The Business of Pretendians - Parliamentary Briefer

Assuming there’s still a Government of Canada by the time this post hits your mailboxes, we’ll take a look at how things (didn’t always) work in more normal times.

Who knew that market forces could have an impact on the implementation of government policies? It’s almost like all those dreamy theoretical ideas have to pass some kind of reality test!

Case in point: the Procurement Strategy for Aboriginal Business (PSAB). The strategy was originally introduced in 1996 to encourage federal government agencies to purchase goods and services from Indigenous businesses. In 2019, seeing that the initiative was being largely ignored, the Trudeau government committed to ensuring that at least 5% of all federal contracts were awarded to Indigenous businesses.

Well their hearts were certainly in the right place. But the execution…

There’s no escaping the fact that artificially reducing the available supply of a commodity (eligible businesses in this case), will create desperate buyers. And some of those desperate buyers are going to look for solutions in all the wrong places.

Especially in light of recent news concerning former Liberal cabinet minister Randy Boissonnault, it’ll be interesting to follow discussions within the Government Operations and Estimates Committee (OGGO) between November 7 and November 28.

Unlike the regular posts - each and every one of which is lovingly hand-crafted - our Parliamentary Briefers contain summaries and analysis courtesy of my generative AI research assistants. I’m just here to guide the conversation. And as with all AI content, don’t assume everything you read is completely accurate.

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Key Themes:

1. Indigenous Procurement:

   • The federal 5% Indigenous procurement mandate is seen as a meaningful step toward reconciliation but faces barriers like verification challenges and lack of enforcement.

   • Issues of "pretendians" (fraudulent claims of Indigenous identity) and exploitative business partnerships were raised as significant concerns.

   • Recommendations included better auditing and recognition of Indigenous-led business directories, such as the Manitoba Métis Federation's Red River Métis Business Directory.

2. Economic and Social Outcomes:

   • Indigenous economic indicators are concerning, with stagnant or worsening outcomes in employment and life expectancy.

   • Lack of Indigenous representation on corporate boards and in executive roles is highlighted as a structural issue.

3. Policy Enforcement:

   • Witnesses criticized the lack of enforcement of Indigenous procurement policies. Specific mechanisms, such as audits and penalties for non-compliance, were proposed.

4. Self-Identification Issues:

   • Concerns were raised about the ease of self-identifying as Indigenous in federal systems, leading to potential abuse in procurement and employment contexts.

Decisions or Agreements:

• The committee acknowledged the need to strengthen the integrity and enforcement of Indigenous procurement policies.

• Witnesses emphasized that solutions exist in prior studies, such as the Truth and Reconciliation Commission's recommendations, without the need for further research.

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Contentious or Surprising Statements

1. Indigenous Procurement Frauds:

   • Some businesses exploit the system by creating partnerships with Indigenous individuals or organizations solely to qualify for bids while retaining control and profits.

   • The term "pretendians" was used to highlight fraudulent claims of Indigenous identity.

2. Systemic Barriers and Historical Policies:

   • The systemic exclusion of Indigenous peoples from the economy, including restrictions like the Pass and Permit policy (repealed only in 2014), continues to reverberate in modern policies and practices.

3. Underperformance in Socio-Economic Indicators:

   • Witnesses pointed out alarming statistics: a six-year drop in life expectancy for Indigenous people in British Columbia and unemployment rates on reserves remaining at double the national average.

4. Self-Identification Loopholes:

   • Concerns about the lack of checks on self-identification in government systems were flagged as a root cause of systemic abuse, with examples cited.

5. Non-Recognition of Regional Business Registries:

   • Frustration was expressed about the federal government not recognizing established Indigenous business registries, such as the Manitoba Métis Federation's directory, as valid for procurement purposes.

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The Audit: Could you highlight the areas of greatest debate and identify all the sides expressed within those arguments?

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Areas of Greatest Debate in the OGGO Discussions

1. Indigenous Procurement Policies:

   • Debate: Effectiveness and enforcement of the federal government’s 5% Indigenous procurement mandate.

   • Sides Expressed:

     • Pro-Policy Side: The policy is a positive step toward reconciliation and economic empowerment of Indigenous communities.

     • Critique Side: The policy has significant implementation gaps, with issues like fraudulent practices, lack of auditing, and exclusion of grassroots Indigenous entrepreneurs.

     • Proposed Solution: Better enforcement, active audits, recognition of regional business registries like the Manitoba Métis Federation, and stricter eligibility criteria.

2. Self-Identification and "Pretendians":

   • Debate: Abuse of self-identification frameworks by individuals and businesses.

   • Sides Expressed:

     • Concerned Side: Self-identification loopholes lead to fraudulent claims of Indigenous identity and unfair benefits in procurement and employment.

     • Counterpoint: While some abuses exist, the main issue lies in systemic inefficiencies and lack of enforcement rather than widespread identity fraud.

     • Proposed Solution: Tightening self-identification policies and implementing robust verification mechanisms.

3. Indigenous Representation in Corporations:

   • Debate: Limited Indigenous representation in publicly traded companies and leadership roles.

   • Sides Expressed:

     • Critique Side: The absence of Indigenous voices in corporate leadership is a structural barrier to economic equity.

     • Contextual Side: This issue is a symptom of broader systemic racism and historical exclusion, which requires long-term structural reforms.

     • Proposed Solution: Quotas, targeted programs for board representation, and incentives for corporations to engage with Indigenous talent pools.

4. Recognition of Regional Business Directories:

   • Debate: Lack of federal recognition of regional Indigenous business directories.

   • Sides Expressed:

     • Critique Side: Non-recognition marginalizes legitimate Indigenous businesses already validated by regional governments, such as the Manitoba Métis Federation.

     • Federal Policy Side: The need for a centralized, uniform directory for consistency in procurement.

     • Proposed Solution: Recognizing multiple validated sources of Indigenous business directories and harmonizing standards.

5. Enforcement Mechanisms in Indigenous Procurement:

   • Debate: Absence of active audits and enforcement for promises made in Indigenous procurement contracts.

   • Sides Expressed:

     • Critique Side: Without enforcement, policies remain ineffective, allowing abuse and non-compliance to flourish.

     • Supportive Side: Some departments, such as National Defence, have demonstrated success in enforcing procurement commitments.

     • Proposed Solution: Mandating regular audits, imposing penalties for non-compliance, and creating oversight bodies.

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Highlights of Controversial or Surprising Statements