A key piece of this collaborative work is determining a path forward to transferring the administration of the IBD to Indigenous partners, so Indigenous Peoples are determining who qualifies as an Indigenous business.
  • ISC to continue working closely with Public Services and Procurement Canada and the Treasury Board of Canada Secretariat, given their role in procurement operations, policies and guidance on best practices, including in relation to Indigenous procurement.

Key Messages:

  • The Government of Canada is committed to fostering economic reconciliation in its procurement activities, leading to greater opportunities for Indigenous businesses. Some of the ways we do this include:
    • respecting the procurement obligations of modern treaties
    • limiting competition for federal contracts to businesses listed on the Indigenous Business Directory (IBD) through certain programs, such as the Government of Canada's Procurement Strategy for Indigenous Business (PSIB)
    • implementing a mandatory requirement to ensure a minimum of 5% of the total value of government contracts are awarded to Indigenous businesses.
  • The Procurement Strategy for Indigenous Business is strongly supported by Indigenous leaders and communities across the country.
  • ISC is working closely with Indigenous partners and businesses to co-develop a modernized Transformative Indigenous Procurement Strategy.
  • We are collaboratively working to determine a path forward to transferring the administration of the Indigenous Business Directory to Indigenous partners, so Indigenous Peoples are determining who qualifies as an Indigenous business to be eligible for contracts set aside under the Procurement Strategy for Indigenous Business.

1. Eligibility Criteria

Key Messages

  • At the time of registration on the Indigenous Business Directory (IBD), the applying business provides Indigenous Services Canada with documents that demonstrate eligibility as per the criteria outlined in the Procurement Strategy for Indigenous Business (at least 51% owned and controlled by Indigenous people).
  • To be eligible for the Procurement Strategy for Indigenous Business businesses must be at least 51% Indigenous owned and controlled, and when contracts are set-aside for only Indigenous businesses to bid on, at least 33% of the value of the work must be done by the Indigenous contractor, and/or a combination of the prime and Indigenous subcontractors.

Background

In order to be registered on the IBD, business owners must be First Nations, Inuit or Métis and ordinarily resident in Canada. At the time of registration on the IBD, the applying business provides Indigenous Services Canada (ISC) with documents that demonstrate eligibility as per the criteria outlined in the Procurement Strategy for Indigenous Business (PSIB) (at least 51% owned and controlled by Indigenous people).

Evidence considered for registration on the IBD of being an Indigenous person includes, but is not limited to:

  • Indian registration in Canada
  • Citizenship with the Manitoba Métis Federation, the Northwest Territory Métis Nation, the Métis Nation Saskatchewan; or a Governing Member of the Métis National Council, including: the Métis Nation Saskatchewan; the Métis Nation of Alberta; the Métis Nation British Columbia and the Métis Nation of Ontario
  • Membership in an affiliate of the Congress of Aboriginal Peoples, or other recognized Indigenous organization in Canada
  • Acceptance as an Indigenous person by an established Indigenous community in Canada
  • Enrolment or entitlement to be enrolled pursuant to a comprehensive land claim agreement, or membership or entitlement to membership in a group with an accepted comprehensive claim

Ownership of an Indigenous business refers to "beneficial ownership" meaning who is the real owner of the business. ISC may consider a variety of factors to satisfy whether Indigenous persons have true and effective control of an Indigenous business. The business must also provide other information related to the business, including corporate structure and governance.

Evidence of being resident in Canada includes a provincial or territorial driver's license, a lease or other appropriate document.

To be eligible for the Procurement Strategy for Indigenous Business businesses must be at least 51% Indigenous owned and controlled, and when contracts are set-aside for only Indigenous businesses to bid on, at least 33% of the value of the work must be done by the Indigenous contractor, and/or a combination of the prime and Indigenous subcontractors.

Current Status

  • Businesses listed on a modern treaty beneficiary business list are confirmed to be Indigenous by the Indigenous group that Canada has signed the modern treaty with.
  • In addition to verifying eligibility prior to registering a business on the IBD, ISC verifies businesses have maintained their eligibility on an ongoing basis.
  • ISC ensures the integrity of PSIB and the IBD multiple ways, including verifying that businesses meet the criteria when registering, as well as regularly revalidating eligibility.

2. Indigenous Business Directory

Key Messages

  • The Government of Canada takes the issue of non-Indigenous businesses posing as Indigenous businesses very seriously.
  • While the inclusion of businesses that don't meet the eligibility criteria for Indigenous-ownership and control on the IBD are rare, diligent work to verify all businesses and remove those that don't meet the criteria is ongoing.
  • At the time of registration on the IBD, the applying business provides ISC with documents that demonstrate eligibility as per the criteria outlined in the Procurement Strategy for Indigenous Business (at least 51% owned and controlled by Indigenous people).

Background

What is the Indigenous Business Directory?

The Indigenous Business Directory (IBD) is an evergreen, online, public directory of businesses owned and controlled by Indigenous peoples. The IBD increases opportunities for Indigenous businesses through procurement by helping all levels of government and the private sector identify Indigenous businesses that can fulfill procurement needs.

How many Indigenous businesses are registered on the Indigenous Business Directory?

There are approximately 2939 Indigenous businesses registered on the IBD as of November 13, 2024.

How many Indigenous business are there in Canada?

According to the National Indigenous Economic Development Board, there are more than 50,000 Indigenous businesses in Canada.

What is the registration and verification process?

At the time of registration on the IBD, a business must demonstrate that it is at least 51% owned and controlled by Indigenous peoples.

Applicants seeking to be added to the IBD submit an application to ISC through an online portal. ISC then assesses the application against eligibility criteria, which require businesses to be at least 51% Indigenous owned and controlled.

Before a business is registered on the IBD, a business owner(s) must provide ISC with documentation proving that they are Indigenous and that they are Canadian residents. ISC works with Indigenous communities to validate documentation as authentic.

A business owner(s) must also prove Indigenous ownership and control by providing business information and supporting documents, such as corporate structure and governance documents.

If needed, a third party auditor may be asked to review and verify the information, based on the complexity of the business structure being assessed. For example, a third party auditor may be asked to review and verify the corporate structure or ownership structure to assess whether the 51% Indigenous ownership and control criteria is met in a joint-venture structure.

Evidence considered for registration on the Indigenous Businesses Directory of being an Indigenous person includes, but is not limited to:

  • Indian registration in Canada
  • citizenship with the Manitoba Métis Federation, the Northwest Territory Métis Nation, or a Governing Member of the Métis National Council, including: the Métis Nation Saskatchewan; the Métis Nation of Alberta; the Métis Nation British Columbia and the Métis Nation of Ontario
  • membership in an affiliate of the Congress of Aboriginal Peoples, or other recognized Indigenous organization in Canada
  • acceptance as an Indigenous person by an established Indigenous community in Canada
  • enrolment or entitlement to be enrolled pursuant to a comprehensive land claim agreement, or membership or entitlement to membership in a group with an accepted comprehensive claim

Evidence of being resident in Canada includes a provincial or territorial driver's license, a lease or other appropriate document.

Businesses listed on a modern treaty beneficiary business list are confirmed to be Indigenous by the Indigenous group that Canada has signed the modern treaty with.

Is it easy for a company to be listed on the IBD?

The application process is user friendly, and available online. Applications are closely vetted by ISC staff for completeness and eligibility. Applicants must submit basic company information online, as well as documentation that demonstrates proof of Indigenous ownership and control. ISC works with Indigenous communities to validate proof of Indigeneity documentation as authentic. If needed, ISC will enlist a third party auditor to review and verify the information. For example, ISC may ask a third party auditor to review and verify the corporate structure or ownership structure to assess whether the 51% Indigenous ownership and control criteria is met.

Should businesses encounter difficulties registering for the IBD, they are encouraged to request support from the department directly by contacting ISC at REA-IBD@sac-isc.gc.ca to discuss their application.

What is ISC doing to verify businesses already on the IBD that may not qualify? Is ISC taking steps to improve its registration processes?

Eligibility for registration on the IBD is validated at least every two years for each verified business.

ISC requires businesses to provide acceptable documentation in support of Indigeneity, such as a status card or documentation from organizations and communities that have an established relationship with Canada. ISC does not accept self-identification or membership in organizations not currently recognized by Canada. ISC has been conducting a verification exercise to ensure that businesses on the IBD continue to meet the eligibility criteria.

Registered businesses who were not able to provide proof of eligibility have been removed from the IBD. ISC's IBD maintenance work continues on an ongoing basis. *For information on audits, please see the Audits 101 issue sheet.

Ownership and Control: ISC has strengthened its assessment of Indigenous ownership and control. Evidence of ownership reviewed by the program includes articles of incorporation, shareholder agreements, shareholder registries, bylaws, resolutions, and partnership or joint venture agreements. For businesses owned by multiple individuals, ISC assesses which individuals meet the PSIB Indigenous eligibility criteria and possess at least 51% ownership and control.

Legacy Project: In 2022, ISC conducted a comprehensive review of over 1,500 businesses registered in the IBD prior to 2019. As a result, more than 1,100 businesses were deactivated from the IBD due to non-responsiveness or failure to meet the PSIB eligibility criteria.

3rd party auditor: In July 2024, ISC contracted a new professional consulting firm to conduct compliance audits, including pre- and post-award audits. As of November 2024, ISC is working with these auditors to review and verify all Joint Ventures currently listed in the IBD, ensuring they meet the PSIB eligibility criteria.

We've heard from many Indigenous people and organizations that the ISC-administered Indigenous Business Directory is deeply flawed. Why does the Government create their own list of Indigenous businesses rather than relying on lists developed by Indigenous organizations?

The Government of Canada understands the importance of Indigenous Peoples verifying Indigeneity. The United Nations Declaration on the Rights of Indigenous Peoples and the United Nations Declaration on the Rights of Indigenous Peoples Act calls for a commitment to self-determination.

As part of the five year engagement and co-development process to improve Indigenous procurement policies and programs, Indigenous partners have underlined the crucial importance of Indigenous Peoples being the ones who verify and validate businesses as Indigenous.

Together with Indigenous partners, we are exploring incorporating Indigenous created and administered business lists such as the Manitoba Métis Federation's list and the Inuit Firm Registry Database.

Indigenous Services Canada does in fact use Indigenous business lists that have been created and are maintained by Indigenous Peoples. Specifically, ISC uses Modern Treaty business lists as a way for Indigenous businesses to qualify for PSIB contracts.

What reasons are there for a company to be removed from the IBD?

ISC must maintain compliance with the Privacy Act and the Access to Information Act, and therefore cannot disclose the reasons behind removal for individual companies. Specifically, ISC is required to protect third-party information "that contains trade secrets, financial, commercial, scientific or technical information; that could result in material financial loss or gain to, prejudice the competitive position; [and] that could interfere with contractual negotiations" (Access to Information Act 20(1)).

Generally, A company may be removed from the IBD if for any reason ISC is not able to verify compliance with eligibility criteria.

A company may also be removed if a supplier is debarred or suspended by PSPC's Office of Supplier Integrity and Compliance, which is mandated to strengthen the integrity and oversight of the procurement process to ensure that Canada does not contract with suppliers of concern.

