Field guide · Selling to government
Indigenous set-asides and the PSIB, explained
Two guides in one. If you own an Indigenous business, this walks you through qualifying, registering, and finding federal set-asides you can bid on. If you are a supplier, buyer, or just want the honest picture, it covers what the Procurement Strategy for Indigenous Business is and the state it is in for 2026.
Sourced from Indigenous Services Canada, the Office of the Procurement Ombud, and CanadaBuys. Reviewed July 2026.
How Indigenous set-asides actually work
A set-aside is a federal contract reserved so only Indigenous businesses can bid on it. It runs under the Procurement Strategy for Indigenous Business, or PSIB, a framework roughly three decades old, with day-to-day guidance from Indigenous Services Canada and contracts run by individual departments and Public Services and Procurement Canada.
Set-asides come in three forms, and the difference matters when you decide whether to bid:
- Mandatory. A department must consider a set-aside when Indigenous people make up at least 51 percent of the population in the area a procurement will serve, or when Indigenous people or communities will be the primary recipients of the goods, services, or construction. There is no dollar threshold, so a mandatory set-aside can apply to a contract of any size. These set-asides are exempt from Canada's free trade agreement obligations, which is the legal basis for restricting bidding to Indigenous suppliers.
- Voluntary. A department may choose to reserve a procurement for Indigenous-only bidding outside the mandatory trigger, as long as it judges there is enough Indigenous capacity, which it checks against the Indigenous Business Directory, and can still meet its operational and best-value requirements.
- Conditional. A procurement can open to both Indigenous and non-Indigenous bidders and automatically convert to an Indigenous-only set-aside if two or more Indigenous businesses submit compliant bids.
How to spot one on a notice
A Notice of Proposed Procurement for a set-aside carries a mandatory statement: "This procurement has been set aside under the federal government's Procurement Strategy for Indigenous Business (PSIB). In order to be considered, a business must certify that it qualifies as an Indigenous business as defined under PSIB and that it will comply with all requirements of PSIB." Advance Contract Award Notices carry a similar statement. Behind the scenes, buyers select a specific PSIB agreement type when they post to CanadaBuys, which is what lets a set-aside be filtered out from everything else.
Open Indigenous set-asides right now
As of Oct 23, 2026 · CanadaBuys open dataSet-asides are only a slice of the hundreds of federal tenders open at any time. Open the browser and use the Indigenous set-aside toggle to see just the reserved ones.
Can you bid on this notice?
Whether you can bid on a federal notice depends on two things: what the notice says about the Procurement Strategy for Indigenous Business (PSIB), and who your firm is. As of October 22, 2026, only an Indigenous business listed on the Indigenous Business Directory, or on a modern treaty business list, can be the prime on a PSIB set-aside.
1"This procurement has been set aside under the federal government's Procurement Strategy for Indigenous Business (PSIB)."
Only a qualified Indigenous business can be the prime. Be listed on the directory or a modern treaty business list before you bid.
2If two or more compliant Indigenous bids are received, only those bids will be considered.
A conditional set-aside: open to every firm when it posts, Indigenous-only if enough Indigenous bids arrive.
3Bidders must submit an Indigenous Participation Plan.
You commit to Indigenous subcontracting, hiring or training, and after award it is enforceable. See what goes into a plan.
4Estimated contract value: $2,400,000.
At $2 million or more, Indigenous Services Canada must audit the ownership of the two best-assessed bidders before award, without seeing their prices. Missing documents can make a bid non-compliant.
5The Bidder certifies that it qualifies as an Indigenous business under PSIB.
You attest that you qualify on the day you bid and for the life of the contract. It can be audited before award, after award or at random.
What your notice says
Who you are
Worked example: the sample notice above, a $2.4 million PSIB set-aside, and an Indigenous-owned firm already listed.
All 16 answers, by notice type
PSIB set-asideIndigenous prime only
- Indigenous-owned, listed: Bid as the prime. Keep 33 percent of the work Indigenous if you subcontract.
- Not listed yet: Get listed first, then bid. Only listed businesses are considered. Registration is free.
- Joint venture: Bid only if the venture is 51% Indigenous-owned and controlled. Your agreement must show it.
- Non-Indigenous firm: You cannot be the prime. Subcontract to an Indigenous prime.
Conditional set-asideOpen, may close
- Indigenous-owned, listed: Bid. Two compliant Indigenous bids make it a set-aside.
