Federal government boosts scrutiny of businesses claiming to be Indigenous-owned

Gull-Masty stopped short of accepting the committee’s recommendation to put in place new eligibility and verification requirements for companies to be listed as Indigenous.

Indigenous Services Canada is promising stricter enforcement against businesses falsely claiming to be Indigenous-owned in order to gain preferential access to billions worth of federal government contracts, according to a document reviewed by Global News.

In a letter sent late last month to the House of Commons’ Indigenous and Northern Affairs committee, Mandy Gull-Masty, the minister responsible for the Procurement Strategy for Indigenous Business (PSIB), said the department has moved to strengthen its verification process to ensure a business is Indigenous-owned before being listed on the government’s Indigenous Business Directory (IBD).

The government is also warning it will impose consequences for any company falsely claiming Indigeneity, including removal from the directory, barring them from future federal work or referring the matter to police.

Gull-Masty said the department has boosted training and “strengthened verification guidelines for staff,” as well as conducted a “comprehensive review” of listings in the IBD that resulted in 1,881 companies being delisted.

“Further, all (IBD) applicants are now required to answer a detailed questionnaire regarding the business’ ownership and control to help standardize and expedite assessments,” the letter read.

“This approach ensures businesses understand the assessment criteria, which has helped improve both accuracy and efficiency of the business registration and revalidation processes.”

But Gull-Masty stopped short of accepting the committee’s recommendation to immediately put in place new eligibility and verification requirements for companies to be listed as First Nations, Inuit or Métis owned.

Government departments turn to the IBD to find Indigenous businesses as part of a policy that five per cent of all government contracts go to companies owned and operated by First Nations, Métis or Inuit peoples. In 2023-24, $1.24 billion in government work was awarded under the policy.