Aboriginal Business Set-Aside (ABSA)

An Aboriginal Business Set-Aside is a federal procurement restricted so that only eligible Aboriginal businesses may bid. Under the Government of Canada's Set-Aside Program for Aboriginal Business, a contract set aside for Aboriginal business means that only Aboriginal businesses are acceptable bidders, as described in the federal program documentation.

The term comes from the Procurement Strategy for Aboriginal Business (PSAB), which was formerly implemented through the Aboriginal Business Procurement Policy. A set-aside is different from an Indigenous participation objective or a subcontracting requirement. Those tools reward or require Indigenous involvement in a contract, while a set-aside limits who may submit a bid in the first place. The policy applied to Government of Canada departments and agencies buying goods, services and construction.

Mandatory and voluntary set-asides under PSAB

The program used two forms of set-aside. Both are described in the Treasury Board Secretariat policy text.

• Mandatory set-asides applied to procurements valued above $5,000 where Aboriginal populations were the primary recipients of the goods or services. These were to be restricted to qualified Aboriginal suppliers, subject to operational requirements, best value, prudence, probity and sound contracting management (Treasury Board Secretariat).
• Voluntary or selective set-asides applied to other procurements that a department or agency chose to restrict to Aboriginal businesses. Contracts valued below $5,000 could also be set aside where practical (Treasury Board Secretariat).

Who qualified as an Aboriginal business

Eligibility turned on ownership and control. The historical policy defined an eligible Aboriginal business as one in which Aboriginal persons held at least 51% ownership and control, according to the Treasury Board contracting policy notice.

Joint ventures could also qualify. A joint venture that combined an Aboriginal and a non-Aboriginal business was eligible if the Aboriginal business had at least 51% ownership and control of the joint venture, as set out in the same policy notice. A non-Aboriginal partner could take part, but could not hold the controlling interest.

How set-asides appeared in tender notices and contract records

A CanadaBuys tender notice for the TBIPS RFSO and RFSA shows how the designation worked in practice. The notice stated that part of the procurement could be designated by identified users as set aside under PSAB. It also made three related points:

• A PSAB set-aside could be excluded from international trade agreements under their small-business or minority-business set-aside provisions.
• The Agreement on Internal Trade did not apply, under its Article 1802.
• Bidders seeking treatment as Aboriginal businesses had to complete the Aboriginal Business certification in the Canadian Procurement Strategy for Aboriginal Business Data Collection Component.

Federal open-contracting records use the label "Aboriginal Business Set Aside – Procurement Strategy for Aboriginal Business (ABSA (PSAB))." Those records, such as this National Defence contract entry, also state that the designation was discontinued as of January 1, 2022. Older contracts in the proactive disclosure data may still carry the ABSA (PSAB) label.

What an Aboriginal Business Set-Aside means for your bid

If you see this designation in a solicitation or in historical contract data, start with the eligibility and certification clauses. Confirm that your business meets the ownership and control requirements, including the 51% threshold if you are bidding alone or as part of a joint venture. Submit the Aboriginal Business certification when the solicitation asks for it. Then comply with any Aboriginal-content, ownership, control or audit provisions the solicitation specifies.

If your business does not qualify, a set-aside contract is not open to your bid. If you are researching past awards, ABSA (PSAB) records show which federal contracts were restricted to Aboriginal businesses, which helps you see which departments used the tool and for what kinds of requirements.