Joint Indigenous Supplier Set-Aside

When you see a federal tender restricted to Indigenous businesses and their joint ventures, you're looking at one of the most actively enforced set-aside programs in Canadian procurement. The Joint Indigenous Supplier Set-Aside ensures that certain contracts are only open to businesses that are at least 51% owned and controlled by First Nations, Inuit, or Métis peoples—or to joint ventures where an Indigenous partner performs a meaningful share of the work.

How It Works

The rules are surprisingly specific. According to Supply Manual Annex 9.4, an Indigenous business must be at least 51% owned and controlled by Indigenous peoples who are ordinarily resident in Canada. That's your baseline. But joint ventures are where things get interesting: if a non-Indigenous company partners with an eligible Indigenous business, that Indigenous partner must perform at least 33% of the total contract value. Not just participate—actually perform the work.

You'll encounter three types of set-asides. Mandatory set-asides apply when Indigenous people comprise at least 51% of the population in the area receiving the goods, services, or construction work. Voluntary set-asides happen when a contracting authority decides to restrict competition even when it's not required. Conditional set-asides start open to all bidders but convert to Indigenous-only if sufficient qualified bids are received. Each operates differently, and understanding which type you're dealing with matters for your bid strategy.

In practice, Indigenous Services Canada (ISC) runs a verification system that's more thorough than most suppliers expect. Pre-award audits confirm that 51% ownership and control threshold before any contract is signed. Post-award audits monitor ongoing compliance throughout the contract term. When you submit a bid, you're providing an attestation that you meet the Indigenous business definition on that specific date—and you're committing to maintain that status for the contract's duration. ISC maintains the Indigenous Business Directory (IBD), which is where you'll want to be listed if you're pursuing these opportunities regularly.

Key Considerations

• The 33% work requirement for joint ventures is based on total contract value, not just profit or overhead. As noted in the PSIB Compliance Audit documentation, this can include work performed by the Indigenous partner or by other Indigenous businesses that also meet the 51% threshold. Plan your work breakdown accordingly.

• Treasury Board's mandatory 5% target for Indigenous business contracts means departments are actively looking for ways to use these set-asides. The pressure to meet targets is real. This creates opportunities, but it also means scrutiny of eligibility is high.

• Control means more than just ownership percentage. You need to demonstrate that Indigenous individuals actually make strategic decisions, sign contracts, and manage operations. Passive investment structures don't qualify, and auditors know what to look for.

• The attestation you provide at bid submission isn't just paperwork. If your ownership structure changes during the contract or if ISC determines you weren't eligible in the first place, you're looking at potential contract termination and being barred from future set-aside opportunities.

Related Terms

Procurement Set-Aside, Standing Offer, Procurement Strategy for Indigenous Business (PSIB)

Sources

• Supply Manual - Annex 9.4: Requirements for the Set-aside Program for Indigenous Business

• Procurement Strategy for Indigenous Business Compliance Audit (Indigenous Services Canada)

• Procurement Set-Aside Programs - Reports and Analysis (Office of the Procurement Ombudsman)

If you're considering forming a joint venture for one of these opportunities, get your partnership structure and work allocation sorted before you bid. ISC's verification process will catch structural problems that looked fine on paper.