Company related to ArriveCAN | Does Dalian still meet the criteria for indigenous businesses?

(Ottawa) Dalian Enterprises Inc., which obtained one of the largest sums for the development of ArriveCAN, is once again under the microscope of federal authorities. The Department of Indigenous Services Canada (ISC) has launched a second review into its eligibility for contracts reserved for First Nations entrepreneurs after learning that its founder, David Yeo, is no longer a director of the firm.

Mr Yeo is due to speak publicly on Tuesday for the first time since becoming the subject of controversy. He will then testify before the House of Commons Public Accounts Committee. The Press revealed last month that he had opened two companies in tax havens since 2011.

The media also learned a few days later that this veteran had become a civil servant for National Defense while his firm was doing information technology consulting work for the same ministry. He then retired as administrator of Dalian after being suspended by the Ministry of National Defense.

An audit launched by SAC in February, in the wake of the Auditor General’s report into the ArriveCAN financial fiasco, confirmed that Dalian “met the conditions required to be listed on the Indigenous Business Directory (ABR). » Mr. Yeo is a member of the Alderville First Nation in Ontario, information confirmed to The Press by the community leader.

“However, information attributed to Dalian Enterprises by recent media [sic] appear to contradict the information provided to SAC by the company during the audit carried out earlier this year,” adds ministry spokesperson Randy Legault-Rankin. The federal government is therefore carrying out a new audit of the company in order to confirm its eligibility for the REA. »

Companies listed in the directory must prove that their owners “hold majority control of the company” in addition to demonstrating that they are “members of the First Nations, Inuit or Métis” and “that they reside in Canada” to have access to the billion dollars in federal contracts reserved for them annually.

The firm is therefore suspended from the directory until further notice, but this new suspension is likely to have little effect since Dalian has already been excluded from the procurement process since losing its security clearance at the beginning of the month. Coradix Technology Consulting, with which it forms a joint venture for contracts reserved for indigenous firms, is also the subject of a suspension which excludes it from procurement mechanisms.

Dalian has won numerous federal contracts in recent years thanks to its recognized status as an indigenous company. The amount amounts to 8 million for ArriveCAN, according to the Auditor General. The company, which has only two full-time employees, has also obtained 149.5 million contracts since 2008, including more than 3 million for those awarded by National Defense, according to data taken from public accounts.

In a statement on March 8, a Dalian spokesperson, who declined to be identified, said his company had passed with flying colors a ministry audit “conducted from December 2023 to February 2024” and that it had “ confirmed that Dalian successfully met the criteria” to be included in the directory. In the same email, the firm also noted that Mr. Yeo had taken steps to avoid conflicts of interest and that he had had “no involvement in the management or operations of Dalian” since his employment at the Ministry of National Defense in September 2023 and that he had placed his shares in the company in a blind trust.

However, there is not one, but several audits underway to verify whether the joint venture formed by Dalian and Coradix meets the criteria of the Indigenous Business Procurement Strategy and they will not be completed before this summer, indicated PSPC. The ministry was not able to provide a more precise timeline given “the complex nature” of these audits.

The ministry promises to make public a summary of all audits concerning Dalian when they are completed, excluding “information deemed confidential or personal” and “commercial information of a sensitive nature.”

In 2021, the Trudeau government has set itself the objective of annually granting at least 5% of the total value of all federal public contracts to Indigenous businesses, the equivalent of the proportion of the Indigenous population in the country. This represents approximately 1 billion per year.

With Joël-Denis Bellavance and William Leclerc, The Press