Does being listed on the IBD mean that a business will receive contracts?

Being listed on the IBD simply means that a business has been deemed Indigenous as per IBD criteria. It does not guarantee that the business will receive contracts set aside for Indigenous businesses, as the majority PSIB contracts, like non-PSIB contracts, are competitive.

Can businesses on the IBD receive federal contracts that are not set-aside through the Procurement Strategy for Indigenous Business?

Yes, businesses registered on the IBD routinely compete for and are awarded contracts that were not set-aside through the Procurement Strategy for Indigenous Business. Such contracts count towards the government's minimum mandatory 5% target. In fiscal year 2022-2023 (the first year that departments were required to report data to ISC as part of the mandatory minimum 5% Indigenous procurement target), roughly half of the value of Government of Canada contracts awarded to Indigenous businesses were awarded to IBD businesses through contracts not set-aside through PSIB.

Current Status

ISC continues to actively engage Indigenous partners to co-develop a new Transformative Indigenous Procurement Strategy that will improve procurement policies, safeguards, and processes for Indigenous businesses.

A key piece of this collaborative work is determining a path forward to transferring the administration of the IBD to Indigenous partners, so Indigenous Peoples are determining who qualifies as an Indigenous business.

Presently, ISC continues to maintain the IBD and Government of Canada procurement officer rely on the IBD and Modern Treaty business lists to identify Indigenous businesses that can fulfill procurement needs.

3. Procurement Strategy for Indigenous Business

Key Messages

  • The Procurement Strategy for Indigenous Business sets aside (or limits) bidding to Indigenous businesses in federal procurement processes. Contracts set-aside under the Procurement Strategy for Indigenous Business are one way that departments and agencies support Indigenous businesses to grow. Procurement has a direct positive impact on the Indigenous person or people who own the business and an indirect positive socio-economic impact on broader communities.
  • To be eligible for the Procurement Strategy for Indigenous Business businesses must be at least 51% Indigenous owned and controlled, and when contracts are set-aside for only Indigenous businesses to bid on, at least 33% of the value of the work must be done by the Indigenous contractor, and/or a combination of the prime and Indigenous subcontractors.

Background

The Procurement Strategy for Indigenous Business (PSIB) sets aside (or limits) bidding on federal contracts for goods, services or construction to Indigenous businesses, as defined by PSIB eligibility criteria.

It is mandatory for procurement officers in each Government of Canada department and agency to use a PSIB set-aside in procurements that are destined for an area where Indigenous peoples make up at least 51% of the population and/or where the Indigenous population will be the recipient of the good, service or construction, and when there is no conflict with modern treaty procurement obligations. It is voluntary for Government of Canada procurement officers to use a PSIB set-aside otherwise.

Indigenous content criterion dictates that at least 33% of the total value of work performed under a PSIB contract is performed by the Indigenous business awarded the contract or by a combination of that business and other businesses (such as subcontractors) that also meet the 51% Indigenous ownership and control criterion.

What businesses are eligible to win PSIB contracts?

To be eligible for a PSIB contract, an Indigenous business must meet the PSIB requirements, which are 51% Indigenous ownership and control, as well as demonstrate ability to meet the 33% Indigenous content requirement throughout the life of the contract. Further, an Indigenous business must be actively registered on the IBD or a modern treaty business list at the time of the contract award.

How do joint ventures work with PSIB?

Joint ventures are one way Indigenous businesses can build their capacity and benefit from skills development and knowledge transfer. Indigenous-controlled joint ventures may bid on opportunities that have been set aside for Indigenous businesses, as long as the joint ventures continue to meet the PSIB criteria of 51% Indigenous ownership and control and they meet the 33% Indigenous content criterion throughout a contract.

What is the history of the PSIB?

In 1995, Cabinet approved the eligibility criteria for the Procurement Strategy for Aboriginal Business, now known as the PSIB. In 1996, PSIB launched and since then, it has supported Indigenous businesses in the federal procurement process. Between 2018 and 2021, the Government of Canada held consultations with Indigenous businesses, and minor updates were made in 2021 to reflect what we heard in those consultations. Since 2021, significant engagements have been underway on possible transformation of the program as part of the 2021 mandate to develop a transformative Indigenous procurement strategy. *See section on Reforms for latest information.

4. Reforms – Transformative Indigenous Procurement Strategy

Key Messages

  • In 2021, ISC established a five-year process to engage partners and co-develop a Transformative Indigenous Procurement Strategy to improve existing Indigenous procurement policies and programs.
  • This five-year process is currently underway. ISC is actively listening to the advice and experience of Indigenous partners.
  • A key piece of this collaborative work is determining a path forward to transferring the administration of the IBD to Indigenous partners, so Indigenous Peoples are determining who qualifies as an Indigenous business.

Background

ISC continues to actively work with Indigenous partners to co-develop a new Transformative Indigenous Procurement Strategy (TIPS) that will improve procurement policies and processes for Indigenous businesses.

A key piece of this collaborative work is determining a path forward to transferring the administration of the IBD to Indigenous partners, so Indigenous Peoples are determining who qualifies as an Indigenous business.

ISC's work on a TIPS is in line with principles of self-determination committed to under the UN Declaration on the Rights of Indigenous Peoples Act.

What specific reforms are being considered?

Discussion at the co-development tables focused on the following priorities:

  1. Transfer of definition and verification function of an Indigenous business to Indigenous peoples and cease operations of the ISC-led Indigenous Business Directory;
  2. Change current procurement policy requirements, to remove complex national set asides and put in place options for limited bidding locally and regionally and put in place mandatory requirements for Indigenous participation plans in contracts (such as employment, training or subcontracting expectations).
  3. Continue to co-develop options such as a single window online portal to collect, managed outside of government, to share verified business information from recognized Indigenous organizations, and various kinds of business lists.
  4. Simplify all procurement processes; this includes incorporating more guidance to support Indigenous businesses such as concierge and recourse mechanisms for Indigenous businesses working with government.
  5. Develop interim implementation strategies to ease transition to new processes and policies for procurement officials. This includes providing a catalogue of direct links to existing business lists on ISC's website and update existing procurement processes and policy guidance on best practices related to engagement and Indigenous participation plans until co-development of larger policy changes and single-window portals is complete.

Other key issues raised at the co-development table and other consultations included concepts such as supporting a First Nations Procurement Organization, adopting new definitions of Indigenous businesses and developing a single authoritative source for business lists using Indigenous organizations' information. However, clear consensus did not emerge on these issues, and further discussion is needed (particularly on a distinctions basis with First Nation, Inuit and Métis leaders).

Which Indigenous partners is ISC working with on transformation? 

ISC has provided funding to and worked closely on reforms with 30 National Indigenous Organizations and Indigenous economic organizations and regional organizations. Some of these partners are the National Aboriginal Capital Corporations Association (NACCA), the Canadian Council for Indigenous Business (CCIB), the Assembly of First Nations (AFN), the Métis National Council (MNC), Inuit Tapiriit Kanatami (ITK).

As a co-development table, members first met in April 2024, with subsequent meetings in May, June and September (a combination of virtual and in person). The table was expanded to 30 members and relaunched for co-development based on the mandate provided by government in 2021 to co-develop implementation plans and further policy and program transformation related to Indigenous procurement.

Over the last two years, ISC, supported by various regional and national Indigenous organizations held over fifty (50) engagements and relationship-building sessions. Through these various sessions a mix of approximately five-hundred and fifty (550) National Indigenous Organizations, Indigenous businesses, Indigenous economic development officers/organizations, Indigenous leaders and Indigenous financial institutions were engaged.

In addition to these engagements, ISC has also funded research and capacity building initiatives with Canadian Council for Indigenous Business (CCIB), the Council for the Advancement of Native Development Officers (CANDO) and the First Nations Financial Authority (FNFA). They conducted research and developed proofs of concept to demonstrate transformation opportunities in procurement. For example, FNFA developed research and pilots related to bid bonding, CANDO developed proof of concepts for integrated single window business data and CCIB led its Supply Change initiative.

ISC established a funding agreement with AFN in December 2022 to support their engagement and research related to procurement and economic development. AFN staff have also participated at TIPS co-development table meetings throughout 2024.

Current Status

ISC continues to engage with Indigenous organizations and businesses through meetings of its co-development table, permanent bilateral mechanisms, and regular meetings with National Indigenous Organizations and National Indigenous Economic Organizations. ISC is pursuing consideration for proposals for reform and further co-development work as part of its Economic Reconciliation strategy through Fall 2024.

5. What is the 5% Target?

Key Messages

  • In August 2021, the Government announced the implementation of a mandatory requirement for federal departments and agencies to ensure a minimum of 5% of the total value of contracts are held by Indigenous businesses annually.
  • In fiscal year 2022-2023, the Government of Canada awarded over $1.6 billion in contracts to Indigenous businesses. This represents 6.27% of the value of all federal contracts awarded in fiscal-year 2022-23.
  • The 5% target tracks any federal contracts with Indigenous businesses that are at least 51% owned and controlled by Indigenous peoples. This includes contracts set aside for limited competition through PSIB, contracts won in open competition, contracts with modern treaty beneficiary businesses and others such as sub contracts where they can be tracked.
  • It is important to note that 5% is the floor and not the ceiling. Departments are encouraged to exceed 5%, as ISC has done for fiscal year 2022-2023. ISC awarded 17.68% of the value of contracts to Indigenous businesses.

Background

The Government of Canada's mandatory minimum 5% Indigenous procurement target requires all federal departments and agencies to ensure that by 2024-2025 fiscal year-end, a minimum of 5% of the total value of contracts are held by Indigenous businesses.

Indigenous Peoples in Canada comprise approximately 5% of the overall Canadian population; however, they were consistently awarded a lower percentage of federal contracts. The 5% target was set to align with that population and seeks to leverage government spending to help grow Indigenous businesses and improve the socio-economic conditions of Indigenous communities.

How is a business deemed to be Indigenous, for the mandatory 5% minimum Indigenous procurement target?

For the purposes of the 5% target, an Indigenous business is defined as at least 51% Indigenous owned and controlled, and at least one of the following:

  • owned and operated by Elders, band and tribal councils
  • registered in the Government of Canada's Indigenous Business Directory
  • registered on a modern treaty beneficiary business list
Which contracts count towards the mandatory minimum 5% target?

Any contract or subcontract awarded to a business which meets the definition above can count towards the minimum 5% target. This can include various procurement mechanisms, such as:

  • Contracts awarded under Procurement Strategy for Indigenous Businesses (PSIB) set-asides
  • Contracts awarded to beneficiaries of modern treaty to meet procurement obligations of applicable Modern Treaties
  • Contracts awarded to Indigenous businesses registered on the Indigenous Business Directory (IBD) or a beneficiary of a Modern Treaty
  • Other types of contracting opportunities that departments may track and that meet the same criteria for Indigenous businesses, for example subcontracting opportunities awarded to Indigenous businesses or contracts entered into by acquisition cards valued at $10,000.00 or less

Departments are responsible for tracking their contracts and verifying the suppliers meet the criteria for Indigenous businesses before seeking the approval of their Deputy Heads and submitting to ISC.

