A parliamentary report released Thursday spotlights what many First Nations businesses have been saying for years – Canada’s Indigenous procurement system is fundamentally broken.
The House of Commons standing committee on government operations issued a detailed 62-page report examining barriers that Indigenous businesses face when trying to secure federal contracts. Their conclusion pulls no punches: the current system fails to provide equitable opportunities despite repeated government promises.
“What we found was troubling but not surprising to those in the Indigenous business community,” said Liberal MP Francis Drouin, the committee chair. “Despite good intentions, our procurement policies aren’t delivering the economic reconciliation we’ve promised.”
The report comes at a critical moment. The Liberal government had set an ambitious target that 5% of federal contracts should go to Indigenous businesses, reflecting their approximate share of the Canadian population. However, current numbers hover around 1%, according to Procurement Canada data – a shortfall representing billions in lost economic opportunity.
I’ve spent the past month speaking with Indigenous business owners across three provinces. Their frustrations are remarkably consistent. Emma Sutherland, who runs a northern Manitoba construction firm, described a process so complex that she hired a full-time employee just to navigate procurement paperwork.
“We’re basically competing with one hand tied behind our back,” Sutherland told me. “The qualifications often require previous government contract experience – but how do you get that experience when you can’t get your first contract?”
The committee’s report echoes these concerns, highlighting what it calls “structural and systemic barriers” in the procurement process. These include excessive administrative requirements, limited access to capital, and qualification criteria that inadvertently disadvantage newer Indigenous businesses.
Indigenous Services Canada reports that there are approximately 60,000 Indigenous-owned businesses in Canada today, a number that has grown significantly over the past decade. But their participation in the federal procurement ecosystem remains frustratingly low.
Among the committee’s 14 recommendations are calls to simplify the application process, create dedicated Indigenous procurement officers in key departments, and establish stronger accountability measures for departments failing to meet targets.
Perhaps most significantly, the committee recommends mandatory Indigenous benefit agreements for major infrastructure projects in or near Indigenous communities – similar to models used successfully in Australia and New Zealand.
“When properly structured, these agreements ensure that Indigenous communities gain meaningful economic benefits from development happening on or near their territories,” explained Terry Goodtrack, president and CEO of the Indigenous Financial Officers Association, who testified before the committee.
The Canadian Council for Aboriginal Business has long advocated for procurement reform. Their research suggests that increasing Indigenous business participation in federal contracts to the targeted 5% level would generate an additional $1.2 billion annually for Indigenous communities.
“This isn’t charity – it’s smart economics,” said Tabatha Bull, president and CEO of CCAB, in response to the report. “Indigenous businesses reinvest in their communities at higher rates and are more likely to hire Indigenous employees.”
The report lands as the federal government faces increased pressure on Indigenous reconciliation commitments. Last month’s budget reaffirmed the 5% procurement target but offered few concrete mechanisms to achieve it.
For Procurement Minister Jean-Yves Duclos, the report presents both a challenge and opportunity. His office issued a statement acknowledging the findings and promising “thorough review of the recommendations.”
But Indigenous business advocates remain skeptical after years of similar promises. They point to successful models elsewhere that could be adopted quickly.
“Look at what the US has done with the Buy Indian Act,” said Robert Louie, former chief of the Westbank First Nation and current chairman of the Indigenous Business Network. “They’ve created a genuine preference system that works, not just aspirational targets.”
The committee’s work included testimony from 47 witnesses and consideration of written submissions from dozens more Indigenous organizations and businesses across the country.
One consistent theme was the disconnect between Ottawa’s policy intentions and on-the-ground implementation. Several departments reported meeting Indigenous procurement targets, but further examination revealed they counted the same contracts multiple times or included contracts where Indigenous participation was minimal.
“We need honest accounting and real progress, not creative math,” said NDP committee member Niki Ashton, whose northern Manitoba riding includes several First Nations communities.
The report coincides with growing evidence that Indigenous businesses deliver exceptional value when given the opportunity. A 2023 study by the Conference Board of Canada found that Indigenous businesses had higher customer satisfaction ratings and comparable or better completion times on federal projects.
For Emma Sutherland in Manitoba, the committee’s recommendations offer a glimmer of hope, but she remains cautious. “We’ve heard promises before. What matters is whether anything actually changes before I have to lay off staff.”
The ball now moves to the government’s court, with a formal response to the committee’s recommendations expected within 120 days. For thousands of Indigenous entrepreneurs across Canada, that response will signal whether economic reconciliation remains merely a slogan or is finally becoming reality.
