Canada’s auditor general is considering investigating the Indigenous Business Directory (IBD), a program meant to boost Indigenous business that has been open to abuse for decades. The database is used by government departments to find Indigenous companies for roughly $1.6 billion in federal work annually under the Procurement Strategy for Indigenous Business (PSIB). Indigenous leaders have raised concerns that non-Indigenous companies are listed in the IBD and gaining access to government contracts meant for Indigenous businesses. A recent investigation by Global News and First Nations University of Canada found loopholes and workarounds allowing non-Indigenous companies to access federal contract money meant for Indigenous businesses.
The investigation revealed that until 2022, the federal government allowed companies to self-identify as Indigenous without requiring documentation to support those claims. It also uncovered the existence of “rent-a-feather” schemes, where an Indigenous person is hired to front a non-Indigenous company’s bid on federal contracts. Natan Obed, the president of Inuit Tapiriit Kanatami, described these workarounds as a form of identity theft and the “next stage of colonization.” Prominent Indigenous groups, including the Assembly of First Nations and the Assembly of First Nations Québec and Labrador, have requested an audit of the IBD, accusing Ottawa of “negligent management” of the program.
Indigenous Services Canada (ISC), the agency responsible for maintaining the Indigenous Business Directory, initially claimed to have tightened eligibility requirements in 2022 and required businesses to provide documentation to confirm their Indigeneity. However, an incident involving the Algonquin Anishinabeg Tribal Council revealed that the council was told they could upload any document, including a picture of a bunny, to complete the application. The government accepted the bunny picture as proof of the council’s Indigenous status, leading to accusations of mockery and lack of support for Indigenous businesses. The Office of the Auditor General is currently assessing the request for an investigation and deciding whether to proceed with a probe.
While audits can take years to complete, the auditor general’s office has noted that the process is flexible, allowing them to reprioritize planned audits to address emerging issues. The potential investigation into the Indigenous Business Directory is seen as a response to concerns raised by Indigenous groups regarding the mismanagement of the program and the lack of oversight in ensuring that only Indigenous businesses benefit from government contracts. The outcome of the audit could have significant implications for Indigenous businesses and the distribution of federal contract funds meant to support Indigenous economic opportunities.
The exploitation of loopholes and workarounds in the Indigenous Business Directory has raised alarm among Indigenous leaders and organizations, who feel that the program intended to support Indigenous businesses is being undermined by non-Indigenous companies. The issue of identity theft and fraud in accessing government contracts meant for Indigenous entrepreneurs has sparked calls for greater accountability and transparency in the procurement process. The outcome of the potential audit by the auditor general could shed light on the extent of abuse and mismanagement within the Indigenous Business Directory and lead to reforms to safeguard the program’s integrity and uphold its original purpose of promoting Indigenous economic development.