How is the total value of contracts awarded to Indigenous businesses calculated?

The percentage is determined by each department; they calculate the total value of contracts awarded to Indigenous businesses during the fiscal year (A) divided by the total value of all contracts awarded during the fiscal year (B) less deputy head-approved exceptions (C) for that fiscal year, and multiplying the result by 100. This figure is used to measure results in, and plans for, meeting the minimum 5% target.

Formula: A∕(B−C)×100%

This information is approved by Deputy Heads and submitted to ISC for assembly into public reports published annually.

What are the results to date of the mandatory minimum 5% Indigenous procurement target?

Data for fiscal year 2022-2023 (the first year that departments were required to report data to ISC as part of the mandatory minimum 5% Indigenous procurement target) is publicly available on the Open Government portal in the online report on the mandatory minimum 5% target for fiscal year 2022-2023. In fiscal year 2022-2023, $1,6B was awarded to Indigenous businesses. This represents 6.27% of the value of all federal contracts awarded in fiscal-year 2022-23.

As fiscal year 2022-23 was the first year that departments were required to report data to ISC as part of the mandatory minimum 5% Indigenous procurement target, ISC does not have data for total contract values awarded to Indigenous businesses for other fiscal years.

In line with Treasury Board Directive on the Management of Procurement, ISC must publish government-wide data on the mandatory minimum 5% Indigenous procurement target within 12 months after fiscal-year end.

Some Indigenous partners have been critical of the results reported against the 5% target of $1.6B in 2022-2023. Is the Government's reporting accurate?

The Government of Canada's methodology is robust and detailed in the public report on the mandatory minimum 5% target fiscal year 2022-2023.

The reports are submitted by each department to ISC, and signed off by their Deputy Ministers. ISC officials verify the information meets the policy requirements and works with departments to update as required, before conducting further analysis and publishing findings. In addition, raw data is published on the GC's Open Government portal that demonstrates this result.

Current Status

  • Data for fiscal year 2022-2023 (the first year that departments were required to report data to ISC as part of the mandatory minimum 5% Indigenous procurement target) is publicly available on the Open Government portal in the online report on the mandatory minimum 5% target fiscal year 2022-2023. In fiscal year 2022-2023, $1,632,326,114 was awarded to Indigenous businesses. This represents 6.27% of the value of all federal contracts awarded in fiscal-year 2022-23.
  • As fiscal year 2022-23 was the first year that departments were required to report data to ISC as part of the mandatory minimum 5% Indigenous procurement target, ISC does not have data for total contract values awarded to Indigenous businesses for other fiscal years.
  • ISC is currently collecting departments DM approved procurement reporting data for 2023-24, from 96 departments and agencies. That information is due by November 2024. In line with Treasury Board Directive on the Management of Procurement, ISC will publish government-wide data on the mandatory minimum 5% Indigenous procurement target within 12 months after fiscal-year end.

6. Roles and Responsibilities

Key Messages

  • Indigenous Services Canada plays an advisory and administrative role in the operations of the Procurement Strategy for Indigenous Business.
  • Each department and agency is responsible for the contracts they award, including ensuring that the contractor complies with the requirements of the Procurement Strategy for Indigenous Business.

Background

What is Indigenous Services Canada's role in Indigenous procurement?

Indigenous Services Canada's role is to:

  • Register and validate Indigenous businesses on the IBD and perform audit function, including pre-award and post-award and discretionary audits;
  • Lead the development of new measures and guidance on the PSIB;
  • Lead coordination, outreach, and raise awareness to the federal procurement community and Indigenous business community;
  • Coordinate departmental procurement plans in order to support monitoring and reporting activities;
  • Point of contact for advice and interpretation of the PSIB;
  • Consolidate and publicly report annually on departmental results on meeting the target of at least 5%; and
  • Lead meaningful engagement and consultations that is accessible to Indigenous partners and the federal procurement community for a longer-term transformative Indigenous Procurement Strategy.
What is the role of the Treasury Board of Canada Secretariat in Indigenous procurement?

The role of the Treasury Board of Canada Secretariat (TBS) is to:

  • Support ISC in the development of new measures and guidance on the PSIB;
  • Support PSPC in the provision of policy advice on complex procurements and those requiring TB approval;
  • Establish reporting requirements to publicly disclose quarterly on Open Government portal to ensure transparency and accountability;
  • Support ISC in developing mandatory government-wide training and tools for federal officials; and,
  • Provide reporting expertise on the long-term transformative Indigenous Procurement Strategy with Indigenous partners and corporate Canada.
What is Public Services and Procurement Canada's role in Indigenous procurement?

Public Services and Procurement Canada's role is to:

  • Support ISC in the development of new measures and guidance on the Indigenous Procurement Strategy, including the application of weighting and rating of Indigenous participation plans;
  • In collaboration with ISC, coordinate outreach and raise awareness to Indigenous businesses on the federal government's procurement process;
  • Coordinate outreach and raise awareness to the federal procurement community;
  • Develop standing offers/supply arrangements to stimulate Indigenous development in key commodities;
  • Draft and/or update contract clauses based on ISC guidance;
  • Together with ISC, work with Indigenous partners to identify, reduce, and eliminate barriers to federal procurement; and,
  • Provide operational expertise on the long-term transformative procurement strategy with Indigenous partners and corporate Canada.
What is ISC's role in the implementation of the 5% target?

Per the Directive on the Management of Procurement, 96 departments and agencies included in Schedules roman numeral 1, roman numeral 1.1. and roman numeral 2 are required to submit to ISC reports on their performance against the mandatory minimum 5% Indigenous procurement target.

Based on data received from departments and agencies, a report on the government-wide performance against the mandatory minimum target for the year 2022/2023 was published on GC's Open Government website in March 2024.

Per the Directive on the Management of Procurement, ISC is also responsible for issuing an annual call letter that requires deputy heads to submit procurement plans for meeting the mandatory minimum target for the following fiscal year and publishing information on government-wide performance against the mandatory minimum target within 12 months after fiscal year-end.

This planning data identifies not only areas in which a demand for Indigenous procurement is anticipated, but also areas where Indigenous business capacity gaps have been observed.

Is fraud prevention part of PSPC's role? Is it part of ISC's in relation to Indigenous procurement?

Every department and agency, including ISC, has an important role to play in fraud prevention.

If ISC suspects that a business has committed fraud, ISC will take all necessary steps, including referring the suspected fraud to law enforcement.

Public Services and Procurement Canada (PSPC) also has a role in preventing, detecting and responding to fraud in order to safeguard the integrity of federal procurements. For example, In May 2024, PSPC announced the establishment of the Office of Supplier Integrity and Compliance to strengthen the integrity and oversight of the procurement process to help ensure that Canada does not contract with suppliers of concern. ISC officials are working with PSPC and the Office of Supplier Integrity to develop processes for improving processes and communications on suspected issues of fraud

7. Audits & Compliance

Key Messages

  • Compliance audits are one way that ISC ensures businesses delivering contracts awarded under the Procurement Strategy for Indigenous Business meet the policy's criteria.
  • There are three main types of audits performed as part of the Procurement Strategy for Indigenous Business.
    1. Pre-Award audits
    2. Post-Award audits
    3. Discretionary audits
  • Audit activity is often led by third party corporate auditors who review business information against program eligibility criteria.
  • Contracting authorities (departments) are responsible for managing contract terms and conditions and ensuring compliance with contract and policy requirements. Audits are an additional measure that can be applied by ISC for additional program integrity.

Background

When a requisitioning department advises ISC of a contract to be awarded under PSIB valued at or greater than $2 million, ISC conducts mandatory pre-award audits to verify that the business meets the ownership and control criteria; however, pre-award audits may be conducted for contracts below the value of $2 million when a need is identified by the requisitioning department, the contracting authority, or ISC.

A business that wins a contract set aside under the PSIB will certify in its bid that it will meet the 33% Indigenous content requirement throughout the contract. This requirement is incorporated into the contract terms and conditions. The requisitioning department is responsible for monitoring compliance with contract terms and conditions that include ongoing Indigenous ownership, control and participation as per the terms of the contract.

Post-award audits can be conducted once a contract has been completed. They verify that the contractor met PSIB criteria throughout the duration of the contract, including the 33% content criteria. Post-award audits are an additional layer of compliance monitoring and should be requested by the requisitioning department when it is suspected that PSIB requirements have not been met throughout the delivery period.

An audit for compliance can also be performed on a discretionary basis. It is not related to any pre- or post-awarded requirement. The purpose of the audit for compliance is to ensure the integrity of the IBD by guaranteeing that businesses registered under the IBD are compliant with PSIB requirements.

What percentage of PSIB contracts could be subject to a pre-award audit? Should pre-award audits be done on all PSIB contracts?

100% of PSIB contracts could be subject to a pre-award audit. However, the Government of Canada takes a risk-informed approach to pre-award audits. Just as the Government of Canada could audit every single tax return that is filed, the government could theoretically conduct a pre-award audit on every single contract awarded through PSIB. This however would be unnecessary, very costly, and would inadvertently punish Indigenous businesses by slowing the procurement process. While they are required for any contract over $2M that uses a PSIB set aside, ISC relies on departments to request them.

How often are audits conducted?

Verifications of Indigenous Business Directory eligibility (51% Indigenous ownership and control) are conducted on each business when they apply for the Indigenous Business Directory. Additionally, ISC verifies the eligibility of each business on the directory every two years as part of the department's ongoing directory maintenance.

Audits are conducted as needed. Specifically, pre-award audits are performed when contracts awarded under PSIB are valued at, or greater than, $2M, or when a need is identified by the requisitioning department, the contracting authority, or ISC.

Post-award audits are an additional layer of compliance monitoring and are requested by the requisitioning department when it is suspected that PSIB requirements have not been met throughout the delivery period. Discretionary audits are conducted as needed.

How many companies have been removed from the IBD since December 2023?

Of the 19 pre-award audits performed since December 2023, 2 of the 14 businesses audited (14%) were found to be non-compliant with eligibility criteria. These businesses were removed from the IBD.

Audit report details cannot be released as they contain third party commercial information, and business owners' personal information.

Further information, including audit reports completed since 2021 (with identifiers redacted) has been provided to this committee, based on a request from ISC's October 24 appearance.

What happens if a company is found compliant in a pre-award audit but found non-compliant in a post-award audit?

It's possible for a business to be found compliant in a pre-award audit, but non-compliant in a post-award audit as the company may have failed to ensure its compliance with the 33% Indigenous content requirement. Additionally, it's possible that a business's ownership or control has changed during the course of a contract. In cases where a business is found to be compliant in a pre-award audit, but non-compliant in a post-award audit, the Government of Canada could pursue the following:

  • removal of business profile from the IBD
  • forfeiture of the bid deposit
  • retention of the holdback
  • disqualification from participating in future set-aside requirements
  • termination of the contract

Current Status

In fiscal year 2023-24,

  • 798 verifications of new businesses were completed
  • 7 pre-award audits were completed

Since 2023,

  • 19 pre-award audits were completed by 3rd party auditors
  • 16 post-award audits by 3rd party auditors are underway

8. Joint Ventures (JV)

Key Messages

  • There are approximately 2900 businesses registered on the IBD. Of those, 111 business are registered as joint ventures. This represents less than 4% of the total registrations on the IBD.
  • ISC has taken action to launch a reverification of all 111 JVs in the IBD. Work is underway.

