MPs expressed outrage over mismanagement of a federal program meant to reserve 5% of government contracts for indigenous businesses, with widespread fraud by companies falsely claiming to be indigenous. Blacklock's Reporter says the issue, highlighted by the Assembly of First Nations, has led to concerns over the integrity of the program.“The Government of Canada is committed to economic reconciliation with Indigenous peoples,” testified Joelle Paquette, acting associate assistant deputy public works minister, before the Commons government operations committee. However, Paquette admitted that the department has not met its 5% target and has not verified whether businesses claiming indigenous status actually meet the criteria.In 2024, only 3.4% of federal contracts, or $143 million, were awarded to indigenous businesses — falling short of the target. In 2023, the rate was even lower at 2.7 %. Paquette acknowledged, “The department has not met its objective.”Out of 60,000 indigenous businesses across Canada, only about 2,900 are registered with the federal Indigenous Businesses Directory. However, Paquette admitted the department cannot confirm whether the businesses in the directory are genuinely indigenous.Conservative MP Larry Brock (Brantford-Brant, Ont.) questioned the extent of the fraud. “What is the total value of misappropriated funds under the indigenous procurement system?” he asked, to which Paquette replied, “I do not have that information.”Brock’s further inquiries into whether the department had identified any shell companies or referred cases to the RCMP were met with similar uncertainty. Paquette suggested these issues fell under the purview of the Department of Indigenous Services.MPs were baffled by the lack of accountability. Conservative MP Garnett Genuis (Sherwood Park-Fort Saskatchewan, Alta.) called the testimony “bizarre,” criticizing the department for its apparent lack of oversight: “You are the procurement department. Presumably, you are supposed to have some expertise in this area.”New Democrat MP Taylor Bachrach (Skeena-Bulkley Valley, B.C.) echoed the concerns, suggesting the 5% target was little more than a “box-ticking exercise.” He emphasized that Public Works was responsible for ensuring the integrity of government procurement, yet significant problems in the Indigenous contracting program remained unaddressed.The Assembly of First Nations has long voiced concerns about fraudulent practices. Joanna Bernard, New Brunswick Regional Chief, testified in September that the system was exploited by “token Indians” who claimed Indigenous status without verification.“Anybody can walk in the door and say, ‘I’m Inuit,’ ‘I’m Métis,’ or ‘I’m First Nation,’ without any verification,” she said.Conservative MP Kelly Block (Carlton Trail-Eagle Creek, Sask.) criticized the program as “performative reconciliation,” pointing out that despite Public Works’ role in awarding Indigenous contracts, the department lacked any effective oversight of the process. Since 1994, the committee was told, identity fraud has resulted in $163 million in payments to fake indigenous contractors.
