Indigenous and set-aside procurement in Canada: a contractor's guide (2026)
How Indigenous procurement works in Canadian public contracting — the federal 5% target and the Indigenous Business Directory, how set-asides work, what they mean if you're not Indigenous-owned, and the separate provincial and municipal programs.
By Joseph Morrison · Founder, Cornerstone Contracts
A growing share of Canadian public construction is directed, by policy, toward Indigenous-owned businesses. For Indigenous contractors that's an expanding set of opportunities; for everyone else it shapes how some tenders are structured and who can bid. Either way, it pays to understand how these programs actually work. Here's a plain-language overview — federal first, then the provincial and municipal layers.
The federal program and the 5% target
The federal Procurement Strategy for Indigenous Business (PSIB) — formerly the Procurement Strategy for Aboriginal Business — gives Indigenous businesses preferential access to federal contracts, mainly through set-asides. Its headline commitment: every federal department and agency must direct a mandatory minimum of 5% of the total value of its contracts to Indigenous businesses each year. Announced in 2021 and phased in over roughly three years, the target applied across government by the 2024–25 fiscal year.
Who counts as an Indigenous business
Federally, an Indigenous business is one that is at least 51% owned and controlled by Indigenous persons — First Nations, Inuit, or Métis ordinarily resident in Canada — and registered in the Indigenous Business Directory (IBD) (or on a modern-treaty beneficiary list; businesses owned by Elders, bands, or tribal councils are recognized without IBD registration). "Owned and controlled" means real beneficial ownership and day-to-day operational control, not a nominal arrangement.
Verification has tightened in recent years: Indigenous Services Canada took over the majority of directory assessments in 2023, and an audit of the program was completed in 2025. The practical takeaway for any business considering registration is that ownership and control will be examined and can be audited.
How set-asides work — and what they mean if you're not Indigenous-owned
A federal procurement can be set aside for Indigenous businesses in two ways: mandatory set-asides (required where a procurement primarily serves an Indigenous population) and voluntary ones (where a department judges there's enough Indigenous-supplier capacity). On CanadaBuys, a set-aside is identified in the tender notice, and bidders complete a certification that they meet — and will maintain — the eligibility requirements, subject to audit before and after award.
If you're not an Indigenous business, a set-aside isn't closed to you — but you can't be the prime. The recognized routes are:
- Joint venture — eligible if it's at least 51% owned and controlled by an Indigenous business, with the Indigenous partner in the lead role managing and performing the core work. A non-Indigenous partner can provide technical or operational support, but can't substitute for that lead role.
- Subcontracting — you can work as a subcontractor to an eligible Indigenous prime. When an Indigenous prime subcontracts, it must certify that at least 33% of the value of the work is performed by an Indigenous business.
These are substantive requirements with real lead-role and content tests, not a formality — and they're audited.
Provincial and municipal programs (each with its own rules)
Beyond the federal program, provinces and cities run their own — and crucially, each sets its own targets and definitions. Don't carry the federal 5% over to non-federal work. A few examples:
- Regina adopted a municipal Indigenous procurement policy in February 2023 with a target of directing 20% of contract value to Indigenous vendors in Saskatchewan.
- Saskatoon has an Indigenous Procurement Protocol within its purchasing policy, folding Indigenous suppliers into a broader "diverse supplier" commitment.
- British Columbia runs an Indigenous Procurement Initiative aligned with its Declaration on the Rights of Indigenous Peoples Act (DRIPA).
- Ontario has an Indigenous Procurement Program that can include Indigenous-only opportunities, partnership requirements, and evaluation criteria that reward Indigenous participation.
Definitions differ too — some programs use a broader "diverse supplier" threshold, some add a geographic qualifier, some mirror the federal 51% test. So the rule is simple: read the specific solicitation's own definition and registry requirements rather than assuming one program's rules apply to another.
The short version
- The federal target is a 5% minimum of contract value to Indigenous businesses, applied government-wide by 2024–25.
- Federally, an Indigenous business is 51% Indigenous-owned and controlled and registered in the IBD (with recognized exceptions).
- On a set-aside, a non-Indigenous firm participates via an Indigenous-led joint venture (≥51%) or as a subcontractor, with a 33% Indigenous-content certification when an Indigenous prime subcontracts — all subject to audit.
- Provincial and municipal programs are separate, with their own targets and definitions — verify each solicitation.
If you're weighing whether a particular tender fits, that's a judgment call worth making deliberately — see our go/no-go framework. And to find the work in the first place, browse what's open across Alberta, Saskatchewan, and British Columbia, then start free to see tenders matched to your profile.
Indigenous and set-aside procurement programs are set by each government and change over time. This is a general overview, not legal advice — confirm current eligibility rules, definitions, and certification requirements against the specific program and solicitation, and seek professional advice on joint-venture or certification questions.