Facts about federal Indigenous procurement policies and practices

The Procurement Strategy for Indigenous Business is working

The Procurement Strategy for Indigenous Business (PSIB) is an effective way to level the playing field for Indigenous businesses across Canada. It provides them with an opportunity to compete for Government of Canada contracts, grow and thrive, and invest in the Indigenous economy.

The strategy is working. In 2023-24, the Government of Canada awarded over $1.24 billion in contracts to Indigenous businesses, representing 6.1% of all eligible government contracts, of which about 40% were awarded through set-aside opportunities specific to Indigenous businesses under the PSIB.

The nearly 3,000 businesses listed on the Indigenous Business Directory (IBD) must meet rigorous criteria to be included on the directory. Every application to be on the list is verified, including to make sure that the business owners are First Nations, Inuit or Métis, residing in Canada, and that the business is at least 51% owned and controlled by Indigenous Peoples.

Canada needs an Indigenous procurement strategy

Indigenous businesses have faced systemic barriers to economic development and full participation within the Canadian economy. They are underrepresented in federal procurement and the Canadian economy.

The procurement strategy reduces barriers, advances reconciliation, and supports the growth of Indigenous businesses.

The Indigenous Business Directory lists Indigenous owned businesses

The Indigenous Business Directory (IBD) is an online public directory of businesses owned and controlled by Indigenous people in Canada.

The almost 3,000 businesses on the Indigenous Business Directory (IBD) must meet rigorous criteria to be included on the directory. 

Being listed on the IBD means that a business has been deemed Indigenous according to our criteria. Every business applying to be included on the IBD is verified to make sure the business is at least 51% owned and controlled by Indigenous Peoples. It does not guarantee that the business will receive contracts set aside for Indigenous businesses.

The directory increases opportunities for Indigenous businesses by helping all levels of government and the private sector identify Indigenous businesses that can fulfill procurement needs.

Businesses are verified to confirm they meet the eligibility rules

To be on the directory, business owners must be First Nations, Inuit or Métis, residing in Canada, and the business must be at least 51% owned and controlled by Indigenous Peoples.

Evidence of being an Indigenous person for registration on the IBD includes, but is not limited to:

• Indian registration in Canada
• citizenship with the Manitoba Métis Federation, the Northwest Territory Métis Nation, or a Governing Member of the Métis National Council, including: the Métis Nation Saskatchewan; the Métis Nation of Alberta; the Métis Nation British Columbia and the Métis Nation of Ontario
• membership in an affiliate of the Congress of Aboriginal Peoples, or other recognized Indigenous organization in Canada
• acceptance as an Indigenous person by an established Indigenous community in Canada
• enrolment or entitlement to be enrolled pursuant to a comprehensive land claim agreement, or membership or entitlement to membership in a group with an accepted comprehensive claim.

When an applicant's corporate structure is complex, Indigenous Services Canada (ISC) uses third-party auditors to assess the application.

Modern Treaty holders also maintain Indigenous business lists that can be used to find verified Indigenous businesses for federal procurement under PSIB.

Proof is required to be included in the directory

Businesses must also provide proof, including on their corporate structure and governance, to demonstrate at least 51% Indigenous ownership and control. When an applicant's corporate structure is complex, Indigenous Services Canada (ISC) uses third-party auditors to assess the application.

In addition, ISC verifies whether a business has maintained its eligibility on a regular and ongoing basis through a variety of ways, including audits. Registered businesses that no longer meet the eligibility requirements are removed from the directory.

For contracts valued at or greater than $2 million, a business is subject to a pre-award audit to verify that it meets the Indigenous ownership and control criteria. Pre-award audits may also be conducted for contracts less than $2 million when a need is identified.

Businesses included on a modern treaty business list are confirmed to be Indigenous by the Indigenous group that has signed the modern treaty with Canada.

The businesses in the directory vary in size, capacity and expertise

There are no restrictions on the size or type of business that can register for the IBD. Indigenous businesses provide a wide range of necessary products and services to federal government departments. Indigenous businesses are a part of Canada's defence supply chain, provide office furniture and building maintenance, offer IT solutions and services, and much more.

The number of businesses on the IBD changes

There are about 3,000 businesses on the IBD. The number of businesses listed on the IBD fluctuates over time. For an exact number of current registrations, please check the IBD.

Businesses can be removed from the directory for a variety of reasons

Companies on the directory can be removed for all sorts of reasons. The business may have closed, or no longer wishes to be listed on the directory. As well, there may have been a change in the business' ownership or control that affected the company's eligibility to be listed on the IBD.

Non-Indigenous businesses are allowed to partner in contractual joint ventures with Indigenous companies on the directory

Some Indigenous businesses may not have the capacity to compete for larger government contracts. Through joint ventures, Indigenous businesses can partner with other businesses, including non-Indigenous businesses, to increase their ability to compete for contracts. Joint ventures also provide Indigenous businesses with opportunities to build their capacity and benefit from the transfer of skills and knowledge.

Joint ventures can be included in the IBD if they meet the PSIB eligibility criteria. If they are awarded a PSIB contract, the joint venture must meet the Indigenous content requirement throughout the duration of the contract, which means that at least 33% of the work must be completed by an Indigenous business.

Joint ventures are beneficial and effective

Through consultations and engagements, ISC has heard from Indigenous partners that joint ventures are a beneficial and effective way for Indigenous businesses to operate, when thoughtfully and effectively managed, and generally when part of a specific project or contracting objective.

Contractual joint ventures are not common on the IBD

Contractual joint ventures represent less than 3% of businesses listed on the IBD.

Consultations with Indigenous businesses have helped shape the Procurement Strategy for Indigenous Business

The Procurement Strategy for Indigenous Business, formerly the Procurement Strategy for Aboriginal Business, has been around since 1996 and has had many changes and updates since it first began.

More recently, between 2018 and 2021, the Government of Canada conducted consultations with Indigenous businesses, and minor updates were made in 2021 to reflect the feedback received during these consultations.

Since 2021, significant engagements with Indigenous partners have been underway to develop a Transformative Indigenous Procurement Strategy. Some of these partners include the:

• Assembly of First Nations
• Inuit Tapiriit Kanatami
• Métis National Council
• National Aboriginal Capital Corporations Association
• Canadian Council for Indigenous Business

A key component of this collaborative work is identifying a path to transfer the administration of the Indigenous Business Directory to Indigenous partners, so that Indigenous Peoples decide which businesses qualify as Indigenous based on their own self-determined criteria.

For more information, please visit: Mandatory minimum 5% Indigenous procurement target.