Running an Indigenous-Owned Trade Business

If you run a trade business that is at least 51 percent owned and controlled by First Nations, Inuit or Metis people, you can access a stream of federal contracts that is reserved for Indigenous businesses, and in the territories there are further preferences layered on top. The single most important practical step is getting listed on the Indigenous Business Directory, because that listing is the key to the federal set-aside work. This guide is about the business-owner side: getting listed, understanding the 5 percent target as a floor, the subcontracting rule, and the territorial preferences that can favour your bids. The worker-pathway side, including training and wellbeing support, is covered in the Indigenous tradespeople guide on this site.‍‌​‌​‌​‌‌​‌‌​‌‌‌​‌​​​​‌​​‌‌​​‌‌‍

The federal 5 percent target, told straight

The federal government has set a target that a minimum 5 percent of the total value of its annual contracts goes to qualified Indigenous businesses, delivered through the Procurement Strategy for Indigenous Business. The honest framing matters here: this is a minimum target across the whole federal contracting program, not a guarantee that any single tender will go your way, and not a quota you personally are owed. Treat it as the reason the set-aside doors exist, not as a number to bank on.

The program is also under active reform. A review found the reported figures overstate the real economic benefit reaching Indigenous businesses, and a new Indigenous procurement policy is being developed, with broader implementation targeted for 2027. So confirm the live rules with Indigenous Services Canada before you build a plan around them.

Getting listed on the Indigenous Business Directory

To bid on the work reserved under the strategy, your business must appear on the Indigenous Business Directory, held by Indigenous Services Canada. The core requirements are straightforward in principle:

• The business is at least 51 percent owned and controlled by First Nations, Inuit or Metis persons ordinarily resident in Canada.
• For a joint venture, the Indigenous partner or partners hold at least 51 percent ownership and control.
• You can provide evidence of Indigenous identity, for example registration, citizenship or recognized membership.

Treat the listing as something you keep current, not a one-time stamp. Indigenous Services Canada has run integrity audits and removed businesses whose ownership and control did not hold up in substance. Before you rely on a joint venture or a subcontracting arrangement to claim eligibility, make sure it genuinely meets the ownership and control tests, not just the paperwork. Confirm the current renewal cycle and requirements directly with Indigenous Services Canada.

How a set-aside reaches your business

There are two ways the strategy reserves work, and knowing which is which helps you read a tender.

• Mandatory set-aside: a procurement is reserved for Indigenous businesses when the main recipient or end user is a population that is at least 51 percent Indigenous, the value clears a low minimum, and there is capacity to do the work. There is no upper dollar limit, because these sit outside the international trade-agreement rules.
• Conditional set-aside: the tender is open to everyone, but if two or more eligible Indigenous businesses bid, it converts to an Indigenous-only competition.

So read every relevant federal tender for set-aside conditions; they change who you are actually competing against.

The subcontracting floor

If your Indigenous business wins a set-aside contract and subcontracts part of it, at least 33 percent of the value of the work performed, not counting direct materials, must be carried out by Indigenous businesses. Up to two-thirds can go to non-Indigenous subcontractors, but no more. That 33 percent is a minimum, not a free pass, and the directory is applying closer scrutiny to whether the Indigenous benefit is genuine. Build your team with that floor in mind from the start.

Territorial preferences: Nunavut Article 24 and northern hire

In the territories there are further preferences on government-funded work, separate from the federal directory. The most established is in Nunavut: under the Nunavut Land Claims Agreement, Article 24 gives Inuit firms a contracting preference on Government of Nunavut funded projects. Across the territories, government capital works often carry Northern Hire requirements, Inuit Firm Priority provisions, or local-content clauses that can require evidence of local hiring or subcontracting to locally owned or Inuit-owned businesses. If you are an Indigenous-owned business in or near the North, these can materially favour your bids, but the exact rules sit in the tender documents and the relevant agreement. Read them, and confirm how a given preference applies with the project owner.

Common mistakes

• Banking on the 5 percent. It is a minimum federal target, not a contract owed to you. Use it as the reason to get listed, then win work on the merits.
• Treating the directory listing as permanent. It can be removed if ownership and control do not hold up under audit. Keep your evidence current and real.
• Constructing a joint venture on paper only. A 51 percent arrangement that does not genuinely meet ownership and control will not survive scrutiny.
• Missing the territorial preferences. Article 24 in Nunavut and northern-hire clauses elsewhere can favour you, but only if you read the tender and the agreement and respond to them.

How this site is funded →

Spotted something wrong or out of date? Email us at hello@kilnguides.co.uk.

In crisis? 988 Suicide Crisis Helpline (call or text 988) · Mental health support

How this site is funded →