Facts about federal Indigenous procurement policies and practices

Canada needs an Indigenous procurement strategy

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

Procurement Strategy for Indigenous Business (PSIB) reduces barriers, advances reconciliation, and supports the growth of Indigenous businesses.

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

PSIB, 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.

The Procurement Strategy for Indigenous Business is working

PSIB is an effective way to create fair and equitable opportunities for Indigenous businesses across Canada. It provides them with an opportunity to compete with other Indigenous businesses for Government of Canada contracts, grow and thrive, and expand the Indigenous economy.

The strategy is working. In 2023-24, the Government of Canada awarded over $1.24 billion in contracts to Indigenous businesses, surpassing the 5% minimum target and 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 Indigenous Business Directory is constantly being updated and expanded, and currently lists close to 3,000 Indigenous businesses in Canada. To be added to the directory, business owners must provide accepted documentation to demonstrate they are First Nations, Inuit or Métis, residing in Canada, and the business must be at least 51% owned and controlled by Indigenous people.

Audits have not found widespread fraud in the PSIB

Past audits of PSIB have identified gaps and areas for improvement, but they have never found evidence of fraud.

The most recent audit was completed in May 2025 and covers activities from April 1, 2022, to March 31, 2024. It both highlights positive results and recommends improvements to further protect and strengthen the integrity of PSIB and the Indigenous Business Directory. All recommendations listed in the report have been accepted by Indigenous Services Canada and the Management Action Plan lays out how the Department will address them.

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 Peoples in Canada. It increases opportunities for Indigenous businesses by helping all levels of government and the private sector identify Indigenous businesses that can fulfill procurement needs.

Being listed on the IBD means that a business meets the eligibility criteria of being 51% Indigenous-owned and -controlled. It does not guarantee that the business will receive contracts set aside for Indigenous businesses.

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

There are no restrictions on the size, type, or location in Canada of business that can register for the IBD. Indigenous businesses provide a wide range of necessary products and services to federal government departments and agencies. 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 are verified to confirm they meet the eligibility rules

All businesses are required to provided documented proof of Indigenous status.  Self-identification is not accepted.
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 with a recognized Indigenous group
• acceptance as an Indigenous person by an established Indigenous community in Canada
• enrolment or entitlement to be enrolled pursuant to a comprehensive land claims 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) may use 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 contracts that count towards the mandatory minimum 5% Indigenous procurement target, including federal procurements under PSIB.

Proof is required to be included in the directory

As part of the verification process, businesses applying to be added to the Directory must provide documentation demonstrating at least 51% Indigenous ownership and control, such as shareholder or other ownership information and corporate governance documents. Ownership of an Indigenous business refers to "beneficial ownership," meaning the individual or group who ultimately controls and benefits from the business.

ISC reviews registered businesses on the IBD through a variety of ways, including compliance reviews approximately every two years and audits, to make sure they continue to meet eligibility criteria. Registered businesses that no longer meet the eligibility criteria are removed from the directory.

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

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

Businesses on the directory can be removed for all sorts of reasons. Businesses may have closed, or no longer wish to be listed on the directory. As well, there may have been a change in the business' ownership or control that affected its eligibility to be listed on the IBD, or it was unresponsive when ISC attempted to reverify its eligibility.

Indigenous businesses are allowed to partner with non-Indigenous businesses in contractual joint ventures

Some Indigenous businesses may not have the capacity to compete for larger federal 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 IBD eligibility criteria. The joint venture agreement must demonstrate that the Indigenous partner has a lead role in the business activities of the joint venture, with direct responsibility for managing and executing core business activities for any contracts the joint venture may receive. The non-Indigenous business can provide technical and operational support, but their role must not substitute or displace the Indigenous partner's role in delivering the contracted work.

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.

ISC has strengthened the Indigenous Business Directory

Since 2023, Indigenous Services Canada assumed the responsibility for the vast majority of IBD assessments and audits from third-party auditors. This led to better record keeping and more consistent standards. More detailed assessments to clearly show 51% Indigenous ownership and control were also developed, and formal records of decisions are now kept to track changes in the Directory more accurately.

