Good morning. A billion-dollar federal program intended to help Indigenous businesses grow has instead become a breeding ground for shell companies, critics say, despite Ottawa being warned decades ago. More on that below, plus the G7 meetings and American products take a hit. But first:
Today’s headlines
- Canadian officials project calm after tariff meeting in Washington
- Justin Trudeau bids farewell on his last day in office, and Mark Carney begins to pull together a new cabinet
- Ontario has twice as many measles cases than it did in the entire decade between 2013 and 2023. Here’s what you need to know about the virus.
- Russian President Vladimir Putin backs ceasefire deal, but says he wants to negotiate further
David Carrière-Acco, founder and president of ACOSYS Consulting Services, poses for a portrait in his office in Montreal.Andrej Ivanov/The Globe and Mail
Investigation
The problem with Ottawa’s Indigenous procurement program
Hi there 👋 – I’m Tom Cardoso, an investigative reporter with The Globe.
Last spring, I worked on a story about ArriveCan, the federal government’s pandemic-era mobile app that became mired in controversy after my colleague Bill Curry revealed its cost had ballooned to $54-million (estimates now put the price tag at $60-million) from $80,000. As parliamentary committees dug in, two Ottawa-area technology companies on the project had come under significant scrutiny: Dalian Enterprises Inc., an Indigenous firm with two employees, and Coradix Technology Consulting Ltd., a larger, non-Indigenous operation with at least 40 staff. The two often worked with each other in a joint venture, and seemed to share an office, business functions, and leadership.
The partnership had been registered under the Procurement Strategy for Indigenous Business, a federal policy launched in 1996 to direct contracts to Indigenous businesses, helping them grow. My story last year was a profile of Dalian and Coradix, the extent to which they overlapped, and this obscure federal policy.
But, as I spoke with Indigenous business owners about the procurement strategy, a pattern began to form. In interview after interview, these entrepreneurs told me there was a much bigger problem.
The policy was could be gamed by shell companies, they said.
The PSIB was nearly 30 years old. How could this be? If Indigenous business owners were so thoroughly convinced, what had the government done about all this?
Late last summer, I began to dig into that allegation, together with Bill and another colleague, Mahima Singh. We spoke with more than 50 experts, including business owners, public servants, and others working in government contracting. We also searched for old government reports, analyzed federal spending disclosures, and began examining the companies doing work through the strategy.
As we dug in, it became clear that the government had ignored decades of internal and external warnings about the procurement strategy, particularly surrounding how it might allow for shells. And the policy’s architects told us it wasn’t meeting its objectives.
From day one, the procurement strategy had allowed for joint ventures, the idea being that those would lead to a knowledge transfer from established, non-Indigenous businesses. But this same mechanism had come to be used as an express lane for large government contractors, who would strategically partner with Indigenous companies.
We also learned that the policy had existed in relative obscurity until 2021, when the Trudeau government announced that 5 per cent of the value of government contracts should now be directed to Indigenous companies.
Carolane Gratton, a spokesperson for Indigenous Services Canada, the department which administers the policy, said joint ventures should not be assumed to be shells, and that they are reviewing the strategy both internally and externally. She added that while past evaluations have warned of the risk of shells, the department did not identify them as a widespread problem.
But experts insist the rules are too lax, and have allowed shells to flourish.
“It’s very prevalent,” David Carrière-Acco, owner of management consulting firm Acosys Consulting Services Inc., told me last fall. “You’ll always find somebody who wants to game the system.”
Carrière-Acco, a member of Peter Ballantyne Cree Nation in Saskatchewan, spoke from personal experience. Non-Indigenous firms have approached him with a proposal at least five times, he says, in which his company would have to do none of the work. In exchange, he’s been offered around 5 per cent of the contract’s billable revenue. He’s never accepted.
His business, named after the Plains Cree word for “arrow,” has operated for nearly 20 years, and has a joint venture of its own. While he owes much of his success to the PSIB, shells have significantly distorted the playing field, he says.
“If I had $400-million in contracts, could you imagine what I would do with it? And here I am, trying to rub two pennies in my pocket,” he said. “At the end of the day, when I see shell companies gaming it, and government buyers willing to buy into it – it’s right there in the open, and they don’t care – I get frustrated by that.”
Our team has spent six months unraveling the details of this complex story. Keep reading here to see our full investigation into the Procurement Strategy for Indigenous Business.
The Shot
‘Does that sound like America to you?’
Demostrators from the human rights organiztaion Jewish Voice for Peace holds a civil disobedience action inside Trump Tower in New York on March 13, 2025.TIMOTHY A. CLARY/AFP/Getty Images
Demonstrators filled the lobby of Trump Tower to denounce the immigration arrest of Mahmoud Khalil, an activist who helped lead protests against Israel’s war on Gaza at Columbia University. The 30-year-old permanent U.S. resident hasn’t been charged with breaking any laws and faces deportation.
The Wrap
What else we’re following
At home: The G7 meeting kicks off in Quebec with a focus on Ukraine, and allies showing solidarity with Canada in trade war.
Abroad: Canada is resuming its military co-operation with Ethiopia, despite genocide allegations and other crimes in the war in Tigray region.
For fun: How Nirvanna’s Matt Johnson and Jay McCarrol became the border-busting kings of a new CanCon era.
Now: The CEO of Sobeys parent Empire Company says sales of American products are “rapidly dropping” in grocery stores.
Before: In one of history’s little-known ironies, the Trump family fortune began in a Canadian brothel-hotel more than 100 years ago.