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National Observer
01-08-2025
- Business
- National Observer
Why National Defence's Indigenous procurement goal remains out of reach
The Department of National Defence is far behind its Indigenous procurement target — a result industry insiders say has little to do with a lack of Indigenous suppliers and more with systemic barriers ingrained within the procurement system itself. The department manages billions of dollars in contracts, but reported Indigenous procurement at just 2.5 per cent for the 2023-24 fiscal year, falling far short of the government's five per cent target due to complex certification requirements, lengthy security clearances and demanding bid processes, Indigenous leaders and procurement experts said. 'Indigenous businesses are ready, willing, and able to supply defence projects — which are often located on or near their territories,' said Shannin Metatawabin, CEO of National Aboriginal Capital Corporations Association (NACCA) in a press release. 'But the bidding process is still complex and unfamiliar, and those essential relationships with the sector still need to be built.' Canada's defence budget is at its highest since World War II, with over $9 billion in new spending planned for 2025-26 — putting total defence spending at over $62 billion and meeting NATO's 2 per cent of GDP target. This increase is intended to modernize the Canadian Armed Forces, boost high-tech Arctic surveillance, strengthen international alliances and fuel defence industry growth. But Mark Dokis, senior advisor at the NACCA and chair of the First Nations Procurement Authority, said these roadblocks not only drag out economic reconciliation but also weaken the reliability of Canada's supply chain when it matters most. He pointed out that National Defence sought an exemption from ammunition procurement targets, believing no local suppliers existed. But after some research, a business was identified that could supply the needed ammunition. 'It just comes down to doing basic homework and having better connections with the Indigenous communities and organizations that can advise departments about where capacity or skills exist,' Dokis said. Indigenous businesses are "ready, willing, and able to supply defence projects," but the complexity and unfamiliarity of the bidding process makes it inaccessible to many, an expert says. Philip Ducharme, vice-president of procurement and entrepreneurship at the Canadian Council for Indigenous Business said the complexity of federal procurement is a major barrier. Requests for proposals (RFPs) demand extensive documentation regardless of contract size. 'Responding to an RFP that's worth $50,000 takes as much work as responding to a $5 million contract, almost,' he said. Small Indigenous firms often lack the staff and resources to meet these requirements. Security clearance delays add to these challenges with some companies waiting months just to become eligible to bid on certain government contracts, he said. In an email to Canada's National Observer, a National Defence spokesperson stated it is trying several strategies to improve Indigenous participation: unbundling large contracts to allow smaller bids, encouraging partnerships with established defence contractors and offering training programs. 'We remain committed to engaging with Indigenous businesses,' the spokesperson said. Directory falls short Ducharme said part of the problem lies in the government's reliance on the Indigenous Business Directory. 'When they say that they can't find Indigenous businesses, it's because they're looking at that directory, and that's only a minute number of the Indigenous businesses in Canada,' Ducharme said. To be counted, companies must register in the directory — a process some find questionable, leading many Indigenous businesses to remain unlisted. Dokis said many Indigenous businesses avoid registration because the directory is managed by Indigenous Services Canada, a department often viewed as paternalistic. 'Indigenous businesses and communities are not great friends of Indigenous Services Canada,' Dokis said. He said that the directory initially relied largely on self-identification, allowing some companies to falsely claim Indigenous status, often through joint ventures that offer only nominal Indigenous involvement. In their email, the National Defence spokesperson stated that the department supports joint ventures between Indigenous and non-Indigenous companies. To qualify, a joint venture must be at least 51 per cent owned and managed by Indigenous entities, with Indigenous firms carrying out at least 33 per cent of the contract's total work value. The Algonquin Anishinabeg Nation Tribal Council has recently filed a human rights complaint, saying the directory discriminates by letting companies in without proper checks. They claim Indigenous Services Canada, which oversees eligibility, has not done enough to verify applicants, allowing firms to be listed by simply declaring themselves Indigenous, including those with weak or fake ties. After media reports, the Auditor General began an investigation, with results expected in fall 2026. 'It should be up to First Nations, Métis, and Inuit communities themselves to identify legitimate Indigenous businesses,' Dokis said. Changes needed across departments For business owners like Michael Jacobs, the underlying problem is that these efforts still treat Indigenous inclusion as an add-on. Jacobs has experience working with numerous federal departments on procurement processes in his capacity as CEO of Cambium Indigenous Professional Services, a consulting firm on Curve Lake First Nation. He said many federal contracts are bundled into large projects, which makes it impossible for Indigenous businesses to bid — even if they could deliver specific components better than anyone else. 'Sometimes a $5 million environmental assessment contract includes 1,000 hours of engagement work. We can do that engagement work better than anyone, but can't take on the whole contract because our team isn't big enough,' he said. In a press release, Kyra Wilson, grand chief of the Assembly of Manitoba Chiefs said the government's failure to meet procurement targets across departments reflects a lack of political will, not Indigenous capacity. 