Indigenous services minister ‘alarmed’ by allegations about construction practices on First Nations

“Clean water, broken promises” is a collaborative investigation into obstacles First Nations are encountering during the Trudeau government’s push to ensure communities are able to deliver clean drinking water to residents. You can find the full series here.

Indigenous Services Minister Marc Miller says he was alarmed by revelations of a December investigation into construction practices at on-reserve water projects and said he would like to start collecting information about the performance of contractors working on First Nations infrastructure.

“I'm keen to have as much data as possible. And if it's helpful in ensuring that the people aren't the subject of sharp practices ... I'm glad to do that,” Miller said in an interview on Jan.15.

The investigation by a consortium of journalists including Global News, APTN News and the Institute for Investigative Journalism (IIJ) exposed complaints about the construction firm originally hired to upgrade the water treatment plant meant to end Neskantaga First Nation’s historic long-term boil water advisory, now in effect for 26 years.

The investigation found allegations of excessive overcharges, deficient work, delays and racism by Kingdom Construction Limited (KCL) of Ayr, Ont., which has worked on at least seven major water and wastewater projects on First Nations. In total, these projects are valued at close to $90 million in funding from the federal government, but how much KCL earned from its work is unknown.

“I was alarmed, as everyone should be with respect to some of the perhaps sharp practices that had been taken by some contractors,” Miller said in response to the investigation’s findings. The minister did not single out any specific contractor, and his department has not provided any details on how it may begin tracking information about complaints.

KCL president Gerald Landry denies the allegations about his company’s work in First Nations communities.

“Our construction work is always performed to the very highest-quality standards. We pride ourselves in doing excellent work, and public documentation and project payment certificates can attest to this. Any suggestion otherwise is categorically false,” he said in an email.

Landry added that all construction projects can have deficiencies, which would be addressed in the scope of the work and certified by an engineer when they are satisfied. He also said delays and additional expenses can affect any project, but that this all depends on decisions by design engineers based on facts on the ground.

Regarding delays in Neskantaga, he said the situation in the community was “materially different” than what the company had expected based on the contract, leading to delays that resulted in the owner getting upset and terminating the agreement.

“Payments are rewarded accordingly, and only when work is completed,” Landry said. “We are not aware of any evidence of racism by (KCL) or its employees — we take any allegation of racism very seriously and have very strict policies and procedures in place to deal with any potential issue.”

In November, Indigenous Services Canada (ISC) agreed to calls from Neskantaga to investigate construction and engineering firms in relation to its water crisis. The department said it would pay to hire a third party.

Miller said through the initiative of Chief Chris Moonias, the government was working to “ensure that where we identify mistakes or sharp practices or shoddy work that that doesn't reproduce and cascade from community to community.”

Three months after agreeing to the calls for the investigation, the department declined to comment on when it would formally begin.

Spokesperson Leslie Michelson said by email: “The First Nation is conducting preparatory work on these important priorities, and ISC officials continue to engage with them as the work evolves.”

The minister said, however, early findings from looking into Neskantaga’s situation have been revelatory. “What I have seen, I can share with you, is alarming,” said Miller.

He also said some of the problematic practices by contractors are “occurring at times disproportionately” in Indigenous communities.

In December, the minister admitted that problems with contractors are widespread: “You see across Canada, you have contractors that don't necessarily behave well.”

Despite guidelines that suggest a preference for jobs to be given to companies with a satisfactory performance record, ISC does not have a list of companies that receive contracts for water projects in First Nations communities, nor does it keep track of issues with these firms.

Michelson said contracting for infrastructure is managed by the respective First Nations and “ISC does not require First Nations to disclose the names of the companies they select to complete water or other infrastructure projects, and does not systematically collect or track information regarding these companies.”

While the hiring decisions for infrastructure projects ultimately rest with First Nations themselves, some say the federal government could play a supporting role by collecting information to help First Nations choose reputable firms.

“Most communities go by word of mouth and recommendations,” said Jessica Vandenberghe, an engineer, community consultant and ’60s Scoop survivor from the Dene Tha’ First Nation. “It would be nice if there was a ‘Better Business Bureau,’ but unfortunately there isn't.”

Vandenberghe added that she often hears from water treatment plant operators about equipment not working properly.

In addition to helping First Nations choose the best firm for the job, some say keeping more information on problematic companies could prevent problems repeating in other communities.

“If a major infrastructure project in any community went off the rails and failed so miserably or badly as so many projects that we see in First Nation communities, there would be an inquest. There would be an investigation. Out of that, there may be a blacklist that we’re not going to work with that company again. That never happens at Indian Affairs,” said Charlie Angus, NDP MP for Timmins-James Bay, who holds a number of critic roles for the party, including ethics and Indigenous youth.

He said tracking issues is also crucial to the long-term success of these projects. “Until they’re willing to put those fundamental mechanisms — I mean this is again simple procedure, simple standards, simple oversight and accountability mechanisms — we’re going to see more failures. And we’re also going to see hundreds of millions of dollars being spent on projects that don’t end up working,” said Angus.

ISC’s tendering policy for on-reserve federally funded infrastructure projects defines “value for money” as “normally, the lowest valid bid price, which incorporates specified provisions for local content, committed to by the contractor/supplier in carrying out the project.”

According to the department’s construction contracting guidelines, “it should be the policy of the band to award a contract to the lowest acceptable bidder, provided that the contractor's tender is proper and complete and he/she appears capable of successfully completing the work.”

In a January interview with the consortium, the minister said he was not aware of the low-bid policy, but in a written response from the department, Michelson said the policy follows industry standards.

