A former auditor for the government’s indigenous procurement program says 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 s
enior compliance auditor for Indigenous Services Canada, told the parliamentary government operations committee on Dec. 10 that Pedabun 35 Nursing Inc. and Canadian Health Care Agency Ltd. were in a joint venture for contracts to deliver nursing care 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 Health Care 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 Businesses (PSIB) was created in 1996, then called the Procurement Strategy for Aboriginal Business, to give government work to indigenous-owned companies. It requires joint ventures to be
majority-owned and -controlled by one or more indigenous companies. The program was
accelerated in 2021, with the Liberal government requiring that at least 5 percent of federal 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 the] 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 the CHCA has been removed from 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 that IT firm Dalian Enterprises received
$7.9 million in contracts through the program for the ArriveCan app. Dalian, a two-person company that previously qualified as indigenous-owned, received contracts through a joint venture with Coradix Technology Consulting, a non-indigenous company.
Both were
suspended from federal contracting in March this year.
On Dec. 9, Indigenous Services Minister Patty Hajdu told The Globe and Mail that she was calling for an external review of the 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 Health Care Agency did not respond to an Epoch Times request for comment before press time.