Background

What is a joint venture?

A joint venture is defined as a business consisting of 2 or more Indigenous businesses or an Indigenous business and a non-Indigenous business, where the Indigenous business or businesses have at least 51% ownership and control of the joint venture.

Types of documents used to demonstrate compliance include, but aren't limited to:

  • incorporation documents
  • shareholders' or members' register
  • partnership agreements
  • joint venture agreements
  • business name registration
  • banking arrangements
  • governance documents
  • minutes of meetings of board of directors and management committees
  • other legal documents
What are the benefits of joint ventures?

Benefits of joint ventures can include:

  • Businesses of any size can enter into a joint venture agreement
  • Joint Ventures can provide companies with the opportunity to collaborate and combine resources, expertise, and professional networks, helping them grow.
How many joint ventures on the Indigenous Business Directory have received contracts?

Based on a review of joint venture contracting activity in proactive disclosures over the last two calendar years (2023 and 2024), combined with a review of notifications of contract award submitted to Indigenous Services Canada by departments, ISC was able to determine that at least 27 out of the 111 joint ventures listed on the IBD had at least one contract awarded to them in that time period.

It is important to note two limitations with this information.

  1. The search was conducted on exact legal business name as contained in the IBD. This is important to note as proactive disclosure data is subject to data integrity challenges based on user entry (put simply, it is possible that a contract could be listed under a name slightly varied from the legal name; therefore, this search would not have identified those contracts with variations of the legal name).
  2. While departments are required to report contracts under the PSIB to ISC, compliance is spotty. It is virtually certain that PSIB contracts were awarded without ISC being notified; therefore, the data available to ISC to conduct this search does have data integrity challenges.
What is a shell company?

The term 'shell company' can mean different things to different people and can therefore be subjective and nuanced.

Generally, shell companies can be understood as a situation where a non-Indigenous entity or individual takes unfair advantage by an Indigenous business entity or individual for the purpose of gaining access to otherwise inaccessible Indigenous procurement policies or contracts. Unfair advantage involves practices and arrangements that result in the disadvantage or detriment of an Indigenous business, or that do not represent a genuine demonstrated level of equitable partnership and benefit.

Testimony at OGGO previously has stated that the majority of companies on the Indigenous Business Directory are shell companies. Is this true?

Information presented by Regional Chief Joanna Bernard to OGGO on September 24th is not consistent with ISC's data on verified Indigenous businesses on the IBD. ISC reached out to the AFN to verify the source of data that was used to support information presented.

The AFN responded that the Regional Chief's testimony was based in part on the joint investigative report by Global News and the First Nations University of Canada (FNUC) released on August 22, 2024. ISC has reached out to the FNUC to obtain further information on the source data used to support this reporting.

The department looks forward to receiving the evidence available so that appropriate actions can be taken.

In addition, ISC has taken action to launch a reverification of all 111 JVs in the IBD. Work is underway.

Is there any transformation underway in this space?

Based on feedback from Indigenous partners, as well as input from officials overseeing Indigenous procurement in Australia, New Zealand and the United States, ISC is considering strengthened evaluation criteria for joint-venture assessment as part of ongoing transformative work.

Specifically, this could include introducing a requirement for a skills and capability transfer plan which would identify what the Indigenous Joint Venture partner is hoping to gain from their non-Indigenous business partner through the relationship; including how the joint venture company will transfer capability to the Indigenous business (such as the inclusion of milestones, annual reporting) and a requirement for Indigenous participation that would set out in the contract the plans (to outline requirements for education, training, and jobs for Indigenous Peoples).

Is there a requirement for a joint-venture to employ a certain number of Indigenous employees? If no, why not?

No. Indigenous employment is not part of the definition of a joint-venture or any other type of Indigenous business.

There is no requirement that Indigenous businesses operate any differently than non-Indigenous businesses, including who they choose to employ.

9. Non-Compliance with the Procurement Strategy for Indigenous Business

Key Messages

  • There are safeguards designed to ensure compliance with the PSIB at multiple steps throughout the contracting process.

Compliance with the PSIB is enforced throughout the contracting process.

  1. The vendor completes a certification indicating that 33% of the value of the work completed under the contract must be undertaken by an Indigenous business.
  2. The terms and conditions of any contract flow down to subcontractors, thereby binding the subcontractors to the same commitment.
  3. The department receiving the procured good, service or construction must verify throughout the life of the contract that the 33% requirement is met.
  4. There are two audit options that can be leveraged: a discretionary audit, which can be asked for at any time, or a post-award audit, which can be requested after contract completion to verify compliance should concerns exist that the 33% requirement was not met.
What actions are taken by ISC when a business is removed due to not meeting the PSIB eligibility criteria?

When ISC identifies that a business is no longer compliant with the PSIB eligibility criteria, the business is provided an opportunity to rectify the non-compliance. If the non-compliance cannot be rectified, the business is removed from the IBD and is no longer eligible for PSIB contracts. Contracting authorities are advised as appropriate.

Additionally, if the audited business is deemed non-compliant with PSIB, the Government of Canada could pursue the following contractual measures:

  • forfeiture of the bid deposit
  • retention of the holdback
  • disqualification from participating in future set-aside requirements
  • termination of the contract

If warranted (such as suspected fraud), the case may be referred to PSPC's Office of Supplier Integrity and Compliance – where it will be assessed pursuant to the Ineligibility and Suspension Policy.

Based upon this assessment of the specific circumstances of the situation, the Registrar of Ineligibility and Suspension may exercise her authority to suspend or debar the supplier from future contract award with the Government of Canada.

Has the government ever employed one of these four measures in a case where a business was found to be non-compliant with PSIB?

The Government of Canada must maintain compliance with the Privacy Act and the Access to Information Act; therefore, information pertaining to specific cases cannot be shared. The Act stipulates that the department is required to protect third-party information "that contains trade secrets, financial, commercial, scientific or technical information; that could result in material financial loss or gain to, prejudice the competitive position; [and] that could interfere with contractual negotiations" (Access to Information Act 20(1)).

Why would a business found non-compliant not automatically be removed from the IBD, and therefore not eligible for PSIB contracts?

When a business is found non-compliant with the 51% ownership and control requirement and is no longer able to provide the appropriate documentation to prove compliance, it is removed from the IBD and therefore not eligible for PSIB contracts; although, if a post award audit shows that the contractor was unable to meet the 33% content requirement. In some cases of non-compliance is determined only upon conclusion of a contract, through a post-award audit, the requisitioning department may take action such as the retention of a holdback, the termination of a contract, or disqualification from participating in future set-aside requirements.

10. Sub-Contracting and the 33% Content Requirement – Procurement Strategy for Indigenous Business

Key Messages

  • Subcontracting can be an important part of the supply chain - it can support the achievement of broader policy priorities including subcontracting work to Indigenous businesses.

Background

For all PSIB contracts, the Indigenous content criterion requires that at least 33% of the value of the work needs to be performed by Indigenous businesses. Subcontracting is allowed with PSIB contracts, but even when there is subcontracting, at least 33% of the value of the work needs to be performed by a combination of the Indigenous prime and sub-contractors that meet the 51% Indigenous ownership and control criterion.

The 33% Indigenous content requirement does NOT mean that at least 33% of the business' employees must be Indigenous. The IBD and PSIB require that the business meets the 51% Indigenous ownership and control requirement; however, there is no requirement for a business to have a certain number or percentage of Indigenous employees.

Prior to the updates made to the PSIB in 2021, the PSIB did contain requirements related to Indigenous employees. Based on the advice of Indigenous partners via discussions held in 2018-2019, this requirement was removed as it created a barrier for some Indigenous owned and controlled businesses' overall growth.

How is the 33% Indigenous content measured?

When a contract is awarded under PSIB, a contractor will certify in its bid that it will meet the 33% Indigenous content requirement. Further, these content requirements are incorporated into the contract terms and conditions. It is the responsibility of the requisitioning department to monitor compliance with these terms and conditions throughout the life of the contract.

If there are concerns about the delivery of the required content criterion during the life of the contract, ISC or the contracting authority can request a discretionary audit.

Post-award audits are a further compliance measure that can be conducted to verify if the Indigenous business meets the ownership, control, and Indigenous content requirement. Note that this is a rarely used tool; in general the government relies on the management of this requirement through compliance with those contract terms.

Do we track subcontracts?

Subcontracts, under federal procurement, including the PSIB, are not tracked. A department's relationship is with the prime contractor or joint venture.

One way to get a line of sight into activity that may be subcontracted is through Indigenous Participation Plans (IPP). An IPP sets out, in the contract, specific requirements/tracks outputs related to Indigenous participation, training and benefits.

What is your position on shell companies? Do you think this kind of flow through, where an Indigenous prime contractor subcontracts with all non-Indigenous businesses should be allowed?

For all PSIB contracts, the Indigenous content criterion requires that at least 33% of the value of the work needs to be performed by Indigenous businesses. Subcontracting is allowed with PSIB contracts (unless the specific contract terms and conditions say otherwise), but even when there is subcontracting, at least 33% of the value of the work needs to be performed by a combination of the Indigenous prime and sub-contractors that meet the 51% Indigenous ownership and control criterion. This ensures that benefits remain with Indigenous businesses, as intended.

However, the practice of subcontracting in Federal procurement generally could represent an opportunity to explore further to ensure best value and understanding in contracting. This is not specific to the PSIB.

11. Supplier Integrity

Key Messages

  • The Government of Canada takes the issue of non-Indigenous businesses posing as Indigenous businesses very seriously.
  • Every department and agency, including ISC, has an important role to play in fraud prevention. If ISC suspects that a business has committed fraud, ISC will take all necessary steps, including referring the suspected fraud to law enforcement.
  • To date, ISC has not had a situation where we have had to refer a suspected identity fraud to law enforcement.
  • In addition, PSPC's Ineligibility and Suspension Policy that came into effect on May 31, 2024, enables the government to suspend and debar suppliers where it has been determined that they lack business integrity or business honesty in a manner that directly affects their present responsibility, including suppliers who have been found to have breached the Code of Conduct for Procurement.

Background

Who is accountable for Supplier Integrity?

Public Services and Procurement Canada (PSPC) has a role in preventing, detecting and responding to fraud in order to safeguard the integrity of federal procurement. For example, In May 2024, PSPC announced the establishment of the Office of Supplier Integrity and Compliance to strengthen the integrity and oversight of the procurement process to help ensure that Canada does not contract with suppliers of concern.

If warranted the case may be referred to PSPC's Office of Supplier Integrity and Compliance for assessment pursuant to the Ineligibility and Suspension Policy.

What is the Government of Canada doing to address the issue of non-Indigenous businesses posing as Indigenous businesses?

If it is determined that the supplier's conduct demonstrates a lack of business integrity or business honesty that calls into question their present responsibility, the department may refer the case to PSPC's Office of Supplier Integrity and Compliance – where it will be assessed pursuant to the Ineligibility and Suspension Policy.