'Failing to meet its own procurement target undermines any credibility the federal government claims on its Nation Building agenda,' Wilson said. She called for binding legislation to enshrine Indigenous procurement targets into law and guaranteed set-aside contracts for First Nations-owned businesses, especially in Manitoba, where Bill C-5 is expected to drive major infrastructure and energy projects. 'If the federal government can't even meet a 5% procurement target — a very low bar — it exposes how little has changed beneath the rhetoric of reconciliation,' Wilson said. Dokis said Indigenous businesses often feel excluded from early project planning and experience last-minute changes that complicate bidding. 'They're not engaging early enough with the Indigenous communities or organizations that can help them out with regards to these major projects. We only become informed of these things when a plan is already almost done and ready to be implemented,' Dokis said. Lasting progress will require Indigenous-led certification processes, culturally relevant training, simpler and scalable procurement requirements and genuine government partnerships that include Indigenous businesses from the start, he said. Bonding and insurance remain major barriers for Indigenous businesses trying to win federal contracts and the programs designed to guarantee contract completion are often out of reach. Under the Indian Act, particularly section 89, many Indigenous-owned businesses cannot use their assets as collateral, which commercial bond providers typically require. This makes it hard to qualify for bonding, even on small contracts. 'Sometimes bonding is asked for when bonding is not required,' Dokis said. Dokis said federal departments often request bonds by default, instead of basing requirements on the size or risk of the contract. For smaller contracts, he said, "the request for bonds can be a cost that is not necessary" and only makes it harder for Indigenous companies to bid. Slow government payments also cause cash flow problems for Indigenous businesses, leaving some unable to pay staff or suppliers while they wait for reimbursement. Ducharme said improved public reporting and better access to procurement data are positive steps that help track contract awards. 'Now we can analyze who's getting contracts and where improvements are needed.' Data for 2024-25 is currently under review and analysis. Given the large volume of data, approximately 140,000 contracts, National Defence said they are currently unable to provide a projected result. Indigenous industry experts and business owners see the five per cent Indigenous procurement target as only a starting point. 'It's a floor, not a ceiling. If we can get that up to 13 or 15 per cent, then it changes the reliance on federal government funding. We'll have our own money, our own jobs, our own economies. But as long as these barriers exist, I'm never going to be able to make that jump,' Jacobs said.
Cision Canada
27-05-2025
- Business
- Cision Canada
Inaugural Board Announces Creation of the First Nations Procurement Authority
OTTAWA, ON, May 27, 2025 /CNW/ - A coalition of five national First Nations economic institutions has created a national not-for-profit organization to support First Nations businesses' access and success in securing government and corporate procurement opportunities. The First Nations Procurement Authority (FNPA), established on May 1, 2025, will provide targeted outreach, training, and support to verified First Nations businesses interested in pursuing these opportunities. "An institution like this is urgently needed in Canada," says Mark Dokis, Chair of the First Nation Procurement Authority. "For too long, outdated vendor lists, lacking connections, and cumbersome processes have prevented government and corporate buyers from connecting with authentic First Nations businesses. Our goal is to reverse that trend." First Nations businesses are the fastest growing group of entrepreneurs in Canada yet continue to face unique barriers to entry. "Many Indigenous businesses are blocked from opportunities that others take for granted," says Jody Anderson, a director of the FNPA. "Lack of experience with procurement processes, issues with bonding on reserves, and lingering stereotypes all limit their participation." Beyond this, fraudulent claims to Indigenous identity enable bad actors to exploit set-asides and quotas as authentic First Nation businesses navigate unfamiliar systems without dedicated supports. "We're calling for transformative change," Assembly of First Nations National Chief Cindy Woodhouse Nepinak said at the Indigenous Prosperity Forum in May. "A dedicated agency, led by First Nations, to certify and support genuine First Nation entrepreneurs." The FNPA received its mandate from the Assembly of First Nations in 2023. Its board includes one member from each of five respected Indigenous economic organizations: the National Aboriginal Capital Corporations Association (NACCA), AFOA Canada, the Council for the Advancement of Native Development Officers (CANDO), First Nations Finance Authority (FNFA), and First Nations Financial Management Board. A representative of the Assembly of First Nations will attend board meetings as an observer. Modelled after successful Indigenous procurement institutions in Australia, New Zealand, and the United States, the FNPA will be national in scope and regional in operation. First Nations businesses will have access to free registry and certification services, training, and promotion. Government and corporate members will be able to take part in training and services for a reasonable fee. The FNPA has resulted from years of thought and research. Once operational, it will promote real opportunities for First Nations businesses – and unleash their contribution to Canada's economic prosperity. Inaugural Board Alisha Carter – Secretary Jody Anderson – Director Mark Dokis – Chair Bailey Quinn – Treasurer Ray Wanuch – Director About NACCA NACCA, the National Aboriginal Capital Corporations Association, is a network of over 50 Indigenous Financial Institutions (IFIs) dedicated to stimulating economic growth for all Indigenous people in Canada. These efforts increase social and economic self-reliance and sustainability for Indigenous people and communities nationwide.
