Billions in federal contracts awarded to ‘Indigenous’ enterprises without verification

The Canadian government awarded billions of dollars in contracts earmarked for Indigenous enterprises without always requiring bidders to prove that they were First Nations, Métis, or Inuit, a Global News investigation has found.

A program that now helps Indigenous businesses land more than $1.6 billion in contract awards annually, the Procurement Strategy for Indigenous Business (PSIB), used to rely largely on an honour system, said Anispiragas Piragasanathar, a spokesman representing federal departments.

Indigenous Services Canada (ISC), which currently vets applicants, and the departments that preceded it going back to 1996, did not always demand status cards or other documents from vendors until 2022, according to Piragasanathar’s statement.

“In years past,” he explained, “businesses were required to sign an attestation” that they were Indigenous. They also faced the possibility of an audit, he said.

In 2022, ISC tightened the requirements by demanding documentation from new applicants, Piragasanathar said. He did not explain why.

The Trudeau government has directed billions of dollars to Indigenous businesses over the past two years, but never addressed the PSIB’s underlying problems, according to a collaborative investigation between Global News and researchers at First Nations University of Canada. (Learn more about how the investigation unfolded.)

The program has recently come under fire from federal MPs for negligent auditing practices that potentially allow non-Indigenous businesses to exploit the system at the expense of Indigenous enterprises — and their communities.

In the absence of consistent scrutiny, the joint investigation revealed widespread reports of non-Indigenous enterprises using questionable methods to