Based upon this assessment of the specific circumstances of the situation, the Registrar of Ineligibility and Suspension may exercise their authority to suspend or debar the supplier from future contract award with the Government of Canada. ISC officials are working with PSPC and the Office of Supplier Integrity to develop processes for improving processes and communications on suspected issues of fraud

Current Status

ISC continues to actively engage Indigenous partners to co-develop a new Transformative Indigenous Procurement Strategy that will improve procurement policies, safeguards, and processes for Indigenous businesses.

ISC officials are working with PSPC and the Office of Supplier Integrity and Compliance to develop processes for communicating suspected issues of fraud and processes for responding effectively as part of longer term efforts to transform Indigenous procurement policies for the Government of Canada.

12. Fraud Prevention

Key Messages

  • Every department and agency, including ISC, has an important role to play in fraud prevention. If ISC suspects that a business has committed fraud, ISC will take all necessary steps, including referring the suspected fraud to law enforcement.
  • If ISC or the requisitioning department suspect that the business has committed fraud, ISC and the requisitioning department will report it to law enforcement.
  • Public Services and Procurement Canada (PSPC) also has a role in preventing, detecting and responding to fraud in order to safeguard the integrity of federal procurements. For example, In May 2024, PSPC announced the establishment of the Office of Supplier Integrity and Compliance to strengthen the integrity and oversight of the procurement process to help ensure that Canada does not contract with suppliers of concern.
  • ISC officials are working with PSPC and the Office of Supplier Integrity to develop processes for improving processes and communications on suspected issues of fraud

Background

Non-compliance

In cases where a company is found to be non-compliant with PSIB eligibility criteria, the Government of Canada could pursue the following:

  • removal of business profile from the IBD
  • forfeiture of the bid deposit
  • retention of the holdback
  • disqualification from participating in future set-aside requirements
  • termination of the contract
What is the Government of Canada doing to address the issue of non-Indigenous businesses posing as Indigenous businesses or other fraudulent behaviour?

If it is determined that the supplier's conduct demonstrates a lack of business integrity or business honesty that calls into question their present responsibility, the department may refer the case to PSPC's Office of Supplier Integrity and Compliance – where it will be assessed pursuant to the Ineligibility and Suspension Policy.

Based upon this assessment of the specific circumstances of the situation, the Registrar of Ineligibility and Suspension may exercise their authority to suspend or debar the supplier from future contract award with the Government of Canada.

If ISC or the requisitioning department suspect that the business has committed fraud, ISC and the requisitioning department will report it to law enforcement.

Terms & Conditions specific to any contract govern whether financial penalties can be levied, if warranted (such as suspected fraud/theft). These are managed by contracting authorities on a case by case basis.

ISC is aware that PSPC has, in fact, referred several cases of possible time theft by subcontractors (e.g. subcontractors billing multiple departments for the same hours or work) to the RCMP. Again, these are issues that are managed by contracting authorities as per their contract terms and conditions.

ISC officials are working with PSPC and the Office of Supplier Integrity to develop processes for communicating suspected issues of fraud and processes for responding effectively as part of longer term efforts to transform Indigenous procurement policies for the Government of Canada.

13. Possible Office of the Auditor General Review

Key Messages

  • The Office of the Auditor General has confirmed work on Indigenous procurement is now on their 2026 audit plan.
  • Indigenous Services Canada will fully comply with the Office of the Auditor General's work on Indigenous procurement when required.
  • The department accepts the Indigenous Services Canada Evaluation Report's key findings and has begun implementing recommendations as outlined in its management response action plan.

Background

In September 2024, media reported that the Assembly of First Nations, the Algonquin Anishinabeg Nation Tribal Council, and the Assembly of First Nations Québec and Labrador asked the Auditor General of Canada to audit PSIB and the IBD. The media report quotes an Auditor General of Canada spokesperson as saying the office is "currently assessing" the request.

On October 22, 2024, media reported that the Auditor General of Canada confirmed to the House of Commons that her office will conduct a full audit of all government contracts awarded to GC Strategies. GC Strategies is not an Indigenous business. It has never been listed on the IBD and it has never received a contract that was set aside under PSIB. It has been registered on the IBD in the past as part of a joint venture with Dalian Inc, but was removed from the IBD in December 2023.

From 2021-2023, ISC Evaluation undertook an evaluation of the Indigenous Entrepreneurship and Business Development Program, covering the five-year period from 2015-16 to 2020-21. This Indigenous Entrepreneurship and Business Development Program consists of three complementary sub-programs that support Indigenous entrepreneurs in Canada: Access to Capital, Access to Business Opportunities and Procurement Strategy for Indigenous Business programs. The evaluation assessed the programs' relevance, effectiveness and efficiency. The evaluation made five recommendations. The evaluation recommended that ISC engage First Nation, Inuit and Métis partners to explore options to transfer the full Indigenous Entrepreneurship and Business Development program, including the Indigenous Business Directory.

The evaluation also recommended that ISC standardize the PSIB Coordinator role and provide ongoing centralized support to the PSIB Coordinator Network.

Current Status

  • As of November 13, 2024, the Office of the Auditor General of Canada has advised ISC's Audit team that Indigenous procurement is currently scheduled on their 2026 audit plan.
  • The department accepts the ISC Evaluation report's key findings and has begun implementing recommendations as outlined in its management response action plan. The recommendations have been partially implemented and this work continues. These actions are detailed in the management response action plan.
  • Crown-Indigenous Relations and Northern Affairs Audit and Assurance Services is undertaking an audit of the Procurement Strategy for Indigenous Business covering the period from April 1st, 2022 to March 31st, 2024. This is expected to be completed by May 2025.

14. Modern Treaty Lists

Key Messages

  • Respecting Modern Treaty procurement obligations is one way that the Government of Canada supports Indigenous procurement.
  • Modern Treaty business lists consist of Indigenous businesses in the Modern Treaty area, as verified by the Modern Treaty signatory.

Background

Modern Treaties often detail procurement obligations that the Crown must respect. Respecting these obligations is one way that the Government of Canada supports Indigenous procurement. For example, these can include a right of first refusal for businesses owned by Modern Treaty beneficiaries, or requirements to limit bidding to businesses owned by a Modern Treaty beneficiary.

Modern Treaty rights holders may develop and maintain lists of Indigenous businesses in the area covered by that Modern Treaty. A business listed on a Modern Treaty list is eligible to receive contracts set aside under PSIB, and is therefore eligible to be counted toward the 5% target.

Current Status

Whenever conducting procurements subject to modern treaty obligations, Canada will ensure that any strategy applied does not infringe upon the constitutionally-protected rights of beneficiaries.

15. Success Stories

Key Messages

  • The PSIB benefits a variety of companies. As per data publicly available on the Open Government portal, in the fiscal year 2022-2023, over 300 different Indigenous business were awarded contracts valued over $10,000 that were set-aside under the Procurement Strategy for Indigenous Business. 
  • The PSIB provides Indigenous businesses with a competitive edge, enabling them to compete in a more limited pool of bidders. This allows them opportunities to grow and helps Indigenous businesses expand nationally.
  • The PSIB can support Indigenous business owners in generating sustainable revenues, stimulating local development and employment opportunities for Indigenous people which can advance economic independence.

Background/Current Status

Through various engagements, panels, and training sessions, ISC has had the privilege to hear success stories from Indigenous businesses that can be attributed to the PSIB. A sample is provided below.

Business Testimony Success Story 1:

PSIB has supported Indigenous businesses by providing opportunities to expand their operations to other geographic locations in Canada, including facilitating meaningful Indigenous participation in federal projects.

A business owner based in the Prairies shared a story about learning of a project in the National Capital Region that included Indigenous engagement through a PSIB set- aside. This opportunity allowed the company to expand beyond their local operations and compete on national and regional opportunities.

After securing a contract for work on the initial project, the company began to win award for more federal projects, leveraging their Indigenous knowledge and experience. This enabled them to employ and train Indigenous people, contributing to local economic development.

Business Testimony Success Story 2:

Limiting bidding exclusively among Indigenous businesses can be an effective way of increasing the participation of Indigenous business owners in federal procurement, as well as supporting their further development as a business.

A business owner shared a story about how PSIB set-asides provided his company a competitive edge. Starting as a one-person operation, he leveraged PSIB contracts compete for increasingly large opportunities to grow his company into one of the main office furniture suppliers in his province.

Business Testimony Success Story 3:

The PSIB is a way for Indigenous business owners to help generate sustainable revenues and advance self-determination and economic independence for Indigenous peoples.

A business owner shared that he strategically leverages the PSIB, setting up searches and bidding practices to compete specifically on PSIB set-aside opportunities. He always includes benefit payments as part of his bid for the participation of local First Nations with a focus on job creation and economic opportunities to propel the local Indigenous community forward.

Positive Media Stories and examples of best practices:

Leading practice example: The Manitoba Métis Federation (MMF), the National Government of the Red River Métis, and their Red River Métis business registry is a demonstration of Indigenous self-government and self-determination in action. Their established approach serves as a leading practice for Indigenous business directories in Canada.

Based on direction and definitions set by the MMF, the directory is administered by one of their Affiliates, the Louis Riel Capital Corporation which makes the business registry available publicly through an online directory.

The MMF's Red River Métis business registry is a trusted and expanding resource currently featuring 764 verified Red River Métis-owned businesses. Each business listed is validated for Red River Métis Citizenship with the MMF's Central Registry Office, and 51% or more majority ownership verified by the Louis Riel Capital Corporation. The verification process ensures that the online platform is a legitimate and reliable tool to connect buyers with Red River Métis-owned businesses.

Over the past five years, the registry and its online directory have boosted procurement opportunities for Red River Métis businesses, driving economic participation for MMF Citizens and contributing to Canada's economy. Governments, corporations, and other organizations committed to diversifying their supply chains increasingly rely on the MMF's Red River Métis business registry to access high-quality suppliers.

In an op ed, Tabatha Bull, president and CEO of the Canadian Council for Indigenous Business, stated that "Positive stories of Indigenous business innovation and success are not only missing but overshadowed by negative or controversial coverage." She further states "certain media narratives are focussed on questioning the legitimacy and necessity of such policies—and Indigenous businesses themselves—against standards I have not seen non-Indigenous businesses held to. " She continues to say that the framing of alleged misuse or failure perpetuates harmful stereotypes and prejudice and creates questions surrounding the competency and legitimacy of Indigenous businesses.

16. Indigenous Economic Development Programs

Key Messages

  • Federal support for Indigenous businesses does not come from only one program. Instead programming is accessed via numerous programs, initiatives, and supports that are delivered by many departments, agencies and Indigenous partners who deliver supports that the Government of Canada has devolved.
  • Indigenous Services Canada delivers various economic development programs.

Background

In addition to the PSIB, ISC delivers the following economic development programs.

The Aboriginal Entrepreneurship Program – Access to Capital stream (AEP-ATC) provides annual, ongoing funding via the network of Indigenous Financial Institutions (IFIs) and Métis Capital Corporations (MCCs) to support Indigenous business development. The program provides support to Indigenous small and medium-sized businesses with a non-repayable equity contribution and businesses services to start, expand or acquire a business. 