- Not listed yet: Get listed first, so your bid counts as Indigenous. Listing comes before a set-aside bid counts.
- Joint venture: You count as Indigenous only at 51% Indigenous ownership and control. Below that, you bid as a non-Indigenous firm.
- Non-Indigenous firm: Bid, knowing it may close to you. Two compliant Indigenous bids and only theirs count.
Open, with a participation planPlan required
- Indigenous-owned, listed: Bid, and offer to partner. Other bidders can name you as their Indigenous partner.
- Not listed yet: Bid on the open terms. Get listed so bidders can name you as a partner.
- Joint venture: Bid, and put your partner's role in the plan. Commit only to what you can document.
- Non-Indigenous firm: Bid: your plan is part of the offer. After award its commitments are binding.
Open competitionOpen to all
- Indigenous-owned, listed: Bid on the open terms. A win still counts toward the 5 percent target.
- Not listed yet: Bid on the open terms. Register anyway for the next set-aside.
- Joint venture: Bid on the open terms. No Indigenous rule applies unless the notice adds one.
- Non-Indigenous firm: Bid on the open terms. PSIB rules do not apply here.
On a set-aside only an Indigenous business can be the prime; on an open competition anyone can bid.
Sources: Indigenous Services Canada, "Learn how federal Indigenous procurement works" and "PSIB compliance audit information"; Office of the Procurement Ombud, "Procurement set-aside programs". Read October 22, 2026.When does a set-aside become mandatory?
As of October 22, 2026, a mandatory set-aside under PSIB is triggered when the work is destined for an area where Indigenous people make up at least 51 percent of the population, or when Indigenous people will receive the goods, services or construction. The buying department must then consider limiting bidding to Indigenous businesses, unless that conflicts with a modern treaty.
| Trigger | Who decides | What you see on the notice |
|---|---|---|
| The area served is at least 51% Indigenous | The buying department must consider a set-aside | The PSIB statement and a certification |
| Indigenous people receive the work | The same department, same duty | The same statement and certification |
| A modern treaty area with procurement obligations | The treaty first; PSIB where it does not conflict | Treaty terms, which can include a participation plan |
Outside both triggers, a set-aside can still be voluntary or conditional.
Sources: Indigenous Services Canada, "Learn how federal Indigenous procurement works"; CanadaBuys, "Procurement Strategy for Indigenous Business". Read October 22, 2026.How to qualify and get on the Indigenous Business Directory
The Indigenous Business Directory is the federal registry of verified Indigenous businesses. Being listed is what lets you bid on set-asides and be counted toward the 5 percent target. Here is the path, drawn from the official Indigenous Services Canada guidance.
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Confirm you meet the ownership test
Indigenous people, First Nations, Inuit, or Metis, ordinarily resident in Canada, must own and control at least 51 percent of the business. Self-identification is not enough on its own. You need documented proof of Indigenous identity: Indian registration in Canada, citizenship with a recognized Metis nation or affiliated organization, acceptance as an Indigenous person by an established Indigenous community, or enrollment under a comprehensive land claim agreement.
Eligible structures include sole proprietorships, limited companies, cooperatives, partnerships, not-for-profits, bands, and joint ventures, as long as the 51 percent threshold is met.
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Gather your documentation
You will submit incorporation or registration documents, your shareholders' or members' register, banking and governance records, board or management meeting minutes, and tax returns. For a joint venture or partnership, the agreement must state the ownership percentage, control structure, roles, and financial-distribution terms, include an entire-agreement clause, and come with a statement signed by all partners, dated within 60 days, confirming no undisclosed changes.
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Check you are not barred
A business that is suspended or found ineligible under Canada's Supplier Integrity Compliance policies cannot register. Confirm your standing before you apply.
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Register online, for free
Apply through the Indigenous Services Canada portal at services.sac-isc.gc.ca/REA-IBD. There is no registration fee, and the support contact is REA-IBD@sac-isc.gc.ca. The form itself is short to complete.
Approval and verification are currently taking longer than the historical norm because of application volume, and no official day or week turnaround is published. Apply well before a set-aside you want to bid on closes.
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Bid, then stay compliant
Once you are listed, you can bid on mandatory, voluntary, and conditional set-asides, and you can also be named as an Indigenous partner to earn Indigenous Participation Plan credit on open competitions. After award, be ready for a compliance or post-award audit, keep your records current, and expect roughly two-year compliance reviews. Indigenous Services Canada also launched a comprehensive re-verification of every existing directory listing in October 2024, so an existing listing may still be checked.
