Question Period Note: Increasing Indigenous involvement in procurement

Public Services and Procurement Canada, in partnership with Indigenous Services Canada and the Treasury Board of Canada Secretariat, is actively working to increase the participation of Indigenous businesses in federal procurement.

Note: All questions regarding the Indigenous Business Directory, verification of Indigeneity and alleged cases of Indigenous misrepresentation should be directed to Indigenous Services Canada

• Public Services and Procurement Canada is committed to economic reconciliation with Indigenous Peoples, and is working with Indigenous Services Canada and the Treasury Board of Canada Secretariat to increase Indigenous participation in federal procurement to meet the minimum target of 5% government-wide
  • We are taking concrete action to increase Indigenous participation in procurement, including:
  • applying approaches to ensure Indigenous participation is considered in the development of procurement processes, including Indigenous Participation Plans in contracts to provide subcontracting opportunities and other economic benefits; and
  • providing dedicated procurement opportunities to Indigenous businesses whenever possible

If pressed on contracts awarded to suppliers removed from the Indigenous Business Directory:

• Indigenous Services Canada is responsible for the verification of a business’s ability to meet the eligibility requirements to be listed on the Indigenous Business Directory
• it also confirms a business’s compliance with the Indigenous content requirements for the purpose of Procurement Strategy for Indigenous Business
• when supplier misconduct or wrongdoing is detected and referred to my department, my officials have various tools at their disposal and are ready to take the required action to protect the integrity of the federal procurement system
• together with Indigenous leaders and Indigenous Services Canada, Public Services and Procurement Canada is determining a path forward to transfer the administration of the business lists to Indigenous partners

If asked about contracts below $250,000 being reserved for Indigenous businesses:

• in April 2022, Public Services and Procurement Canada implemented its Indigenous First strategy to consider procurement with Indigenous businesses for all internal opportunities in support of the department
• in November 2025, an internal communication reinforcing the importance of respecting this strategy was issued. Employees were advised that contracts under $250,000 would be the primary focus of enhanced measures to ensure the approach is being consistently applied
• in March 2026, Public Services and Procurement Canada issued a clarification to the November 2025 communication. To help advance the 5% Indigenous procurement objective, teams are asked to prioritize and actively consider Indigenous businesses for procurement activities, particularly for contracts valued at $250,000 or less. This does not, however, change the existing strategy for increasing procurement with Indigenous businesses, which was implemented in April 2022

If pressed on the Office of the Procurement Ombud Procurement Practice Review of Contracts Awarded to Indigenous Businesses:

• we take the Procurement Ombud’s findings seriously and continue to work closely with Indigenous Services Canada to strengthen guidance, oversight, and consistency supporting the implementation of the Procurement Strategy for Indigenous Business set‑asides
• Public Services and Procurement Canada agrees that clearer, unified guidance is essential to better support the federal procurement community and ensure that Procurement Strategy for Indigenous Business requirements are applied accurately and consistently across government
• the department is actively collaborating with Indigenous Services Canada to review and enhance procurement operational guidance, and will ensure that updates to Public Services and Procurement Canada tools are accurate, timely, and aligned with Indigenous Services Canada’s policy direction

On August 6, 2021, the Government of Canada announced a mandatory requirement for federal departments and agencies to ensure that a minimum of 5% of the total value of contracts is held by Indigenous businesses by 2024 to 2025. The announcement included Canada’s commitment to continue meaningful engagement to co-develop a longer-term transformative approach to Indigenous procurement and to increase the capacity of Indigenous-owned businesses to compete and receive more federal procurement contracts.

The procedures for reporting on contracts awarded to Indigenous businesses are set out in Appendix E: Mandatory Procedures for Contracts Awarded to Indigenous Businesses, of the Treasury Board Directive on the Management of Procurement. The Directive ensures that procurement of goods, services and construction obtains the necessary assets and services that support the delivery of programs and services to Canadians, while ensuring best value to the Crown.

