The accountability data Ottawa doesn’t headline

Canada News Media Insights Brief | September 29, 2026

This cycle we set two federal documents side by side: Ottawa’s own report card on its Indigenous procurement target, and the Procurement Ombud’s audit of how those contracts are actually awarded. Read together, they show that the headline success figure depends heavily on what is left out of the math. The ombud also promised progress checks every six months, and the first one is now due.

The federal government says it beat its target. In its Report on the Mandatory Minimum 5% Target for fiscal 2023-24, Indigenous Services Canada (ISC) reports that Ottawa awarded $35.02 billion in contracts that year, and that $1.24 billion of it, or 6.11 per cent “of all eligible contracts,” went to Indigenous businesses. The target, phased in since 2022, requires federal organizations to award at least five per cent of the value of their contracts to businesses owned and controlled by First Nations, Inuit or Métis people.

The word “eligible” carries most of the weight. According to the same ISC report, deputy head-approved exceptions, which remove contracts from the calculation, nearly doubled in 2023-24, from $7.5 billion to $14.7 billion. ISC reports that the Department of National Defence accounted for 87.7 per cent of the value of those exceptions, spread across just 59 contracts. Taking the $14.7 billion out of the $35.02 billion total leaves roughly $20.3 billion, and $1.24 billion is about 6.1 per cent of that. Measured against the full $35.02 billion, by Canada News Media’s calculation from ISC’s published figures, the Indigenous share is closer to 3.5 per cent. ISC’s report also notes that the dollar value going to Indigenous businesses fell by nearly $400 million from the $1.63 billion recorded in 2022-23.

The numerator has its own problem, according to the Office of the Procurement Ombud. In its Procurement Practice Review of Contracts Awarded to Indigenous Businesses, published in March 2026, the ombud found that the formula counts the full value of every qualifying contract. Under the Procurement Strategy for Indigenous Business (PSIB), only 33 per cent of a set-aside contract’s value must be performed by Indigenous firms, meaning up to 67 per cent can go to non-Indigenous subcontractors and still be counted. For contracts awarded to Indigenous businesses outside the set-aside program, the ombud found “there is nothing preventing 100% of the work from being subcontracted to non-Indigenous businesses.” The ombud’s report calls the $1.24 billion figure misleading and says it “overstates the actual benefit to Indigenous businesses.”

The file review behind that conclusion is specific. The ombud examined 27 set-aside contracts awarded by Shared Services Canada, Employment and Social Development Canada (ESDC) and Correctional Service Canada (CSC), including four contracted through Public Services and Procurement Canada (PSPC), between April 2023 and March 2025. In 20 of the 27 files, the ombud found no evidence that the contracting authority checked the Indigenous Business Directory before award. ISC confirmed to the ombud that three of the 27 winning suppliers were not on the directory when they won and were still not listed when the report was written. In 13 procurement processes that produced 16 contracts, the ombud reports, winning suppliers were never asked to certify that they were Indigenous businesses.

Audit controls fared no better. ISC requires a pre-award audit for set-aside contracts worth $2 million or more. According to the ombud, 13 of the sampled contracts crossed that line, and nine of those files showed no evidence that ISC was ever notified. CSC told the ombud it was not aware of the requirement. In one Shared Services procurement, the report says, the department emailed ISC three times over two months, got no reply, and awarded the contracts anyway. None of the 23 contracts where work had begun showed any check that the 33 per cent Indigenous content rule was being met, and the three departments confirmed they had never requested a post-award audit during the review period.

The reporting gap also shows up in a single department’s results. The ombud found that CSC reported three contracts to ISC as PSIB awards even though the suppliers were not on the directory. Excluding contracts in the ombud’s sample that went to unlisted suppliers, the report concludes, CSC would not have met its five per cent target for 2023-24.

What happens next is on the public record. In its formal response, ISC agreed to write a comprehensive Indigenous procurement policy, with Cabinet approval targeted for winter 2026 and implementation by April 1, 2027. It committed to an Indigenous-led complaints mechanism by April 2028. PSPC declined the ombud’s recommendation that it establish the ombud’s office as an interim complaints body, arguing that ISC should lead. On the formula itself, ISC agreed only to a feasibility assessment in fall 2026, and said any fix could take two to three years.

The ombud committed to review and publicly report on progress every six months. Counting from the March 2026 report, the first of those updates falls this autumn. It is the document to watch: it will show whether ISC’s fall 2026 feasibility work on the formula has started and whether federal departments have been engaged on the policy, as ISC’s timeline promised.

Sources: Office of the Procurement Ombud, Procurement Practice Review of Contracts Awarded to Indigenous Businesses (March 2026), opo-boa.gc.ca; Indigenous Services Canada, Report on the Mandatory Minimum 5% Target, Fiscal Year 2023-24, sac-isc.gc.ca. The 3.5 per cent figure is Canada News Media’s calculation from ISC’s published totals.