The program in 2026: what the reviews found
PSIB is in the middle of an overhaul, and any current guide has to say so plainly. In March 2026 Canada's own procurement watchdog flagged the headline numbers as overstated, found a core rule going largely unchecked, and set a reform timeline. This is not a reason to avoid set-asides. A tighter program means less fraud competing for the same reserved contracts, which is good for legitimate Indigenous businesses.
The Procurement Ombud's review, March 2026
On March 26, 2026, the federal Office of the Procurement Ombud released a Procurement Practice Review of how PSIB contracts are administered. It examined Indigenous Services Canada's guidance plus the practices of four departments, Employment and Social Development Canada, Correctional Service Canada, Shared Services Canada, and Public Services and Procurement Canada, across 27 PSIB set-aside contracts. Four findings stand out:
- The headline numbers overstate real benefit. The government reported awarding over $1.24 billion to Indigenous businesses in 2023-24, or 6.1 percent of eligible contracts, above the 5 percent target. The Ombud found the tabulation does not separate out the portion of contract value performed by non-Indigenous subcontractors, so a contract can count fully toward the target even when much of the work is done by non-Indigenous firms. The review states outright that the reported figure overstates the actual benefit to Indigenous businesses, and that one department would not have met its target for 2023-24 if non-Indigenous-performed value were excluded.
- The 33 percent content rule is essentially unenforced. Across the reviewed files where subcontracting had started, the Ombud found no evidence that the departments verified during contract administration that the required 33 percent of contract value was actually performed by an Indigenous business. Indigenous Services Canada told the Ombud it does not give departments guidance on monitoring the 33 percent criterion and has no guidance documents on it, and no standard contract clauses exist to enforce it.
- There is no centralized policy. The absence of a single Indigenous procurement policy has left fragmented, inconsistent guidance across departments and no clear owner accountable for oversight.
- Indigenous suppliers have less recourse. For set-aside disputes, Indigenous suppliers currently cannot use the Canadian International Trade Tribunal or the standard Procurement Ombud complaint process that other suppliers rely on. Their only route today is Federal Court litigation.
The response: three recommendations, all accepted
Indigenous Services Canada accepted all three of the Ombud's recommendations and published a timeline. This table is the current state of the reform for 2026 and beyond.
| Recommendation | What changes | Target |
|---|---|---|
| Build a real policy | A comprehensive Indigenous Procurement Policy, developed with PSPC and First Nations, Inuit, and Metis partners, emphasizing fairness, openness, and transparency. The Ombud will report progress every six months. | Finalized winter 2026, fully implemented by April 1, 2027 |
| Fix recourse | The Procurement Ombud becomes the interim complaints mechanism for PSIB suppliers, while Indigenous Services Canada develops a permanent, potentially Indigenous-led, impartial mechanism with Indigenous partners. | Finalized winter 2027, implemented by April 2028 |
| Fix the 5 percent math | Recalculate the target so it reflects only the value of work actually paid to and documented as carried out by Indigenous businesses, not full contract value. Additional PSIB subcontracting data was committed for April 1, 2026. | Two to three years to implement fully |
What the internal audit found
Separately, Indigenous Services Canada's own internal audit of the PSIB, with fieldwork from May 2024 to February 2025 covering activity from April 2022 to March 2024, found that 68 percent of a sample of verification files had missing or incomplete Indigenous-ownership documentation. It also found no standardized eligibility-verification procedure, no formal staff training, no fraud-detection mechanism, and that post-award compliance audits were rare, with none in 2022, two in 2023, and none in 2024. Management agreed with all four of the audit's recommendations. Notably, the audit stated it never found evidence of fraud in the files it sampled, which is a distinct finding from the missing-documentation problem it did identify.
The longer horizon
A parallel, longer-term track called the Transformative Indigenous Procurement Strategy is co-developing changes with Indigenous partners. Its "what we learned" report found the current system was widely perceived as complex, colonial, and exclusionary, with strong sentiment among participants that Indigenous communities, not the federal government, should define and certify who counts as an Indigenous business. A co-development table formed in April 2024 is working toward policy recommendations for Cabinet consideration. Nothing there is decided or scheduled yet, but it signals the direction: verification and, potentially, certification moving toward Indigenous-led bodies.