The Aboriginal Entrepreneurship Program – Access to Business Opportunities (AEP-ABO) stream provides national level funding to promote a culture of entrepreneurship through national Indigenous organizations to improve access to business opportunities and to enhance the capacity of Indigenous businesses.

The Strategic Partnerships Initiative (SPI) is a horizontal program that promotes collaboration, stimulates economic partnerships and supports holistic investment strategies in addressing program gaps. The Initiative involves 22 federal partners, to identify complex Indigenous economic development opportunities.

The Lands and Economic Development Support Program (LEDSP) enables First Nation and Inuit communities to deliver economic development services, such as community economic development planning, capacity development initiatives and proposal development.

The Community Opportunity Readiness Program (CORP) provides project-based funding for First Nation and Inuit communities located in the provinces for a range of activities to support their pursuit of economic opportunities, including development of community-owned businesses.

Current Status

ISC strives for service excellence in support of service transfer in the delivery of all programming.

17. Economic Reconciliation

Key Messages

  • Advancing economic reconciliation and Indigenous economic self-determination is critical to advancing Canada's commitments to the United Nations Declaration on the Rights of Indigenous peoples (UNDRIP), and the UNDA Action Plan.
  • Indigenous Services Canada is working with First Nations, Métis and Inuit partners to develop an Economic Reconciliation Framework to guide the actions Canada will take to advance economic reconciliation.
  • Procurement is an important tool government can use to advance economic reconciliation.

Background

Economic reconciliation is a concept that is used to advocate for more meaningful inclusion of Indigenous Peoples in the economy, the ability for Indigenous groups to determine their own priorities (self-determination), and means of achieving greater economic prosperity.

In line with the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), economic reconciliation contributes to Canada's obligation to acknowledge and repair the ongoing effects of damaging and discriminatory colonial economic policies and clear a path for Indigenous peoples to pursue economic self-determination.

Current Status

Canada is working with Indigenous partners to develop an Economic Reconciliation Framework (Framework), which will affirm Canada's commitment to economic reconciliation and set a vision where Indigenous economic self-determination is the means of realizing improved economic outcomes. In this spirit, Canada will need to focus on removing regulatory, legislative and administrative barriers, supporting Indigenous visions, and prioritize inclusion of Indigenous peoples in the Canadian economy. 

The Framework is being developed through a co-development process where First Nations, Inuit, and Métis policy leads are developing medium-term visions for economic reconciliation and advancing a set of priority proposals for action. These economic priorities build on leading publications like the National Indigenous Economic Strategy and First Nations Financial Management Board's Roadmap Project.

18. Contracts Awarded to Indigenous Businesses at ISC

Key Messages

  • Indigenous Services Canada is committed to fostering economic reconciliation leading to opportunities for Indigenous businesses through the mandatory minimum target of 5% of the dollar value of federal contracts awarded to Indigenous businesses. The Department achieved an overall result of 13.5% in 2023/2024 representing $53.5M in contract value.
  • The following are the main business lines where contracts for Indigenous businesses were awarded:
    • IT Services – 30%
    • General Management /Ops – 15%
    • Professional Designations – 16%
    • Indigenous Learning – 23%
    • Management Consultants – 16%
  • Indigenous Services Canada has set a target of 15% for 2024-2025

Background

  • On April 1, 2022, the Mandatory Procedures for Contracts Awarded to Indigenous Businesses took effect. The Procedures set out the Government of Canada's requirements to ensure that a mandatory minimum target of five percent of the total value of contracts is awarded to Indigenous businesses annually. It also refers to the requirements for public disclosure of contracts awarded to Indigenous businesses, as well as the reporting requirement on procurement planning and performance against the 5% target.
  • The Chief Finances, Results and Delivery Officer is the Senior Designated Official for the management of procurement within ISC.
  • The total value of contracts awarded to Indigenous businesses annually:
    • must include the total value of contracts awarded to Indigenous businesses during the fiscal year, and must include contracts entered into by acquisition cards, which are over $10,000;
    • may include the total value of subcontracting opportunities, which the contractor committed to include participation of Indigenous businesses, at the time of contract award to non-Indigenous businesses, during the fiscal year; and
    • may include the total value of contracts awarded during the fiscal year, entered into by acquisition cards valued at $10,000 or less.

Current Status

  • ISC has identified certain areas where barriers exist in contracting with Indigenous businesses, mainly in IT services, Indigenous Learning, Management Consultants and Professional Designations.
  • The barriers stem mostly from the reluctance of Indigenous business willing to be added to the Indigenous Business Directory, and to the lack of Indigenous capacity in specific areas.
  • Programs should consider requesting exemptions in areas where the capacity simply does not exist.

E. Economic Reconciliation

19. Budget 2024 Funding Announcement for the Aboriginal Entrepreneurship Program and Recapitlization of the Métis Capital Corporations

Context:

  • Indigenous Peoples face significant systemic barriers to accessing affordable business financing, which ultimately poses a major barrier to entrepreneurship and economic prosperity.
  • Barriers can include lower average incomes, living in remote locations, gaps in infrastructure, lack of digital access, lower accumulated wealth, incomplete credit histories and lower financial literacy.
  • As the Indigenous population continues to grow, the demand for commercial loans and business supports by Indigenous entrepreneurs has steadily grown as well.
Aboriginal Entrepreneurship Program – Access to Capital
  • The Aboriginal Entrepreneurship Program – Access to Capital provides annual, on-going funding to Indigenous entrepreneurs through a network of Indigenous Financial Institutions and Métis Capital Corporations.
  • The program provides support to Indigenous small and medium-sized businesses with non-repayable equity contributions and business services to start, expand or acquire a business. It also provides funding to Indigenous lenders to cover the costs of borrowing and operations to support their lending activities.
    • This program stream is devolved, meaning operation and administration of the program is through the National Aboriginal Capital Corporations Association for the network of Indigenous Financial Institutions and the five Métis Capital Corporations.
  • Budget 2024 announced $350 million over five years, starting in 2024-25, to renew Canada's commitment to Indigenous Financial Institutions, including $30 million over five years for the Métis Capital Corporations which have, for decades, provided critical support to Métis entrepreneurs and businesses;

Considerations:

  • The Aboriginal Entrepreneurship Program – Access to Capital has been extremely successful in improving access to capital for Indigenous entrepreneurs and businesses. It enhances the capacity of Indigenous business in development and provides financial services, business information and developmental support services to Indigenous entrepreneurs.
  • This funding announcement for the Aboriginal Entrepreneurship Program – Access to Capital, which builds on interim sunsetting funding from Budget 2019 and Budget 2021, will provide much-needed capital for Indigenous Financial Institutions and Métis Capital Corporations to support the growing needs of Indigenous entrepreneurs.
  • The announcement also supports a distinctions-based approach for economic development, which allows for greater authority and additional governance autonomy that enable Indigenous Peoples to decide on the economic elements that affect them.

Next Steps:

  • The government will continue to work closely with partners to implement this funding commitment.
  • The government is also working with the Inuit Tapiriit Kanatami to address the priorities of Inuit-led Indigenous Financial Institutions.

Key Messages:

  • The Government of Canada is committed to working with Indigenous businesses and communities to promote long-term prosperity, job and wealth creation and economic reconciliation.
  • As a demonstration of this commitment, Budget 2024 announced $350 million over five years, starting in 2024-25, to support Indigenous entrepreneurs through the network of Indigenous Financial Institutions, including $30 million over five years for the recapitalization of the Métis Capital Corporations.
  • I am very pleased that the Government of Canada is supporting the important work of Indigenous Financial Institutions and Métis Capital Corporations in helping Indigenous entrepreneurs create and expand their businesses, which builds opportunities for themselves, their families, their communities, and future generations.
  • We will continue to work with Indigenous partners, other governments and the private sector, to increase the participation of Indigenous Peoples in the Canadian economy.

20. Indigenous Clean Energy

Context:

  • Strategic Partnerships Initiative–Clean Energy (SPI-CE) is a top up to the Strategic Partnerships Initiative (SPI), whose secretariat is housed within Indigenous Services Canada. SPI is a unique, whole-of-government federal program that works to increase Indigenous participation in large, complex, multi-year economic opportunities that span a range of sectors and promotes partnerships between multiple federal partners, provincial and territorial governments, and non-federal groups in key economic areas.

Considerations:

  • The investment under Budget 2021 was used to establish four new Regional Indigenous Clean Energy Initiatives in Alberta, Saskatchewan, Quebec, and the Atlantic regions; maintain support for its flagship Indigenous clean energy initiative in British Columbia; and, enable a partnership agreement with the national Indigenous Clean Energy (ICE) organization.
  • Since 2021, SPI-CE regional initiatives have benefitted 112 communities through the development of 50 partnerships, the creation of 1,971 jobs, and the delivery of 805 training opportunities. In particular, SPI-CE has provided funding to advance Indigenous economic development within major projects and initial development activities in 8 provinces, focusing on solar farms, wind projects, biomass generation, and hydrogen projects.

Program-Level Data

  • Budget 2021 invested $36 million over three years (2021-22 to 2023-24) which was renewed March 2024 for an additional three years (2024-25 to 2026-27).

Next Steps:

  • Seek funding allocation approval for future years via the Directors General Investment Committee in December 2024 to support of existing clean energy initiatives in Alberta, Saskatchewan, Manitoba, Quebec, and the Atlantic regions.

Key Messages:

  • Budget 2021 committed $36 million over three years (2021-2024), through the Strategic Partnerships Initiative, to build capacity for local, economically-sustainable clean energy projects in First Nations, Inuit, and Métis communities across the country. This funding was renewed through the recent Budget 2024 announcement, for another three years, starting 2024-25 and continuing until 2026-27.
  • The Strategic Partnerships Initiative offers a means for its network of 22 federal partners to collaborate for the advancement of Indigenous participation in economic development opportunities, such as Clean Energy. It facilitates federal coordination around shared priorities between multiple federal partners, provincial and territorial governments, and non-federal partners within key areas of the Canadian economy. Using its whole-of-government approach, this initiative is able to fill gaps in existing federal programming while building partnerships and leveraging other sources of funds to maximize support for economic development in Indigenous communities.
  • Strategic Partnerships Initiative-Clean Energy complements the larger Off-Diesel Hub, Wah-ila-toos, to streamline and coordinate the delivery of clean energy programming within the federal family, improve program access for communities, reduce overlap of departmental work, and ensure efficiency gains to better support communities in their energy transition – all of which will contribute to achieving Canada's net zero carbon emission targets and goals.
  • The Strategic Partnerships Initiative Secretariat is also working collaboratively with Crown-Indigenous Relations and Northern Affairs Canada as well as Environment and Climate Change Canada to advance Canada's Indigenous Climate Leadership Agenda through a harmonized funding mechanism with a single set of terms and conditions, modelled on those of the Strategic Partnership Initiative.

21. Indigenous Tourism

Context:

  • The Indigenous Tourism Association of Canada (ITAC) is a national not-for-profit organization that provides economic development advisory services, tourism conferences, capacity development training and workshops, industry research, and information for Indigenous tourism operators and communities throughout Canada.
  • Since 2016, ISC has provided funding to ITAC to support and grow the Indigenous tourism industry.

