Auditor general to probe Indigenous procurement over concerns of ‘front’ companies

Canada’s auditor general is set to probe the Ottawa’s multi-billion-dollar Indigenous procurement program after a Global News investigation revealed concerns about abuse and “front” companies accessing federal contracts.

Savanna McGregor, the grand chief of the Algonquin Anishinabeg Nation Tribal Council, told Global News Wednesday that Auditor General Karen Hogan’s office confirmed it will investigate the federal government’s Indigenous Business Directory (IBD).

Hogan’s office did not immediately return a request for comment.

The IBD is where federal departments and agencies go to find Indigenous companies to purchase products and services from, with an eye to meeting Ottawa’s policy of at least five per cent of its procurement going to First Nations, Métis and Inuit companies.

A months-long Global News investigation, in partnership with researchers at the First Nations University of Canada, revealed that Indigenous leaders and federal procurement officials had concerns about “front” or “shell” companies taking advantage of the program since the late 1990s.

McGregor said she hopes “to see the scope of how infiltrated the (IBD) is filled with pretendians,” referring to non-Indigenous people who claim Indigenous ancestry.

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“And (seeing) how complex their schemes are in being able to qualify to even be registered in that system,” McGregor said, referring to non-Indigenous businesses gaining access to billions in federal contracts each year.

The IBD is part of the Procurement Strategy for Indigenous Business, which now requires at least five per cent of all federal contracts go to First Nations, Inuit or Métis-owned and controlled companies.

It’s a substantial amount of money — roughly $1.6 billion annually — meant to help Indigenous-led business compete with more established suppliers and multinational corporations and help work towards the government’s stated goal of “economic reconciliation.”

But those established suppliers and multinational corporations don’t appear to be willing to part with that kind of money. Global News’ investigation found that companies employ different strategies to qualify for the PSIB, including “rent-a-feather” schemes where an Indigenous person fronts for a non-Indigenous company in exchange for a percentage of the contract.

The situation has long been an open secret among businesses who bid on federal contracts, and common knowledge among Indigenous business and community leaders. But after Global News’ stories ran, the Algonquin Anishinabeg Nation Tribal Council — along with the Assembly of First Nations and the Assembly of First Nations of Québec and Labrador — wrote to Hogan’s office to request an audit.

“I just really hope that (the federal government) listens to us. And we have solutions that could help rectify it all,” McGregor said in an interview.

“Just for them to listen to leadership instead of making decisions on our behalf. And to actually build something that we can trust in, and that doesn’t harm our people. I don’t want (the program) to go away at all, but it needs to be rectified … and get accountability out of it and set the course right.”

An audit is a necessary step in overhauling the program to work as intended — building Indigenous economies, says Manitoba Metis Federation president David Chartrand.

“This country is really concerned that people are stealing identity and getting away with it,” he said. (Procurement opportunities) is costing billions of dollars that could have gone to the benefit of creating so much opportunity for Indigenous people.”

McGregor said they expect the audit will take place as part of the auditor general’s 2025-26 report.

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