What defines an Indigenous business? A guide aims to weed out fronts and frauds

Ka’nhehsí:io Deer

A coalition of Indigenous economic organizations wants the federal govern‐ ment to adopt new defini‐ tions of what constitutes Indigenous businesses and organizations into its pro‐ curement process.

"We know that there are shell companies that maybe have an Indigenous front person that's being used re‐ ally to access a lot of setasides and procurement op‐ portunities," said Dawn Madahbee Leach, chair of the National Indigenous Econom‐ ic Development Board and a member of the National In‐ digenous Procurement Work‐ ing Group.

The new Indigenous Busi‐ ness Definitions were re‐ leased by the National Abo‐ riginal Capital Corporations Association (NACCA) last week and developed by the National Indigenous Procure‐ ment Working Group, which consists of representatives of various Indigenous organiza‐ tions, government depart‐ ments, and industry associa‐ tions.

In 2021, the federal gov‐ ernment announced a gov‐ ernment-wide procurement target of five per cent for In‐ digenous businesses. The federal government's Indige‐ nous Business Directory in‐ cludes a list of Indigenous companies eligible for special consideration when bidding on some federal contracts.

The new guide provides criteria for Indigenous sole proprietorships, corpora‐ tions, non-profits, charitable organizations, co-operatives, and partnerships.

Some of the criteria are similar to what is used by the federal government, such as requiring 51 per cent owner‐ ship and control by Indige‐ nous people, while other def‐ initions are tougher, said Madahbee Leach.

She hopes the definitions will help weed out busi‐ nesses that aren't Indige‐ nous-led, false claims of Indi‐ geneity and tokenism from opportunities meant for First Nations, Métis and Inuit.

"It's going to make a dif‐ ference to ensure that those set-asides that are meant for our people go to our people," said Madahbee Leach.

"There's so much oppor‐ tunities to involve our people in Canada's economy and procurement is one of the best ways."

NACCA's criteria for proof of Indigeneity excludes mem‐ bership in some organiza‐ tions the federal governmen‐ t's Indigenous Business Di‐ rectory criteria includes.

"We've contested that di‐ rectory and we said we need to maintain it because we know how to determine Indi‐ geneity way better than, you know, a civil servant," said

Madahbee Leach.

Controls versus barriers

The Canadian Council for Aboriginal Business, which was part of the working group that developed the de‐ finitions, said it has concerns about the criteria around joint ventures and partner‐ ships, and that the defini‐ tions require further work.

The guide's criteria in‐ clude agreements that define the Indigenous partner as "having the relevant creden‐ tials in the industry and/or experience in operating a business, at least 51 per cent ownership, majority of real‐ ized economic and monetary benefits, and majority man‐ agement control."

Tabatha Bull, president and CEO of the Canadian Council for Aboriginal Busi‐ ness, said there's no set stan‐ dard on what experience means and that makes that part of the description quali‐ tative in nature and difficult to enforce through a certifi‐ cation.

"My concern is always that we're creating controls or barriers to weed out the people or the businesses that are not legitimate but in doing so we're creating addi‐ tional barriers for those that are," Bull said.

The definitions were de‐ veloped with the aim to be applied widely by both the public and private sector.

CBC News contacted In‐ digenous Services Canada for comment on March 13. The department has yet to reply but minister Patty Hajdu said last month that the federal government is reviewing its procurement policies to de‐ termine who is eligible to be a part of its Indigenous busi‐ ness directory.