Question Period Note: Third-Party Investigation on Contracting Practices

• The Department provides funding directly to First Nations for their approved infrastructure projects, and the First Nation is responsible for administering the funding for the project within the terms of the funding agreement.

• Neskantaga First Nation has called for an investigation in relation to contracting and construction practices on water distribution and sewer systems.

• We remain committed to working closely with them and other engaged partners as these plans are further developed.

First Nations are the owners of their water and wastewater systems and are responsible for the planning, design, procurement, construction, and operation and maintenance of on-reserve infrastructure. Indigenous Services Canada (ISC) provides funding and advice to First Nations in the planning, procurement, design, construction, operation and maintenance, and commissioning of their water and wastewater facilities. ISC’s policy on tendering is titled Tendering Policy on Federally Funded Capital Projects for First Nations on Reserve. The policy states that for capital projects with construction costs over $500,000 that are funded in whole or in part by federal government contributions, open tenders must be called and publicly advertised to allow interested contractors an opportunity to bid on the project. Within the policy, the value for money criteria is defined as the lowest valid bid price, which incorporates specified provisions for local content, committed to by the contractor/supplier in carrying out the project, and any other provisions the First Nation deems necessary for carrying out the work. This is in line with industry standards for tendering of construction projects.

With respect to Neskantaga specifically, ISC supported Chief Chris Moonias’ call for a third-party investigation into the business practices of construction, engineering and project management companies hired to end Canada's longest standing boil water advisory in a First Nation. The First Nation is conducting preparatory work on these important priorities, and ISC officials continue to engage with them as the work evolves. Approximately $25.5 million has been expended from 2001 to 2020 for Operations & Maintenance, capital, and minor capital on Neskantaga First Nation water and wastewater. This amount included an outstanding $1.9 million payment billed by Kingdom Construction Limited for work performed under their contract. The payment was not for any costs relating to damages as a result of the First Nation’s decision to terminate their contract with Kingdom Construction. On October 20, 2020, Neskantaga First Nation evacuated residents to Thunder Bay due to issues with the community’s water distribution system. A condition of repatriation was an investigation in relation to contracting and construction practices on water distribution and sewer systems for First Nations in Ontario. ISC agreed to this and other conditions, and residents were successfully repatriated to the community by December 20, 2020.

ISC received a draft Terms of Reference for the investigation from the community at the end of March 2021, which the Department has reviewed. Neskantaga First Nation has elected a new Chief (Wayne Moonias), who began his term on April 1, 2021. Departmental officials are seeking a meeting with Chief Wayne Moonias to determine if the new Chief and Council would like to proceed with this investigation.

If Pressed on ISC Influence on Selected Contractors

• First Nations are the owners of their water and wastewater systems and are responsible for the planning, design, procurement, construction, and operation and maintenance of on-reserve.

• Federally funded construction projects over $500,000 follow policies in line with industry standards, including open tendering processes and consideration of value for money.

• ISC provides funding and advice to First Nations in the planning, procurement, design, construction, and commissioning of their water and wastewater facilities.