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Indigenous business underrepresented in government procurement opportunities

Report outlines barriers, solutions for greater Indigenous participation and access in supply chains
Export Development Canada photo
(Export Development Canada photo)

Very few Indigenous business owners and operators are well-informed about the bidding process on government contracts.

According to the survey results released by the Canadian Council for Aboriginal Business (CCAB), that's a "critical barrier" preventing Indigenous entrepreneurs from fully participating in government supply chains.

The CCAB and the Ontario Ministry of Indigenous Affairs released the findings of its latest report, Promise and Prosperity: The 2020 Ontario Aboriginal Business Survey, on Oct. 20.

The survey was done last winter - before on the onset of the pandemic - and involved telephone surveys of 200 First Nation and Inuit businesses. Some were privately owned, others were band-owned businesses.

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When it comes to bidding on government contracts, relatively few businesses (20 per cent) felt "very well-informed" in their knowledge of the process.

Over one quarter (26 per cent) of Indigenous business owners have bid on an Ontario or federal government contract. And only one in five have ever investigated the process.

In the next two years, close to one in six responded they are very likely to bid on federal government (18 per cent) or Ontario government (16 per cent) contracts.

Among the barriers to bid that were identified, the most common - especially among band-owned businesses - is that four in ten don't think they offer relevant products or services.

Others thought either a project scope was too big, there was a lack of knowledge or experience with government contracts, they lacked capacity, or they believed the procurement process was too complex or they distrusted it.

The report mentioned there is only "modest awareness" of the Ontario Aboriginal Procurement Program.

More than one third (36 per cent) of Indigenous businesses in the province were aware of it., particulary in the service industry (39 per cent) and the natural resource/construction industries (52 per cent).

One per cent of respondents said they have been awarded a contract through this program.

A big obstacle to growth, mentioned in the report, has been attracting and retaining skilled employees, and access to reliable internet.

Another issue is access to financing. Many business operators dive into personal savings rather than go to banks or turn to government loans or funding.

Over the next five years, most of the survey respondents held optimistic expectations for the future (61 per cent) in believing they will continue to operate their business.

To help turn the tide, the report recommends government building greater awareness of Ontario procurement and funding opportunities, helping Indigenous entrepreneurs develop partnerships to increase capacity, simplifying access to financing and funding opportunities, and improving internet connections to boost e-commerce opportunities.

“Despite the unprecedented growth and success that we have seen in the Indigenous economy in recent years, the majority of Indigenous businesses continue to face significant historical and institutional barriers to business development, growth, and expansion,” said CCAB president-CEO Tabatha Bull in a news release.

“We are optimistic that our recommendations based on this research will assist in the collaboration of a shared path forward for governments, Indigenous businesses, and corporate Canada, and a prosperous Indigenous economy.”

In a statement, Indigenous Affairs Minister Greg Rickford said the provincial government intends to make "reconciliation real."

“The report’s insights around the experiences, capabilities, and challenges facing Indigenous entrepreneurs will help to inform the province’s efforts to support Indigenous businesses and create meaningful opportunities for business growth as we focus on economic recovery.”