Canada’s defence budget has never been larger. The federal government has committed $63 billion for defence since last June — the largest year-over-year increase in generations. A further $50 billion will be allocated over the next year.
Alongside those numbers sits a policy commitment that is, on its own, unremarkable: at least five per cent of federal contracts should go to Indigenous businesses.
What is remarkable is how rarely anyone asks what that actually means.
I run LaFlesche, an advanced manufacturer on Kahnawà:ke Mohawk territory near Montreal. We are one of the few privately owned First Nations defence companies operating on-territory in this country. When I hear politicians and procurement officials talk about Indigenous business targets, I often wonder whether they are picturing a company like ours.
We have seen it enough times now that we recognize the look. A procurement official or defence contractor walks through our doors for the first time, expecting a startup operating out of a converted garage, or a cottage-industry supplier better suited to a gift-shop shelf than a defence supply chain. Then, somewhere between the reception area and the shop floor, their expression shifts. The conversation changes.
They came expecting to check a box. What they find instead is 22,000 square feet of meticulously maintained advanced-manufacturing facilities: five-axis machining centres, injection molding lines, mold-making capabilities, and a team of skilled tradespeople who hold their work to tolerances that would satisfy any aerospace or defence contract.
By the time the tour is over, the conversation is no longer about Indigenous procurement targets. It’s about capacity, lead times, and what we can build together.
We love watching this transformation. But these assumptions are costly. Not just to procurement teams. But to Canada. We are creating jobs and developing precision-manufacturing skills in our community. More than a dozen Kanien’kehá:ka interns have trained with us on the land their families have lived on for generations. This is not incidental to what we do. It is the point.
If the federal government is serious about Indigenous participation, it will have to do more than set a percentage target. The target is necessary. But procurement officials must become far more aware of what Indigenous manufacturing capacity actually looks like.
The secret to a successful defence industrial strategy is procurement reform
The missed opportunities of public procurement
Indigenizing procurement policies must move beyond token gestures
In government contracts, large companies are responsible for delivering the whole project. These prime contractors need to start seeing Indigenous suppliers as strategic partners rather than compliance tools.
Investment must also help suppliers develop. Many prime contractors, or “primes,” are genuinely willing to invest in Indigenous supplier development. The barrier is often not attitude. It’s the structure of the procurement system. Contracts are evaluated heavily on price, which matters — but optimizing for the lowest price today often means paying more later, through supply-chain fragility, foreign dependency, and lost domestic capability that takes decades to rebuild.
Contract terms are typically two to three years, shorter than the time it realistically takes to develop a manufacturer, Indigenous or not, into a trusted supply-chain partner. A prime that invests may not win the next contract and may never see the return. The system rewards winning cheaply, not building wisely.
The Industrial and Technological Benefits policy requires primes to direct a percentage of contract value toward Canadian suppliers. But those credits apply broadly, and Indigenous-specific participation is not always separately tracked, weighted, or rewarded at a level that drives meaningful change.
A longer-term view — one that scores supplier development, funds certification pathways, and ties those credits to demonstrated capacity growth — would cost Canada little and return a great deal. The suppliers are out there. The system just needs to make it worth finding them.
The problem with targets alone
Defence is not an easy sector for businesses. It has long procurement cycles. Security-clearance requirements are significant. Supply-chain relationships are built over years. An Indigenous company that does not have years of defence-sector engagement behind it will struggle to compete — regardless of what the policy says. We know from experience.
The path requires deliberate investment. LaFlesche went through the Indigenous Business Defence Sector Accelerator. We joined the Defence Indigenous Advisory Group to advise procurement policymakers directly. We sought provincial grants to cover the high costs of ISO and security certifications and built relationships with prime contractors such as ABB, MDA, and General Dynamics by attending key trade shows like CANSEC.
No policy alone makes these things happen.
What operationalization looks like
Defence spending is set to rise to five per cent of annual GDP by 2035. To lay the groundwork for meaningful Indigenous participation in Canada’s industrial defence base, three things need to change.
First, procurement officials need to develop real familiarity with Indigenous suppliers — not through a database lookup, but through direct engagement with companies before procurement processes begin. The relationships that drive supply-chain decisions are built at trade shows, in site visits, and in the kind of conversations that happen when a procurement officer understands what a manufacturer actually does.
There is a real opportunity here for government to lead — by building structured outreach into the procurement process itself rather than leaving relationship-building to industry associations and individual businesses. Getting procurement officials into Indigenous supplier facilities before a tender is issued would change what they see and what they ask for.
Second, prime contractors need to be incentivized to develop Indigenous suppliers within their supply chains. It isn’t enough to simply identify them. There is a significant difference between a prime contractor that lists an Indigenous company in its supply-chain disclosure and one that has invested in that company’s capacity to deliver.
Those that award longer or higher-value contracts or support teams at trade shows and industry days deserve to be rewarded. So do those that invest in industry certifications and equipment. The difference should be specified in the newly announced Defence Industrial Strategy, which aims to prioritize Canadian suppliers and materials. Multi-decade investments like the $60-billion Canadian Patrol Submarine Project are exactly the kind of long-horizon commitments where that approach can take root.
Third, the community dimension of Indigenous procurement needs to be part of how success is measured. LaFlesche was founded on Kahnawà:ke territory for a reason: to create jobs in the community, develop advanced skills and career paths for our youth, and to have a seat at the table of a globally respected industry.
A procurement policy that is indifferent to whether Indigenous economic activity stays in Indigenous communities is not a reconciliation policy. It is a diversity metric.
The context we carry
I want to be direct about something that does not often make it into policy papers. Kahnawà:ke was at the centre of the 1990 Oka Crisis. Our community faced the Canadian Armed Forces across a line that neither side wanted to draw. That history is not ancient. It shapes how our community relates to Canadian institutions, including the military and the procurement system that supplies it.
LaFlesche exists, in part, because some of us decided that the most powerful thing we could do was build. To create something on our territory that employs our people and contributes to a country that has not always honoured its obligations to us. Canadian institutions need to meet us partway.
At the CANSEC trade show this week, thousands of defence buyers will converge, looking to do business. That’s an opportunity. Half a trillion dollars in defence investment is an opportunity. The question is whether the procurement system will begin to interact more meaningfully with Indigenous businesses and, by extension, their communities? Or will it continue to fill a column in a compliance report?
