Watchdog finds little oversight over multi-billion-dollar Indigenous procurement program

Procurement watchdog’s probe says Canada can’t 'credibly demonstrate' that Indigenous businesses are benefitting from multi-billion dollar procurement program.

The federal government repeatedly ignored key safeguards meant to ensure that legitimate Indigenous businesses would benefit from a multi-billion-dollar procurement program, a watchdog’s investigation has shown.

In a report made public Thursday, the Office of the Procurement Ombud said Indigenous Services Canada showed a “systemic disregard” for the principles behind the Procurement Strategy for Indigenous Business (PSIB), repeatedly failed to verify companies awarded work were Indigenous-owned, and failed to keep track of how the decades-old program actually benefitted Indigenous businesses.

Instead, the department’s “fragmented” guidance, failure to conduct mandatory audits and failure to respond to other government agencies’ questions led the watchdog to conclude the federal government can’t “credibly” say that it is accomplishing a key target for economic reconciliation with First Nations, Métis and Inuit communities.

“I would say this is the worst we have seen in terms of a systemic review. I don’t know that I could recall another situation where the actual rule set didn’t exist in its entirety,” said Procurement Ombud Alexander Jeglic, calling the government’s handling of the program “difficult to understand.”

After years of criticism from Indigenous business leaders, internal government reviews and parliamentary hearings, the federal Liberals said they will continue to dole out contracts under the PSIB until a long-awaited “transformative” solution is revealed.

“The longer this goes unaddressed, the more risk to Indigenous communities,” said Jeglic in an interview with Global News.

“One thing I absolutely need to put on record is whatever the solution is, it cannot be worse for Indigenous suppliers … They are not the failing point of this strategy. The failing point is the (government’s) administration of the strategy.”

Jeglic’s office reviewed 27 separate procurement files from three separate departments from April 2023 to March 2025. It also examined Indigenous Services Canada’s overall administration of the program — which mandates that at least five per cent of all government procurement projects go to businesses that are at least 51 per cent owned and operated by Indigenous peoples.