Canada's federal government has removed nearly 1,900 companies from its official list of accredited Indigenous suppliers after complaints businesses falsely claimed Indigenous ownership to secure millions in federal contracts.

According to a House of Commons inquiry response from Canada's Indigenous Services Minister Mandy Gull-Masty's department, 1,881 contractors were removed from the Indigenous Business Directory, which had previously listed 2,925 verified suppliers.

"The list represents a snapshot in time and should not be relied upon to determine current eligibility," the department said in its response, adding that companies can be delisted for failing to meet program requirements, Western Standard reports.

Blacklock's Reporter says the removals followed reviews for ineligibility, non-responsiveness, or at the request of the businesses themselves.

The figures were disclosed after Conservative MP Billy Morin of Edmonton Northwest asked how many firms had been removed from the directory used by Canada's federal procurement strategy for Indigenous business. Of the total removals, 635 occurred in 2025.

Businesses listed in the directory receive preferential access to five per cent of federal contracts reserved for firms owned by Indigenous shareholders. The companies later removed from the list had collectively been awarded $38,731,919 in government contracts (more than 40,320,000 Australian dollars).

The department confirmed one supplier was referred to police on suspicion of faking an Indian Status card, though the company was not identified.

Concerns about abuse of the system have been raised repeatedly in Parliament, Western Standard reports.

Assembly of First Nations director Joanna Bernard told a Commons government operations committee in 2024 that the program was vulnerable to exploitation. She warned that in some cases "token Indians" were paid small sums simply to lend their name to shell companies.

A 2025 departmental audit appeared to confirm widespread problems, finding two-thirds of suppliers claiming Indigenous ownership could not properly verify those claims

The Audit of the Procurement Strategy for Indigenous Businesses cited gaps in staff training, weak oversight of third-party verification, and inconsistent checks of contractors' claims of membership in Indigenous organisations, concluding there were "several opportunities for improvement" in the program's administration.