Indigenous procurement: the federal 5 percent target and what it means in BC

Indigenous procurement has grown from a niche program into a significant part of how the federal government buys, and it's spreading to other public buyers. For Indigenous-owned trade businesses in BC, it's an opportunity. For everyone else, it's a reason to think about partnerships.

What is the federal 5 percent target?

The Government of Canada requires that at least 5 percent of the total value of federal contracts go to Indigenous businesses. All contracts awarded to Indigenous businesses count, not just set-asides. Indigenous Services Canada reports that in 2023-24, federal contracts worth more than $1.24 billion went to Indigenous businesses, about 6.1 percent of eligible contracts, and its 2024-25 figures show about $1.04 billion, or 5.1 percent.

What is PSIB?

The Procurement Strategy for Indigenous Business (PSIB) dates back to 1996. Its best-known tool is the set-aside: a contract reserved for competition among Indigenous businesses. Most PSIB contracts are still competitive; they're just competed among eligible Indigenous businesses. Indigenous Services Canada says about 40 percent of the value of contracts to Indigenous businesses in 2023-24 came through set-asides.

Who is eligible?

To bid on set-asides, a business must be listed in the Indigenous Business Directory (IBD). Listing requires the business to be at least 51 percent owned and controlled by Indigenous people, based on who really owns and benefits from it. Self-identification isn't enough: applicants provide documentation, and listings are reviewed about every two years. Joint ventures and other structures can qualify if they meet the rules.

Being listed confirms eligibility; it doesn't guarantee contracts. You still have to win them.

What does this mean in BC?

BC has a large number of federal sites (RCMP detachments, parks, ports, fisheries and defence facilities), many in or near First Nations communities and rural areas where Indigenous-owned businesses are already the local contractors. Federal buyers looking to meet the target look for capable Indigenous suppliers in exactly those trades: grounds, snow, janitorial, maintenance, construction and environmental work.

Outside federal work, some BC public buyers score Indigenous participation as part of social value criteria, and First Nations themselves are significant buyers of services in their own communities.

If you're an Indigenous-owned business

1. Apply to the Indigenous Business Directory if you're eligible. Have your ownership documentation ready.
2. Register on CanadaBuys so you can bid. See the registration guide.
3. Search for set-aside notices in your trade and region on CanadaBuys.
4. Build capacity before the big one: insurance, WorkSafeBC, safety program and references. See the paperwork buyers ask for.

If you're not Indigenous-owned

You can't bid on set-asides yourself, and you shouldn't try to look eligible: the rules focus on real ownership and control, and the government verifies them. But genuine partnerships are welcome:

• Subcontract to Indigenous-owned primes, or bring Indigenous subcontractors into your bids where it makes sense.
• Hire and train locally, including in First Nations communities near the work.
• Form real joint ventures where ownership, control and benefits match the paperwork.

Scored criteria increasingly reward this. Specific, verifiable commitments score; vague ones don't.

Where to go next

Federal contracts in BC covers how federal buying works more broadly.