PSIB and the other set-asides in Canada
PSIB, the Procurement Strategy for Indigenous Business, is the federal program that lets a department limit bidding on a contract to qualified Indigenous businesses. Created in 1996 as the Procurement Strategy for Aboriginal Business and renamed in August 2021, it carries a mandatory minimum of 5 percent of the total value of federal contracts going to Indigenous businesses, phased in from 2021 to 2024.
| Set-aside | Who it binds | Who can bid, and where |
|---|---|---|
| Federal PSIB | About 90 federal departments and agencies, not Crown corporations | Listed Indigenous businesses. Notices on CanadaBuys |
| Modern treaty obligations | Federal buyers in a treaty area | Set by each treaty. Notices on CanadaBuys |
| Ontario Indigenous Procurement Program | Ontario government buying | At least 51% Indigenous-owned. Ontario Tenders Portal |
| B.C. Indigenous Procurement Initiative | B.C. government buying | No published target; builds supplier capacity |
In French, PSIB is the Stratégie d'approvisionnement auprès des entreprises autochtones (SAEA); CanadaBuys' French pages call set-aside requirements « réservés en vertu de la SAEA ».
Small-business support is a separate track: see the small business procurement program and our guide to Canadian tender portals.
Sources: Office of the Procurement Ombud, "Procurement set-aside programs"; CanadaBuys, PSIB page in English and French; Indigenous Services Canada. Read October 22, 2026. Provincial rows: Ontario and British Columbia program pages, as listed under Sources.Partnering, subcontracting, and Indigenous Participation Plans
A non-Indigenous company cannot win a full set-aside as the prime, since only Indigenous businesses as defined under PSIB are eligible. There are still real ways to participate, and on many large procurements Indigenous partnership is a genuine competitive lever rather than a box to tick.
The 33 percent Indigenous content rule
When a non-Indigenous-led bidder proposes to subcontract work on a PSIB set-aside, it must certify in its bid that at least 33 percent of the value of the work performed under the contract will be done by an Indigenous business. That value is the total contract value minus materials the contractor buys directly. Any Indigenous subcontractor used to meet the rule must independently meet the same 51 percent ownership eligibility a prime would, and the bidder must obtain proof of that eligibility and let Canada audit those records. Failing to verify a subcontractor's eligibility is a breach of contract. As covered in the section above, the 2026 Ombud review found this rule was not being actively monitored during contract administration, so treat it as a genuine obligation to document carefully rather than something you can rely on the government to police.
Indigenous Participation Plans
Outside a full set-aside, a procurement officer can attach an Indigenous Participation Plan requiring bidders to commit to Indigenous subcontracting, employment, training, skills development, or other benefits to Indigenous businesses and peoples. Once a contract is awarded, these commitments become legally enforceable obligations and are tracked and reported. On some major procurements, participation plans have carried a meaningful share of the total evaluation score, which is why a strong, well-documented Indigenous partnership can be the difference on a competitive bid. National Defence and Defence Construction Canada, for instance, adopted participation plans as a recurring tool for infrastructure and environmental work.
Audits, and what a failed one costs
Pre-award audits are mandatory for any PSIB contract valued at $2 million or more. Before award, Indigenous Services Canada audits the two best-assessed bidders, without knowing their prices, to verify their Indigenous-business status or content claims. Below that value, a pre-award audit happens only when the department, the contracting authority or Indigenous Services Canada identifies a need. If a bidder cannot provide the required documentation, its bid may be deemed non-compliant. A failed audit or later non-compliance can mean removal from the Indigenous Business Directory, forfeiture of a bid deposit, holdback retention, disqualification from future set-asides, and contract termination with possible cost recovery. Where fraud is suspected, the matter is referred to law enforcement.
What goes into an Indigenous Participation Plan
An Indigenous Participation Plan is the part of a federal bid where you commit to benefits for Indigenous businesses and people. As of October 22, 2026, Indigenous Services Canada says a department can ask for one alongside a set-aside, on its own when limiting bidding is not practical, or to meet modern treaty obligations. After award, the plan becomes a contract obligation.
- SubcontractingReport: value paid
Name each Indigenous firm and its share of the work. Keep the invoices.
- EmploymentReport: people hired
Positions or hours on this contract, not company-wide.
- Training and skillsReport: training done
Who is trained, in what, and proof it was completed.
- Other benefitsReport: evidence
Mentoring or community benefits, each with a record.