Considerations:

  • Indigenous tourism is an opportunity for Indigenous Peoples to share their cultures, histories and stories with visitors, which thereby supports cultural preservation, revitalization and reconciliation.
  • Indigenous tourism has high-growth potential, generating economic benefits in all regions of Canada. Tourism is an opportunity for Indigenous communities to generate revenue and diversify their economies. In 2022, Indigenous tourism generated $1.2 billion in direct Gross Domestic Product (GDP) and 32,000 jobs. Indigenous tourism is a core part of Canada's tourism brand and could help distinguish Canada globally as a premier tourism destination. Travelers are increasingly interested in local, sustainable and cultural tourism experiences. Research by the Indigenous Tourism Association of Canada and Destination Canada demonstrates that one in three Canadians and 37% of international visitors are interested in Indigenous tourism.
  • The commitment under Budget 2024 will support ITAC's core operations, such as wages and benefits, professional fees, administrative project costs and travel costs, as well as the following pillars: activities; marketing; leadership; partnership; and development. This will help position ITAC to maintain its capacity and programming to support the Indigenous tourism industry through the sustainability of its organization, growing capacity of Indigenous tourism businesses, and growing its partnerships with key stakeholders.
  • Following Budget 2024, ISC received further direction from central agencies noting that: "The Government also decided that future funding is conditional on ISC working with partners to bring forward the national Indigenous tourism strategy by December 2024".

Program-Level Data

Program investments:

  • Budget 2024 - provided ITAC $2.5 million for 2024-2025
  • Budget 2022 - provided ITAC $4.8 million over two years: $2.9 million in 2022-2023 and $1.9 million in 2023-2024
  • Budget 2021 - provided ITAC $2.4 million for 2021-2022. In addition, ISC provided $500,000 as bridge funding for a total of $2.9 million in core funding for 2021-22
  • COVID-19 Economic Response Plan - As part of Canada's 2020 COVID-19 Economic Response Plan, ISC provided ITAC $16 million to administer a stimulus development fund to support Indigenous tourism industry
  • Budget 2017 - ISC provided ITAC $8.66 million over four years, starting in 2017-2018 through to 2020-2021
  • Aboriginal Entrepreneurship Program – Access to Business Opportunities - From 2016 to 2020, ISC's Aboriginal Entrepreneurship Program - Access to Business Opportunities stream provided ITAC $1.9 million for specific projects and events
  • Strategic Partnerships Initiative - From 2016 to 2020, ISC's Strategic Partnerships Initiative provided ITAC $2.5 million to help implement the National Indigenous Tourism Strategy

Next Steps:

  • Work with federal and Indigenous partners to advance the development of a National Indigenous Tourism Strategy.

Key Messages:

  • Indigenous tourism is a major economic driver in First Nations, Inuit and Métis communities and an important part of the Canadian economy.
  • Budget 2024 committed $2.5 million in 2024-2025 to continue supporting the Indigenous tourism industry through ITAC.
  • This investment will enable ITAC to continue growing the Indigenous tourism industry and to develop and implement its own source revenue model.

22. New Fiscal Relationship (NFR)

Key Messages

  • Indigenous Services Canada continues co-development of a new fiscal relationship with First Nations as part of the Government of Canada's commitments to economic reconciliation and implementation of the United Nations Declaration on the Rights of Indigenous Peoples Act.
  • The Assembly of First Nations and Indigenous Services Canada continue to work together through new fiscal relationship technical tables focused on the Grant, modernization of the programs that support governance capacity and default prevention, and policy development which includes ongoing exploration with partners on a First Nations-led auditor general function, mutual accountability, and potential repeal of the First Nations Financial Transparency Act.
  • Indigenous Services Canada recognizes the importance of a fiscal relationship with First Nations that addresses sufficiency, predictability and flexibility of funding. The New Fiscal Relationship Grant strengthens the relationship with First Nations by providing flexibility to design services based on community priorities, with predictable funding agreements of up to ten years.
  • Budget 2021 introduced funding escalation to the New Fiscal Relationship Grant. It provides assurances of predictable funding growth for the duration of a Grant funding agreement, including adjustments for inflation, population growth, and a guaranteed minimum annual increase of 2%.
  • In October 2024, the expansion of eligibility in the New Fiscal Relationship Grant to Tribal Councils and First Nations-led service delivery entities, such as health authorities, was announced.

Background

  • The New Fiscal Relationship Grant is an optional funding mechanism available since 2019-20, which offers greater flexibility, predictability and sufficiency for First Nations encompassing a suite of 28 programs and services funded by ISC including: K-12 and post-secondary education, income assistance, assisted living, lands management, economic development, primary health care, community health infrastructure operations and maintenance, housing and minor capital, infrastructure operations and maintenance, and governance.
  • $1.55B in funding has been provided to First Nations via the New Fiscal Relationship Grant mechanism in 2024-25. Over $6B in funding has flowed to First Nations via the New Fiscal Relationship Grant since its inception in 2019-20.
  • Eligibility criteria for the New Fiscal Relationship Grant were co-developed with the Assembly of First Nations and the First Nations Financial Management Board, based on the Financial Management Board's certifications for financial administration laws and financial performance.
  • To help First Nations "keep up" with increasing costs associated with inflation and population growth, Budget 2021 allocated $2.7 billion over 10 years, starting in 2021-22 and $751 million ongoing, to implement funding escalation for First Nations with New Fiscal Relationship Grant agreements.
  • The New Fiscal Relationship Grant funding escalator begins in the second year of a Grant agreement. It is based on a three-year moving average of inflation as determined by the Statistics Canada's Final Domestic Demand Implicit Price Index (FDDIPI) and the Indigenous Services Canada's Indian Registry of on-reserve and Crown land populations.
  • Budget 2024 announced $12.6 million, over two years, starting in 2024-25, "to continue implementing and advancing the New Fiscal Relationship with First Nations communities." This funding would allow ISC ($2.6 million over two years) to continue co-developing the new fiscal relationship, as well as support Grant operations, and provide funding to the First Nations Financial Management Board ($10 million over two years) to support the Grant through initial and ongoing eligibility assessments, enhance the financial management capacity of 32 First Nations at risk of default, and provide remote financial management systems services, such as bookkeeping, payroll, accounts receivable and other administrative services, to up to 40 First Nations.

Current Status of New Fiscal Relationship Grant

  • Since 2019, 356 of 578 potential Grant First Nations (62%) have formally expressed interest in the NFR Grant at least once. Indigenous Services Canada works collaboratively with First Nations that wish to qualify for the Grant.
  • As of 2024-25, 160 First Nations have funding agreements which include the New Fiscal Relationship Grant.
  • The long-term vision for the Grant is accelerated improvements in socio-economic outcomes driven by self-determination in service delivery. Indigenous Services Canada will measure these improvements using the Community Well-being Index (CWB), which is derived from census data on education, labour force activity, income and housing.
  • Based on data from the 2021 Census, the average CWB score for First Nations in the Grant was 66.3; whereas the average score for non-Grant First Nations was 61.9, and the score for non-Indigenous communities was 78.7. Indigenous Services Canada will monitor changes to this baseline data to assess whether the Grant is assisting First Nations in closing socio-economic gaps.

Program-Level Data

New Fiscal Relationship Grant Funding Escalation
  2021-22 2022-23 2023-24 2024-25
Number of eligible First Nations 111 117 130 142
Average Escalator Rate 2.8% 3.4% 4.5% 5.1%
Annual NFR Grant Escalator $13.5m $18.7m $30.0m $39.6m
Cumulative Grant Escalator $13.5m $32.2m $62.3m $101.6m
New Fiscal Relationship Grant Expressions of Interest and Agreements
  2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 Cumulative
TotalTable note ***
Expressions of Interest 250 + 104 10 38 34 51 98Table note * 356
Met Eligibility Criteria 104 41 7 20 17 20 Table note * 182
Accepted Grant Offer 85 27 6 13 13 18 Table note * 162Table note **
Total Recipients with Grant Agreements 85Table note ** 111 117 130 143Table note ** 160 Table note * 160Table note **
Total NFR Grant Funding at Year End $636m $786.2m $919.3m $1.1B $1.36B $1.55BTable note * Table note * $6B+ as of 24-25
Table note 1

In progress

Return to table note * referrer

Table note 2

Chapleau Cree moved back to contribution after 2019-20; Whitecap moved to self-government in 2023-24

Return to table note ** referrer

Table note 3

The cumulative total is not a sum of each year, as some First Nations may express interest or met eligibility in multiple years.

Return to table note *** referrer
Regional Distribution of First Nations with New Fiscal Relationship Grant Agreements (2024-25)
Region BC AB SK MB ON QC ATL TOTAL
Number of Grant Recipients 79 4 17 11 23 11 15 160

F. Infrastructure

23. Housing On-Reserve

Key Messages

  • In response to long-standing housing gaps in First Nations communities, since 2016 the Government of Canada has committed over $4 billion, through Indigenous Services Canada (ISC), for on-reserve housing.
  • This includes a new commitment of $426 million through Budget 2024 to support closing the housing gap in First Nations.
  • Since 2016 and as of June 30, 2024, in partnership with the Canada Mortgage and Housing Corporation, Indigenous Services Canada is supporting the construction, renovation and retrofit of 36,545 homes on reserve, of which 23,622 are complete.
  • ISC is supporting the Yänonhchia' initiative, which builds upon a successful pilot project in Quebec region to increase First Nations access to private financing and support private homeownership on-reserve.
  • The Government of Canada will continue to work diligently with partners to ensure that First Nations people across the country have access to safe and adequate housing.

Background

  • First Nations led the co-development of a National First Nations Housing and Related Infrastructure Strategy, endorsed by the Assembly of First Nations Special Chiefs Assembly on December 5, 2018.
  • The Assembly of First Nations, Indigenous Services Canada and the Canada Mortgage and Housing Corporation meet regularly to advance the national strategy and plan for its implementation. Infrastructure Canada also attends these meetings.
  • This collaboration ensures that housing reforms target a long-term approach to support the transition to First Nations care, control and management of housing, in a way that respects regional differences and First Nations' readiness.
  • The scale of need, however, for First Nations housing is tremendous. In 2021, the Assembly of First Nations released a report on the cost analysis of current housing gaps and future housing needs in First Nations. It projected the on-reserve infrastructure gap for housing to be about $44 billion.
  • In April 2024, the Assembly of First Nations released its Closing the Infrastructure Gap by 2030 report, which estimates that the total cost for closing the infrastructure gap by 2030 to be more than $349 billion, with $135 billion of that amount required to close the housing gap alone.
  • A recent report from the Conference Board of Canada and the Assembly of First Nations further notes that closing the infrastructure gap in First Nations could contribute over $600 billion in economic output to Canada's economy.
  • Government of Canada has committed $4.14 billion, through 2026-2027, to support closing the housing gap for First Nations on-reserve. Of this, ISC has disbursed over $2.43 billion to First Nations to support their housing needs and priorities.
  • Since 2017, the Government of Canada has provided $163.3 million (until 2025–2026) to support engagements and institution building related to transferring housing and infrastructure services.
  • In 2023, this funding supported the establishment of an historic Framework Agreement between the Government of Canada and the Confederacy of Mainland Mi'kmaq on the transfer of delivery of housing and infrastructure services.
  • Indigenous Services Canada will also continue to support First Nations housing capacity enhancement efforts through the Housing Managers Subsidy which supports First Nations to recruit and retain skilled housing professionals. Additional funding beginning in 2024-2025 is supporting training/certification and technical services for First Nations housing professionals.
  • The Department is also working with First Nations and organizations to determine financial innovation tools and resources to increase homeownership on-reserve.
  • ISC is supporting the Yänonhchia' initiative, which builds upon a successful pilot project in Quebec region to increase First Nations access to private financing and support private homeownership on-reserve.
  • The Auditor General of Canada tabled its audit on housing in First Nations communities in March 2024, which covered housing on reserves for the period from April 2018 to March 31, 2023 and involved both Indigenous Services Canada (ISC) and Canada Mortgage and Housing Corporation (CMHC).
  • The Government of Canada welcomed the recommendations set out in the audit and the opportunity to highlight the housing challenges faced by First Nations communities. Indigenous Services Canada has finalized the detailed action plan to address the audit's recommendations.
  • Indigenous Services Canada is currently sharing the final version of the detailed action plan with partners, and will be working to involve partners in advancing the action items to respond to the Auditor General's recommendations.

