Federal departments fall short of Ottawa's 5% Indigenous procurement target

National Observer

a day ago

Several of Canada's federal departments didn't meet the mandated target for Indigenous procurement in 2023-2024, according to government documents obtained by Canada's National Observer through an Access to Information request.
The policy, introduced in 2021, requires that at least five per cent of all federal spending must go to Indigenous businesses to address economic gaps and increase Indigenous participation in government supply chains.
Although the federal government as a whole awarded more than $1.24 billion in contracts to Indigenous businesses last year — representing 6.1 per cent of all eligible contracts — the documents show significant variation in the awarding of federal contracts between departments.
An Indigenous business is defined as one owned and operated by elders, band and tribal councils, businesses in the Indigenous Business Directory or on modern treaty beneficiary lists.
Key organizations did not reach the five per cent threshold for the period — including Transport Canada, Global Affairs Canada, National Defence, the Public Health Agency of Canada, Statistics Canada, the Canadian Space Agency, Public Services and Procurement Canada, the Canada Border Services Agency, Canadian Heritage and the National Research Council of Canada (NRC).
Departments that did not meet the target cited several persistent challenges: a lack of Indigenous businesses in highly technical sectors, legacy contracts signed before the five per cent rule, contracts set aside for Indigenous businesses that received no bids and the complexity of the federal procurement process.
Transport Canada, in an email response to Canada's National Observer, confirmed it did not meet the target last year, citing 'delays and structural challenges within procurement processes' that limited Indigenous business participation. The department said new training and engagement tools are being implemented and it remains committed to reaching the target by the end of the current fiscal year.
The federal government awarded $1.24B in contracts to Indigenous businesses last year — but the numbers varied widely across departments.
The NRC also fell short, pointing to a limited pool of Indigenous suppliers for specialized scientific and technical equipment. It launched an Indigenous procurement strategy and action plan in September 2024, focusing on partnerships with Indigenous organizations, events and changes to the tender process.
'Meeting our target requires that we address the challenge of the current level of Indigenous business activities in supplying many of the products and services we procure, particularly those of a specialized nature,' the NRC said.
Statistics Canada awarded just 2.75 per cent of its contract value to Indigenous businesses in 2023–2024. In its response, it said it fell short of its target in 2023-24 because 85 per cent of its 'informatics professional services' contracts were awarded through Public Services and Procurement Canada, which determines the procurement strategy, and 13 per cent of contracts were issued before the agency's Indigenous procurement plan took effect. Of the three new contracts awarded within Statistics Canada's delegation, two were designated for Indigenous businesses, but no bids were received for those opportunities.
The agency said it saw an increase to 11 per cent in the current fiscal year after implementing a new procurement plan and boosting outreach to Indigenous suppliers.
Public Services and Procurement Canada said while it missed its five per cent Indigenous contracting target for 2023-24, it is working to boost Indigenous participation through Indigenous subcontracting, training and Indigenous-by-default procurement by next fiscal year.
The Public Health Agency of Canada said it is still working with other departments to improve Indigenous procurement, after missing its 2023-24 target and awarding only 1.5 per cent of 2024-25 contracts to Indigenous businesses — a figure not yet publicly released.
Other departments that did not meet the five per cent target by the end of 2023–2024, including Global Affairs Canada and National Defence, have not yet provided responses to Canada's National Observer request for comment and clarification.
Indigenous Services Canada told Canada's National Observer the results for the 2024–25 fiscal year are not yet available.
The department continues to support Indigenous businesses through initiatives such as the Aboriginal Entrepreneurship Program, The Strategic Partnerships Initiative and the Indigenous Business Navigators. These programs do not focus on specific sectors, but offer economic opportunities, tools, and support for capacity-building for Indigenous entrepreneurs in the industries it has chosen to develop, said Anispiragas Piragasanathar, a spokesperson for Indigenous Services Canada.