On April 1, 2022, Public Services and Procurement Canada (PSPC) implemented a strategy requiring all internal Low Dollar Value procurements (under $3.75 million) to first be considered for competition and award to Indigenous businesses. Where procurements could not, or would not, be considered for Indigenous businesses first, departmental policy required that the rationale be documented in the procurement file.

In 2023 to 2024, PSPC awarded 3.41% ($143 million) of the total value of its procurements to Indigenous businesses. As PSPC did not achieve its 5% target commitment in the 2023 to 2024 fiscal year, concrete actions are being taken to help increase Indigenous business participation in federal procurement, including developing Indigenous Participation Plans to boost subcontracting with Indigenous businesses and provide employment and training opportunities for Indigenous Peoples; using limited bidding among prequalified Indigenous offerors; updating supply methods to include Indigenous businesses; structuring and unbundling projects to enable competitive Indigenous bids; and incorporating weighted Indigenous criteria in bid evaluations. PSPC also continued to increase awareness of federal procurement opportunities through its outreach and engagement activities.

As part of these efforts, starting in 2024 to 2025, PSPC’s methodology to calculate the 5% target included the value of subcontracts awarded to Indigenous companies by non-Indigenous suppliers. In 2024 to 2025, PSPC awarded 3.16% of the total value of all its contracts to Indigenous businesses for the fiscal year ($234 million). PSPC’s overall procurement budget increased by more than $1.5 billion (27%), to a total of $7.4 billion, due to 3 large contract amendments in 2024 to 2025. None of these long-term contracts were originally with Indigenous businesses and, therefore, there was a significant impact on achieving the 5% target.

PSPC has no role in determining which suppliers are on the Indigenous Business Directory. However, when an authority such as Indigenous Services Canada determines there has been misrepresentation by a supplier or false claims have been made, the case can be referred to PSPC for action. Responses may include

• contractual remedies in instances where PSPC is the contracting authority
• referrals to law enforcement for possible criminal investigation
• referrals to PSPC’s Office of Supplier Integrity and Compliance for assessment against the Ineligibility and Suspension Policy

In February 2026, PSPC introduced a new Liquidated Damages clause for set-aside programs to deter and address impropriety. The clause provides a clear, enforceable remedy that enables Canada to recover predetermined damages if a contractor fails to comply with set-aside requirements, including cases such as misrepresentation.

The Office of the Procurement Ombud conducted a Procurement Practice Review of Contracts Awarded to Indigenous Businesses for the period of April 1, 2023, to March 31, 2025, to assess whether procurement practices aligned with applicable legislation, regulation, policies, and guidance. The Ombud’s report highlights significant gaps in clarity, guidance, and oversight across government that limit the effective and consistent implementation of the Procurement Strategy for Indigenous Business (PSIB). Overall, the findings point to inconsistent application, limited oversight, and varying departmental interpretations of PSIB requirements, underscoring the need for clearer government-wide direction and more coherent oversight to strengthen Indigenous procurement outcomes.

The report points out that bidders on contracts that are set-aside for Indigenous businesses have no access to the Canadian International Trade Tribunal or a similar recourse mechanism, and proposes that the Procurement Ombud could fill this role while a more permanent solution is found.

• As of January 30, 2026, there are approximately 2,800 businesses on the Indigenous Business Directory, led by Indigenous Services Canada

  • All departments have a minimum target to award 5% of the total value of procurements to Indigenous businesses
  • Participation of Indigenous suppliers in procurement processes:
  • 2022 to 2023: Target at least 11%; result 7%
  • 2023 to 2024: Target at least 11%; result 10%

  • 2024 to 2025: Target at least 11%; result 16%

  • Total value of contracts awarded to Indigenous businesses

  • 2022 to 2023: Planned 5%; actual 2.7% (approx. $139 million)
  • 2023 to 2024: Planned 5%; actual 3.41% (approx. $143 million)
  • 2024 to 2025: Planned 5%; actual 3.16% (approx. $234 million)