Current Status

  • Budget 2021 and 2022 investments will continue to support First Nations to increase the number of available homes and address critical housing needs.
  • Budget 2022 provided an additional $157 million over 5 years beginning in 2022 to enhance housing management capacity on reserve through a Housing Management Subsidy, with a further $66 million over 3 years to begin flowing in 2024 for training and certification, and the provision of technical services.
  • $2 billion in housing funding, over 5 years, has been committed in the Agreement-in-Principle on Long-Term Reform of the First Nations Child and Family Services Program and Jordan's Principle. This funding began flowing to First Nations in 2023/2024 and will support First Nations with the purchase, construction, and/or renovation of housing units to meet the needs of children and families.
  • Budget 2024 proposed an additional $918 million to help narrow the housing and infrastructure gap for Indigenous communities, with $426 million of that amount committed to support First Nations on reserve.

Program/Investment: Infrastructure and the Environment

Departmental Result: Indigenous communities have sustainable land management and infrastructure

Funding/Performance/Indicator Data

Program Inventory:

  • Community Infrastructure
  • Communities and The Environment
  • Emergency Management Assistance
Supporting Government Commitments
  • Truth and Reconciliation Calls to Action 21, 74, 75
  • Murdered and Missing Indigenous Women and Girls Calls for Justice 4.1, 4.6, 4.7, 16.5, 16.7
  • United Nations Declaration for Indigenous Peoples Articles 3, 4, 6, 7, 9, 11, 13, 12, 18, 19, 21, 23, 25, 26, 27
  • United Nations 2030 Agenda and Sustainable Development Goals 6, 8, 9, 11, 13, 23

Indicators:

  • Percentage of First Nation households living in a dwelling that contains more than one person per room
  • Percentage of First Nations housing that is adequate as assessed and reported by First Nations

24. Auditor General's Report: On-Reserve Housing in First Nations Communities

Key Messages

  • Indigenous Services Canada (ISC) welcomes the recommendations from the Office of the Auditor General's report and the opportunity to highlight the housing challenges in First Nations communities.
  • The work underway at ISC and the Canada Mortgage and Housing Corporation (CMHC), in partnership with First Nations, closely aligns with the recommendations outlined in the report.
  • ISC will continue to work with First Nations partners to co-develop and implement community-led housing strategies in response to their needs and the recommendations of the Auditor General.

Background

  • The audit focuses on housing in First Nations communities on reserves for the 5-year period starting April 1, 2018 and ending March 31, 2023 and examines whether ISC and CMHC supported First Nations to close the housing gap by improving housing conditions and increasing First Nations' capacity to manage housing.
  • The audit report, tabled in the House of Commons on March 19, 2024, includes both ISC and CMHC and includes the following key findings:
    • high risk of not closing the housing gap by 2030;
    • unaddressed long-standing mould issues and limited assurance on whether all federally funded housing met building code standards;
    • inequitable funding for communities with the poorest housing conditions and no comprehensive picture of First Nations' capacity needs for managing housing;
    • complex application process to access various housing programs offered between departments; and
    • lack of overarching policy framework to guide transfer of housing to First Nations.
  • The audit recommends that ISC and CMHC, in collaboration with First Nations, should:
    • develop and implement a strategy to close the housing gap by 2030;
    • better understand the extent of mould in housing and support First Nations to reduce mould;
    • obtain assurance that federally funded housing meets building codes and support First Nations to address deficiencies;
    • use the most recent census data in funding formulas to reflect demographics;
    • work with First Nations with the poorest housing conditions so they receive the support they need and prioritize capacity funding to communities that need it the most;
    • review the structure/delivery of programs to streamline and facilitate access to funding; and
    • finalize policy framework for the transfer of department responsibilities to First Nations.
  • In response to the recommendations, ISC and CMHC will:
    • continue to seek and advocate for resources to close the First Nations housing gap.
    • advance the co-developed First Nations Housing and Related Infrastructure Strategy including the pillar dedicated to Funding and Finance.
    • support First Nations' access to information and resources to address mould, building code compliance issues, and identified construction issues.
    • identify and support First Nations most in need of housing and prioritize capacity management funding.
    • continue to use recent census data and other population health factors in funding frameworks.
    • establish joint governance and oversight mechanisms to support First Nations in the management of their housing affairs.
    • ISC will continue efforts to finalize a policy framework for the transfer of housing services.
    • CMHC will increase awareness and revise programs, and both ISC and CMHC will ask for building code compliance confirmation for renovation work.

Current Status

  • Indigenous Services Canada is currently sharing the final version of the detailed action plan with partners, and will be working to involve partners in advancing the action items to respond to the Auditor General's recommendations.

25. Closing the Infrastructure Gap

Key Messages

  • The Government of Canada has committed to closing the infrastructure gap in First Nations, Inuit and Métis communities by 2030. Since 2016, the Government of Canada has committed more than $28 billion to support these efforts.
  • As mandated through the 2020 Fall Economic Statement, Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada worked collaboratively with Indigenous communities and representative organizations to better understand their infrastructure needs.
  • Indigenous Services Canada engaged with First Nations to identify their infrastructure needs. As of November 2023, 405 of the 564 First Nations submitted infrastructure needs lists, reflecting a response rate of 72%. The priority infrastructure needs identified by First Nations were community buildings, housing, transportation infrastructure, water, wastewater and utilities, and emergency services.
  • A recent report from the Conference Board of Canada and the Assembly of First Nations noted that closing the infrastructure gap in First Nations could contribute over $600 billion in economic output to Canada's economy.
  • From spring 2023 to fall 2024, ISC further engaged with First Nations on ways to improve how infrastructure programs are delivered, including new, more flexible financial tools to support the operations, maintenance, repair and replacement of existing infrastructure and further collaboration between federal departments to streamline federal infrastructure investments in First Nations communities.

Background

  • ISC engaged individual First Nations in spring 2022 to understand infrastructure needs and order of paramountcy. This exercise saw a response rate of 72% (405/564) and estimated the cost of closing the on-reserve First Nations infrastructure gap by 2030 to be $120 billion at the time.
  • ISC also worked with the Assembly of First Nations (AFN), which estimates that $349.2 billion is needed to close the First Nations infrastructure gap by 2030. The report factored in additional costs, such as the transition to a net-zero carbon economy and accessibility of on-reserve infrastructure. It also called for moving away from project-based investment approaches, guaranteeing reliable funding as well as the co development of a self-governed First Nation Infrastructure Bank, amongst others
  • A recent report from the Conference Board of Canada and the Assembly of First Nations outlined the potential economic benefits of closing the infrastructure gap in First Nations. The report noted that:
    • closing the $349.2 billion First Nations infrastructure gap over seven years could generate $635.3 billion in economic output, including $308.9 billion in gross domestic product, potentially elevating Canada as a G7 leader in gross domestic product per capita growth; and
    • investments could support 338,300 full-time jobs annually, with $202.7 billion in labour income, including $18.2 billion directly benefiting First Nation individuals.
  • ISC also worked with Inuit Tapiriit Kanatami (ITK) which engaged the four Inuit regional Land Claims Organizations and submitted a report outlining priority infrastructure projects in Inuit Nunangat. Inuit Tapiriit Kanatami estimated that $55.3 billion over 10 years and $793.7 million annually would be required to support priority projects to narrow the infrastructure gap in Inuit Nunangat.
  • CIRNAC conducted engagement with the Métis National Council and Manitoba Métis Federation, which identified infrastructure needs in their pre-Budget submissions. The Métis National Council identified immediate infrastructure investment needs of $2.41 billion over 6 years while the Manitoba Métis Federation identified immediate investment needs of $299.2 million over 10 years.

Current Status

  • From spring 2023 to fall 2024, ISC further engaged with First Nations on ways to improve how infrastructure programs are delivered.
    • Indigenous leaders highlighted the need for additional tools and options to support infrastructure decision-making in their communities.
    • New financial tools and funding mechanisms are seen as essential to meeting infrastructure needs while promoting self-determination and economic reconciliation.
  • Work is also underway with other federal government departments to explore more streamlined investments in First Nations infrastructure to better support infrastructure needs of First Nations communities.
  • ISC remains committed to working and engaging with First Nation partners - including rights-holders and First Nation organizations- to improve how the Government of Canada funds First Nations infrastructure in support of closing the infrastructure gap.

Program/Investment: Infrastructure and the Environment

Departmental Result: Indigenous communities have sustainable land management and infrastructure

Funding/Performance/Indicator Data

Program Inventory:

  • Community Infrastructure
  • Communities and The Environment
  • Emergency Management Assistance
Supporting Government Commitments
  • Truth and Reconciliation Calls to Action 21, 74, 75
  • Murdered and Missing Indigenous Women and Girls Calls for Justice 4.1, 4.6, 4.7, 16.5, 16.7
  • United Nations Declaration for Indigenous Peoples Articles 3, 4, 6, 7, 9, 11, 13, 12, 18, 19, 21, 23, 25, 26, 27
  • United Nations 2030 Agenda and Sustainable Development Goals 6, 8, 9, 11, 13, 23

Indicators:

  • Percentage of on-reserve public water systems financially supported by Indigenous Services Canada that have low risk ratings
  • Percentage of on-reserve public wastewater systems financially supported by Indigenous Services Canada that have low risk ratings
  • Percentage of First Nation households living in a dwelling that contains more than one person per room
  • Percentage of First Nations housing that is adequate as assessed and reported by First Nations
  • Percentage of on-reserve Indigenous Services Canada-funded other community infrastructure assets with a condition rating of "good" or "new"
  • Percentage of on-reserve education facilities with a condition rating of "good" or "new"
  • Percentage of on-reserve health facilities with a condition rating of "good" or "new"
  • Percentage of First Nations communities with adequate solid waste management systems
  • Percentage of high-risk contaminated sites on-reserve where remediation activities are being undertaken

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