Other improvements to protect the integrity of the IBD include:

• expanded verification capacity to increase the number of compliance reviews each year
• business verification guidelines for program staff, including a checklist, approval template, and record of decision for new registrations
• more robust assessment criteria for all business types
• standardized processes for document retention of applications, compliance reviews, audits, and other supporting documentation
• training materials and a training plan for employees to understand program eligibility requirements, business structures, and how to spot potential indicators of fraud.

ISC is working toward Indigenous-led governance of the Indigenous Business Directory

ISC is collaborating with Indigenous partners to transfer administration of the IBD so Indigenous peoples can set their own criteria for qualifying businesses.

Between 2022 and 2024, significant engagements with Indigenous partners took place to identify key policy elements to co-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

ISC launched a full review of all businesses on the Indigenous Business Directory in 2024

In October 2024, ISC launched a comprehensive review of all entries in the Directory to confirm that registered businesses continue to meet eligibility requirements. Businesses that do not meet the criteria or that do not respond to verification requests were removed.

ISC promotes Indigenous participation in federal procurement

The goal of PSIB is to support Indigenous businesses and business owners by increasing their participation in government procurement across Canada. There are no restrictions on the location, size or type of business that can register for the Indigenous Business Directory.

ISC, via Procurement Assistance Canada, hosts national awareness sessions to encourage Indigenous businesses from across Canada to register on the Indigenous Business Directory for greater business visibility. ISC also supports Indigenous businesses in navigating the federal procurement process and positioning themselves to be "bid ready."

ISC also funds Indigenous organizations to raise awareness and increase participation in federal procurement, including:

• Joint Economic Development Initiative
• Canadian Council for Indigenous Business
• Council for the Advancement of Native Development Officers

Most PSIB contracts are competitively sourced, and bids are evaluated against a set of criteria previously established by the department or agency that is tendering the contract. PSIB does not dictate the evaluation criteria and a business' location within Canada is irrelevant for PSIB eligibility.

Regional contracting data is improving

Federal departments give ISC information about contracts awarded to Indigenous-owned businesses. ISC uses this information to track the Government of Canada's requirement that at least 5% of the total value of federal contracts go to Indigenous businesses – this includes all contracts awarded to Indigenous businesses, including, but not limited to, those awarded under PSIB. 

Provincial and territorial contracting breakdown for 2023 to 2024

Table 1 shows the value of contracts over $10,000 that federal departments and agencies awarded to Indigenous businesses in the 2023 to 2024 fiscal year.

We did not collect vendor postal code data in the 2022 to 2023 fiscal year, but this information is now available for 2023 to 2024.

The total value of contracts valued at $10,000 or more that were awarded to Indigenous businesses and reported to Indigenous Services Canada (ISC) across all provinces and territories in 2023 to 2024 is $1,012,170,400.61. This total includes contracts where the postal code was blank or redacted.

Federal departments and agencies are responsible for the accuracy of the information they submit to ISC.

How we analyze vendor location data

We analyze results by province or territory using the first three characters of the vendor's postal code. However, the business address of the vendor is not necessarily correlated with the location that the good and/or service was delivered to.

Because the Northwest Territories and Nunavut share the same first postal code digit, we cannot separate their results effectively.

Why totals are different from values published on Open Government

The total value of contracts awarded to Indigenous businesses in the 2023 to 2024 fiscal year on the Open Government portal is $1.24 billion. This amount is higher than the value in the table below.

Several factors explain this difference:

Departments report 2 types of information to ISC:

• aggregate values for all contracting with Indigenous businesses
• contract details, which include postal codes, and which may be incomplete or withheld.
• The provincial/ territorial breakdown is based only on contracts details valued at or over $10,000 that were submitted to ISC by departments.

In addition:

• Some contracts may not include postal code details for national security reasons
• ISC does not receive vendor location details for contracts under $10,000 because departments report these as a combined total of all the values of these smaller contracts
• Subcontracting values and details are not included because they do not appear in Proactive Publication reports and are optional in 5% target reporting

Contracts awarded to Indigenous Businesses:  Provincial and territorial results for 2023 to 2024