Auditor Alleges $160M Indigenous Contract Went to Non-Indigenous Venture

Indigenous Services Minister Patty Hajdu takes part in a panel during the Assembly of First Nations Special Chiefs Assembly in Ottawa on Dec. 5, 2024. THE CANADIAN PRESS/Sean Kilpatrick

A former auditor for the government’s indigenous procurement program says that a $160 million contract meant for indigenous businesses was awarded to a joint venture that served as a front for a non-indigenous company.

Garry Hartle, a former senior compliance auditor for Indigenous Services Canada, told the parliamentary public accounts committee on Dec. 10 that Pedabun 35 Nursing Inc. and the Canadian Healthcare Agency, a nurse staffing company, were in a joint venture for a contract to deliver nursing services to remote indigenous communities. He said the joint venture was a “shell” for a non-indigenous company.

“My audit determined that the joint venture was a shell for the non-indigenous Canadian Healthcare Agency (CHCA). This business took advantage of the naivety of the owner of Pedabun 35 Nursing Inc. to win and execute a large set-aside contract,” he said.

The government’s Procurement Strategy for Indigenous Business (PSIB) was created decades ago to give government work to indigenous-owned companies. It required the joint venture to be majority-controlled by an indigenous company. The program was accelerated in 2021, with the Liberal government requiring that 5 percent of its contracts be given to indigenous businesses.

Hartle said he considered the $160 million contract fraudulent, and recommended to the government that it refer the case to the RCMP.

“I presented the evidence ... which was substantial to indicate there was fraud. And my recommendation was that [it be given to] RCMP to investigate. But they didn’t want any trouble, so they didn’t do it,” he said.

Conservative MP Garnett Genuis said that while CHCA had been taken off the government’s list of indigenous companies—the Indigenous Business Directory—it has still been receiving government contracts.

The PSIB faced backlash from some indigenous groups in 2023 after it was revealed the IT firm Dalian Enterprises was given $7.9 million in funding through the program for the ArriveCan app. Dalian, a two-man company that previously qualified as indigenous-owned, received contracts through a joint venture with Coradix, a non-indigenous company. Both have since been suspended from federal contracting.

On Dec. 9, Indigenous Services Minister Patty Hajdu told The Globe and Mail she was calling for an external review of PSIB in response to Hartle’s allegations, calling them “concerning.”

“If proper checks and balances are not in place to protect the integrity of a program like that, then it undermines confidence in that program,” she said.

The Canadian Healthcare Agency did not respond to The Epoch Times’ request for comment before press time.