Vandenberghe agrees this follows historic practice, but argues it’s not the best practice for individual communities. “There’s always issues with the bidding system,” she said, “the lowest cost may not come from a company that has the trust of the community, nor necessarily puts the community’s needs first.”

Leadership from some First Nations said the policy leaves them no choice but to go with the lowest bidder despite preferring other companies.

“We’ve always maintained our opposition to that practice,” said Chief Moonias.

The consortium found that the government was privy to complaints about Kingdom on several of these projects as far back as 2011, yet continued to fund KCL’s work. When asked why, the minister responded that First Nations choose their own contractors.

“These are decisions that are taken with the community and we respect those decision-making processes. We do our best not to force any particular community into a particular path,” said Miller.

But critics say this argument is a dodge.

“The government's talking very much about empowering the First Nations to make these decisions themselves. Some of that is simply just old-fashioned downloading (of) the responsibility with not giving the proper cost to do it,” said Angus. “We basically contain all control, but all blame goes to the First Nation.”

“They're saying, ‘Well, it's your guys' money, it's your project.’ But they're the ones that steered us in this direction,” said Chief Glenn Hudson of Peguis First Nation in Manitoba, who said his community was forced to work with KCL as the lowest bidder.

He claims ISC threatened to pull the funding of nearly $12 million if they refused to work with the lowest bidder.

ISC declined to comment on whether choosing another bidder would have jeopardized funding for the project. Michelson said all bidders met the necessary criteria, but confirmed the firm was later asked to leave.

Given this system, critics believe that keeping tabs on performance of firms working on major infrastructure is fundamental. “The feds are the ones paying for this. The fact that they would claim that they don’t bother to check whether or not the job gets done right speaks to the systemic negligence,” said Angus.

The Mississaugas of Scugog Island First Nation was also among those that hired KCL in recent years to work on a new water treatment and distribution system. A project manager, Kelvin Jamieson, said there were several change orders and a five-month delay on the project in southern Ontario, but didn’t believe it was anything out of the ordinary.

“I would still give KCL a reference,” said Jamieson.

Chief Kelly LaRocca declined to provide further comment on the contractor, explaining that the nation had signed a confidentiality and non-disparagement agreement to move the project towards completion.

For Vandenberghe, the chronic issues that First Nations face are related to colonial structures that impede the development of communities.

“We’re still thought of as less than human, as objects, as things, as a problem, as an issue that can be swept aside and you put them in reserves, and then you can just ignore it,” she said.

“But we can’t be ignored. We are people, and we are people who live within this country, a nation of nations. We have a right, and we need people to help us get basic human rights to all of our people … because the government isn’t going to change unless the voices of Canadians and Indigenous people speak up and make the government pause and listen. And then change will come.”

— With files from Tom Fennario, Krista Hessey, Andrew Russell, Brittany Hobson, Laurence Brisson Dubreuil and Mike De Souza

See the full list of “Broken Promises” series credits and more information about the consortium here.

Produced by the Institute for Investigative Journalism, Concordia University

For tips on this story, please contact the reporters at: iij.tips(at)protonmail.com

The consortium reached out to Gerald Landry, president of Kingdom Construction, for a followup interview regarding the allegations outlined. He declined and referred us to his original statement provided in December 2020.

See that below:

Further to my (response) yesterday where I outlined some of the inherent complexity of lump-sum hard bid projects, I wanted to provide you with answers to your questions regarding the work we have done with First Nations communities over the past decade.

Hopefully I address your questions in my response and provide you with more context about how we have performed difficult work in remote communities, in collaboration with First Nations, engineers, other trades, suppliers and government funders.

I’d like to start by saying that our construction work is always performed to the very highest-quality standards. We pride ourselves in doing excellent work and public documentation and project payment certificates can attest to this. Any suggestion otherwise is categorically false.

We are proud of the work we have done in First Nations communities using our considerable experience with water and wastewater projects across Canada. Our work is conducted with the utmost care according to what has been prescribed in our contracts, which are based on engineers designs, plans and specifications. We never walk away from our obligations. We perform the work as outlined in our contract and as such, cannot comment on concerns being raised when they are not part of our scope of work.

We provide a one-year warranty on our construction work and always address any lingering issues in accordance with our contractual obligations. Inherently, all construction projects have deficiencies and those are addressed in the scope of our work and certified by the engineer when they are satisfied with the final work. Final project payment certificates, signed by the project engineer, confirm the terms of the contract have been met. In any project, there can be unforeseen expenses and potential delays, but these additional costs are always approved by the design engineers based on the facts on the ground. Payments are rewarded accordingly, and only when work is completed.

Even when we had successfully completed our share of the work on these projects, we understand the disappointment that is felt when there is dissatisfaction with the outcome or the project as a whole is not ultimately completed.

We have the utmost respect for the members of the communities in which we have worked and pride ourselves on the efforts we have made to foster good working relationships. We are not aware of any evidence of racism by Kingdom or its employees — we take any allegation of racism very seriously and have very strict policies and procedures in place to deal with any potential issue.

I acknowledge the use of the term Native is culturally insensitive and outdated and I wish to sincerely apologize for using it in a recent media interview.

We understand many people are still without clean drinking water in our country and this is completely unacceptable. While we did our very best to help fix this problem where we could, the solutions to this problem are complex and dependent on many different factors and parties.

I sincerely hope the above is helpful in understanding the original contractor’s point of view.

Gerald Landry

PRESIDENT

KINGDOM CONSTRUCTION LIMITED