A federal audit has been conducted to uncover fraudulent claims in a directory of indigenous-owned contractors. The Department of Indigenous Services confirmed in a briefing note it is “committed” to verifying businesses on the Indigenous Business Directory after complaints that some firms faked First Nations, Inuit or Métis ownership to win set-aside contracts worth billions.“To register on the Directory a business must undergo an eligibility assessment and demonstrate it is 51% indigenous owned and controlled,” said the May 23 note, per Blacklock's Reporter. “Once a business is actively registered it is then eligible to bid on opportunities that have been set aside.”It was written three days after the Algonquin Anishinabeg Nation Tribal Council filed a human rights complaint accusing the department of lax vetting. Federal departments must spend 5% of their $34 billion annual contracting budget on companies majority-owned by indigenous groups. About 2,600 contractors are listed, though managers in 2024 pledged an audit to identify fraud. Findings remain secret..“It is wrong,” Deputy Public Works Minister Arianne Reza told the Commons public accounts committee. “It is a terrible situation.”Assembly of First Nations Regional Chief Joanna Bernard warned MPs last year the system was being exploited by “token Indians” who lent their names to shell firms. “There is some work to be done,” she said. “This is huge.”Rules on identity vary: First Nations status is tied to treaty membership, while the Métis National Council since 2002 has required recognition by the Métis Nation rather than self-declaration. Bernard said some contractors bypassed those standards. “Anybody can walk in the door and say, ‘I’m Inuit,’ ‘I’m Métis’ or ‘I’m First Nation’ without any verification,” she told MPs.One company, Ottawa-based Dalian Enterprises Inc., was suspended after its owner claimed Ojibway ancestry while holding a federal job. The firm received 675 contracts over 20 years, including $16.9 million in its final year.
