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The National Aboriginal Capital Corporations Association has created a set of Indigenous Business Definitions – a national set of voluntary, consistent definitions that will help direct the procurement of goods and services to legitimate Indigenous businesses.
According to a satement released by the NACCA, the definitions “will offer clarity in a context that has long seen false claims of indigeneity, tokenism, and other modes of deception by bad actors seeking to gain an advantage in procurement processes. They will help increase access to financing for Indigenous businesses and improve Indigenous business data. And they will improve accountability and transparency surrounding procurement targets, so that all can understand whether targets are being met.”
The work to create the definitions began in 2021, when the federal government announced a government-wide procurement target of five percent for Indigenous businesses. With annual expenditures of $22 billion overall, this amounts to hundreds of millions of dollars per year in business for First Nations, Métis, and Inuit entrepreneurs.
“We welcome the five percent target,” says Shannin Metatawabin, CEO of NACCA. “But we need to ensure that the contracts are going to Indigenous entrepreneurs—enhancing the well-being of our people, their families, and their communities. This is why we’ve developed the Indigenous Business Definitions.”
Created by a coalition of Indigenous economic organizations, the definitions can be used by public and private sector actors at all levels—including provincial, territorial, and municipal governments and a Canadian business of any size that seeks to promote economic reconciliation. The enthusiasm from the coalition extends to Indigenous entrepreneurs from coast to coast to coast and stems from the necessity to ensure these contracts genuinely empower Indigenous entrepreneurs. This ‘living’ document of definitions will undergo regular updates, recognizing that when local businesses thrive, so do the people, their families, and their communities. The federal government’s five percent procurement policy, coupled with the newly launched First Nations Procurement Organization and the Indigenous Business Definitions, promises a profound impact on Indigenous businesses with rippling positive effects throughout the Canadian economy.
The definitions were developed by a working group of five national Indigenous economic organizations and three national Indigenous representative organizations. The group sought broad stakeholder input. It built consensus and a shared understanding in arriving at definitions for Indigenous sole proprietorships, corporations, non-profits, charitable organizations, cooperatives, and micro-enterprises. The definitions represent the diverse perspectives of Indigenous people and organizations from across the country and are subject to change as they are implemented and need to be responsive to the Indigenous communities served.
“We needed a clear set of criteria—developed by Indigenous people—to set out which businesses should legitimately benefit,” says Jean Vincent, chair of NACCA’s board. “Now we have those criteria.”
Although the Indigenous Business Definitions are voluntary, the NACCA hopes that they will be applied widely.
“We know that Indigenous businesses have long been eager to participate in the economic prosperity of our country,” said the statement. “Consistent national definitions will help connect legitimate Indigenous businesses to procurement opportunities, advancing one step further on the journey of economic reconciliation.”
The final definitions are:
Indigenous Sole Proprietorship
“The business is 100% owned by an Indigenous Person who has sole responsibility for making decisions, receives all profits, claims all losses, assumes all risks, pays personal income tax (where applicable) on the net income generated by the business, and does not have separate legal status from the business.”
Indigenous Corporation (For Profit)
“At least 51% of the shareholders of the corporation are Indigenous People, groups, or organizations and together have a controlling interest in the company.”
Indigenous Non-Profit or Not-for-Profit
“The composition of the board of directors is at least 51% Indigenous directors. The non-profit’s mission is focused on the betterment of Indigenous Peoples or advancement of Indigenous issues.”
Indigenous Charitable Organization
“The composition of the board of directors is at least 51% Indigenous directors. The charity’s purpose is to benefit Indigenous Peoples and communities in a way the law regards as charitable.”
Indigenous Cooperative
“Collectively, Indigenous cooperative voting members must comprise at least 51% of the cooperative’s members.”
Indigenous Micro-Enterprise
“See definitions for Indigenous sole proprietorships, partnerships or corporations.”