Promise only what you can document; the rest of the bid is in our guide to writing a winning government bid. Build the plan in this order:
- What the plan must cover, and whether it is scored.
- Search the Indigenous Business Directory or a modern treaty business list.
- Get proof the partner is at least 51 percent Indigenous-owned and controlled. On a set-aside, failing to verify a subcontractor is a breach of contract.
- Dollars, positions or training seats on this contract.
- Name who reports each commitment until the contract ends.
Indigenous set-asides, answered
What is an Indigenous set-aside?
How do I qualify as an Indigenous business for federal contracts?
How do I register in the Indigenous Business Directory, and does it cost anything?
Does the government really give 5 percent of contracts to Indigenous businesses?
What is the 33 percent Indigenous content rule?
Can a non-Indigenous company bid on an Indigenous set-aside?
Can a joint venture qualify for Indigenous set-asides?
How does a PSIB set-aside appear on a tender notice?
What does PSIB stand for, and what is it called in French?
Does the contract value change anything on a set-aside?
What can I do if I think a set-aside winner is not really Indigenous?
Can a business on a modern treaty business list bid on a PSIB set-aside?
See every open Indigenous set-aside
Our live tender browser pulls federal notices from CanadaBuys and flags every set-aside as it posts. Filter, shortlist, and open the official notice in one place.
New to federal contracting? Start with how to sell to government in Canada, learn where to find government contracts, and see the difference between an RFP, an RFQ, and a standing offer. When you are ready to bid, our guide to writing a winning government bid walks through the submission. You can also check the small-business procurement programs you may qualify for, explore every Canadian tender portal, watch the Ontario tenders feed, or read the numbers on federal contracting.
Winning set-asides takes capacity, and grants can fund it
Getting listed on the directory, building bid capacity, and growing an Indigenous business all cost money before a contract pays out. Canadian funding programs can help. Explore Indigenous business grants across Canada and Indigenous grants in Ontario, or take our free quiz below to see which programs you may qualify for. You can also find grants for your business and browse the full funding catalog.
Money that pays for bid capacity
As of October 22, 2026, four national programs put money behind an Indigenous business getting contract-ready. The Aboriginal Entrepreneurship Program is the grant a business owner applies for, through a local Indigenous Financial Institution. Access to Business Opportunities funds communities and organizations. BDC and Futurpreneur lend directly.
- Aboriginal Entrepreneurship ProgramGrant: non-repayable equity up to $99,999 for an individual entrepreneur or $250,000 for a community-owned business, paired with a loan. Apply through your local Indigenous Financial Institution, not to Ottawa.
- Access to Business OpportunitiesContribution: up to $500,000 a year for national or regional projects that build Indigenous business capacity. First Nation and Inuit communities and Indigenous organizations apply. Applications close October 31, 2026; the project pitch was due October 17.
- BDC Indigenous Entrepreneur LoanLoan: up to $350,000 for First Nations, Inuit and Metis entrepreneurs. Apply to BDC directly; businesses under 12 months old are referred to start-up partners.
- Futurpreneur Indigenous Entrepreneur Startup ProgramLoan: up to $75,000 with mentoring, for founders aged 18 to 39 whose business is 24 months old or less.
These four are a start, not the whole list. Find the programs that fund bidding capacity for your business →
Source: GrantCompass program records for each program above, verified against their funders' pages. Read October 22, 2026.Sources
Facts on this page are drawn from the following official Government of Canada sources, reviewed July 2026. The directory-removals figures are from CBC News reporting, attributed as such above. Always verify current requirements and closing dates on the official notice and program pages before you act.
CanadaBuys: Procurement Strategy for Indigenous Business · CanadaBuys: Tender notices and PSIB set-asides · ISC: Facts about federal Indigenous procurement · ISC: Indigenous business and federal procurement · ISC: How to register for the Indigenous Business Directory · Indigenous Business Directory registration portal · ISC: PSIB compliance audit information · ISC: Audit of the Procurement Strategy for Indigenous Business · ISC: Learn how federal Indigenous procurement works · ISC: Transformative Indigenous Procurement Strategy, what we learned · OPO: Procurement Practice Review of contracts awarded to Indigenous businesses (March 2026) · OPO: Procurement set-aside programs · Canada.ca: Procurement Ombud news release (March 2026) · Government of Ontario: Indigenous Procurement Program · Government of British Columbia: Indigenous procurement · CBC News: Directory removals reporting