The Jeglic Report
What the Procurement Ombudsman Found
"This is the most shocking report I have released in my time as Procurement Ombudsman. Non-Indigenous businesses are systematically exploiting a program designed to support Indigenous economic development."
The Shell Company Scheme
Non-Indigenous businesses create or acquire Indigenous-owned shell companies to qualify for the Procurement Strategy for Indigenous Business (PSIB). The shell company wins the contract based on its Indigenous ownership status, then subcontracts the actual work back to the non-Indigenous parent company. The Indigenous business receives a fee for lending its status. The program designed to build Indigenous economic capacity instead enriches non-Indigenous companies that game the qualification criteria.
3 of 27 Not Even in the Directory
Of the 27 suppliers the Ombudsman examined, three were not listed in the Indigenous Business Directory maintained by Indigenous Services Canada. These companies received set-aside contracts despite not meeting the basic registration requirement. This suggests that the verification process for Indigenous set-aside contracts is either non-existent or deliberately bypassed.
Reform Timeline: 2028 at Earliest
Indigenous Services Canada acknowledged the findings and committed to "comprehensive reform" of the verification process — but stated the reforms would not be fully implemented until 2028. This means the exploitation will continue for at least two more years after the problem was formally documented by the Ombudsman. During this period, non-Indigenous businesses will continue to access contracts meant for Indigenous economic development.
The Procurement Failure Pattern
Indigenous set-aside fraud follows the same pattern as every procurement scandal documented on this site: ArriveCAN ($54M to a 2-person firm), Phoenix Pay ($2.2B+ in cost overruns), Indigenous procurement (shell companies exploiting set-aside programs). In each case: the oversight body documents the failure, the government promises reform, and the reform takes years. The procurement system is not broken — it functions exactly as designed: to extract public money through inadequate oversight while insulating the responsible officials from accountability.