In an effort to create more opportunities for Indigenous companies, the federal government has announced it will require all departments and agencies to allocate at least five per cent of their procurement contracts to First Nations, Inuit and Métis businesses.
Announced on Aug. 6, the new mandate will take effect immediately for those companies that are ready to begin the work, with full implementation by 2024.
The government estimated the initiative could result in roughly $1 billion worth of government contracts being awarded to Indigenous businesses annually.
“To be clear, five per cent is the floor – not the ceiling – when it comes to ensuring that Indigenous-led and owned businesses are full partners in government contracting,” said Anita Anand, minister of public services and procurement, during a news conference.
In support of this goal, Anand said, Indigenous Services Canada (ISC) will invest $35.2 million over five years to modernize the government’s Procurement Strategy for Aboriginal Business (PSAB).
That will include expanding the geographical areas where federal organizations must first consider procuring with Indigenous businesses and broadening the definition of ‘Indigenous business’ to enable more businesses to meet the eligibility criteria, the government said.
An expansion of procurement opportunities to be more inclusive of Indigenous companies has been a long-time goal of the Canadian Council for Aboriginal Business (CCAB), noted Tabatha Bull, the organization’s president and CEO.
“Not only do I feel pride, I feel we have accomplished something remarkable together, something that has the potential to support generations of Indigenous businesses and communities, to not only close the socioeconomic gaps, but to regenerate the wealth that has been lost and to move us towards Indigenous prosperity,” Bull said.
The initiative is a collaboration between Public Services and Procurement Canada (PSPC), Indigenous Services Canada (ISC) and the Treasury Board of Canada Secretariat (TBS), and follows three years of consultation with various stakeholders.
According to the government, in response to the COVID-19 pandemic, 38 contracts have been awarded to 30 self-identified Indigenous businesses, collectively valued at approximately $126 million.
The contracts have been for a broad range of services and equipment, including logistics and air charter services, accommodation and cleaning services, information technology, professional services, medical and laboratory supplies, masks, hand sanitizer, and thermometers.