When Ottawa’s beautiful announcements deflate

You have to give him that, Guillaume Carle doesn’t skimp on his look. And yet, despite his fringed jacket, his ponytail and the large bone necklace that encircles his neck, the Gatineau resident is not native for five cents. It’s all a show off, denounced from all sides for years.

That did not stop the federal government from awarding dozens of contracts to his defunct firm, Night Hawk Technologies, under the Aboriginal Business Procurement Strategy (ABPS). This same program is today at the heart of the scandal ArriveCan.

I investigated the federal contracts of Guillaume Carle, the fake Indigenous man from Gatineau, in 2019. Ottawa let it happen. He’s been giving up on this kind of nonsense for ages. We come to believe that all he is interested in, deep down, is making great announcements, not checking whether his programs work. Especially not.

It would have been necessary for the matter ArriveCan explodes in his face so that the government admits – painfully – that the SAEA is working badly, very badly. In fact, if he does not quickly correct the situation, scandals are likely to accumulate at his doorstep.

In 2021, Ottawa did what it loves to do above all else: a great announcement. The targets were ambitious: starting in 2025, all federal departments and agencies should offer at least 5% of their contracts to Indigenous businesses.

The government did not listen to First Nations representatives who pointed out the flaws in the SAEA – a program that has existed, in a more modest form, since the era of Jean Chrétien. He ignored the federal report which pointed out, as early as 2007, the absence of an adequate mechanism to verify whether the work was indeed carried out by Aboriginal people.

Justin Trudeau’s government turned a blind eye, covered its ears and rushed forward with its virtuous announcement.

As a result, the number of registrations in the Indigenous Business Directory jumped 40%, according to the Globe and Mail. The value of contracts awarded under the PSAB has quintupled, reaching $862 million in 2022-23.

This dizzying growth would not be a problem, it would even be excellent news, if the program was solid and really served to improve the socio-economic conditions of Indigenous communities in Canada.

Unfortunately, as we know too well, hell is paved with good intentions…

The case ArriveCan has shined the spotlight on a ploy that we suspect is quite widespread: tiny indigenous businesses, with two or three employees, serve as fronts to get their hands on contracts reserved for indigenous entrepreneurs.

These microenterprises play an intermediary role. They win the contracts, only to pass them on to non-Indigenous companies. In the process, they grant themselves a large commission, thanking heaven (and taxpayers) for their good fortune.

David Yeo, the entrepreneur at the heart of the scandal ArriveCan who served as an intermediary to non-native colleagues, qualified for the program as the great-grandson of a Grand Chief from the Alderville First Nation in Ontario.

Even though he has no status and grew up off-reserve, David Yeo met the criteria in Ottawa’s eyes. The program also allowed it to partner with a non-Indigenous firm.

In short, he ticked the right boxes. Very good. But… how did the awarding of this contract help the community it calls for?

The SAEA requires that a third of the work be done by indigenous employees, but the government almost never checks whether its own rules are respected. Only four audits have been carried out since 2016, according to the Globe and Mail.

In other words, Ottawa does not give itself the means to verify whether its generous program benefits the people it is supposed to help. How are these entrepreneurs giving back to their communities? Are they even really part of it?

On Friday, my colleagues Joël-Denis Bellavance and Mylène Crête revealed that another company had fallen into the breach: Advanced Chippewa Technologies Inc., with its four employees and its private residence serving as its head office in Ottawa , has won 134 million in federal contracts since 2004…

Basically, the company resells computer hardware and software to government departments on behalf of major players like Apple, IBM and Microsoft.

Again: how does this help Indigenous people across the country?

Are we not instead depriving them of opportunities by allowing a handful of entrepreneurs to pocket the millions of dollars that were intended for them?

Many are convinced of this. Last year, more than 50 Indigenous financial institutions warned Ottawa that the SAEA was encouraging the use of “shell companies” to obtain contracts, to the detriment of legitimate Indigenous businesses.

Add to this the fact that the government lets almost anyone register in its Indigenous Business Directory (for example Guillaume Carle) and thus have access to contracts intended for Inuit, Métis and First Nations of this country…

Canada’s Minister of Indigenous Services, Patty Hajdu, announced a major review of the PSAB. It’s not too soon. It is high time to plug the cracks in this benevolent strategy, certainly, but scandalously flawed.