The Canadian Council for Indigenous Business has welcomed the recent findings from the country's Procurement Ombudsman, describing the report as "a vital course correction, if actioned, to strengthen the integrity, accountability, and economic impact of federal Indigenous procurement".
On Thursday the procurement ombudsman released a new report which slammed Canada's Indigenous procurement strategy outcomes, finding that Indigenous Services Canada and other departments are failing to uphold their own Indigenous procurement strategy and may be allowing contractors to use shell companies to access contracts reserved for Indigenous businesses.
Alexander Jeglic said Indigenous Services Canada failed to provide timely answers to procurement officers' questions in some cases and allowed some contracts to go out to companies not listed in the Indigenous Business Directory.
The Coast Reporter newspaper reports the Ombudsman noted a lack of oversight on contracts to ensure 33 per cent of the value of the work is done by an Indigenous contractor.
"Non-Indigenous businesses may use Indigenous businesses as shell companies — entities that meet the minimum ownership requirement on paper but do not actually perform the work — allowing them to unfairly access contracts intended to be set aside for Indigenous businesses," the Ombudsman' report states.
"Despite the long-standing nature of the (strategy) and its role in awarding hundreds of millions of dollars of contracts annually, (Indigenous Services Canada) has omitted to clearly communicate to departments their obligation to monitor and report on the 33 per cent Indigenous content criterion."
Mr Jeglic took the rare step of publicly shaming the Department in the report's opening pages, noting the review "reveals a pattern of fragmented guidance, inconsistent application and oversight, and missed opportunities to uphold the strategy's core objective, to meaningfully support Indigenous businesses through federal procurement".
Mr Jeglic told The Canadian Press the report was the "most shocking" he has seen in his tenure, and that it should serve as a "turning point" by triggering program reform in collaboration with First Nations, Inuit and Métis partners.
He said that his office now will review progress on procurement strategy reform every six months, rather than every two years.
The Procurement Strategy for Indigenous Businesses is a 30-year-old initiative aimed at easing access to federal procurement opportunities for Indigenous businesses. A company must be at least 51 per cent Indigenous-owned in order to bid on those contracts. At least 33 per cent of the value of the work done under a set-aside procurement contact must be performed by an Indigenous entity.
As of 2022, federal departments must also ensure that five per cent of the total value of their procurement contracts is awarded to Indigenous businesses.
The Canadian Council for Indigenous Business (CCIB) said on Tuesday it has long advocated for a "fair, transparent, and accessible procurement system".
"For more than a decade, CCIB has provided extensive research and policy recommendations that align closely with many of the Ombudsman's findings for systemic improvement," the organisation said in a statement.
CCIB renewed its call for a series of reforms and backed the Ombudsman's call for the development of a comprehensive government-wide Indigenous procurement policy; the establishment of a permanent, impartial, Indigenous-led mechanism to formally challenge PSIB set-asides; and accurate reporting of the five per cent target.
"The Ombudsman's review highlights the importance of clear guidance, consistent oversight, and modernised tools across departments," the CCIB said.
"These are structural issues that can and must be addressed to ensure Indigenous procurement delivers meaningful economic outcomes."
The Indigenous business council said tools such as their organisation's own Certified Indigenous Business (CIB) program, which is inclusive of verified First Nations, Métis and Inuit businesses, and CCIB's proprietary Supply Change™ program and Indigenous Procurement Marketplace are "examples of solutions that both provide the proven, reliable and highly reputable frameworks needed to close the gaps identified by the Ombudsman".
"While we want to see a faster resolution to the systemic barriers outlined in this report, CCIB supports the federal government's path toward accountability, which, if adhered to, will help ensure that Indigenous businesses can continue supporting the Canadian economy," the Council said.
"True Indigenous procurement means Indigenous businesses are doing the work, building long-term capacity, and strengthening their communities. CCIB is dedicated to ensuring the five per cent target represents true Indigenous economic empowerment."
In February, questions in Canada's House of Commons revealed the federal government had removed nearly 1,900 companies from its official list of accredited Indigenous suppliers after complaints businesses falsely claimed Indigenous ownership to secure millions in federal contracts, including more than 600 in 2025 alone.
