Indigenous Economic Progress Report

The 2024 Indigenous Economic Progress Report is the fourth installment by the National Indigenous Economic Development Board. This report updates and assesses key economic indicators for Indigenous populations in Canada, using data from the 2021 Census and beyond. It aims to track progress, identify gaps, and inform policy decisions to foster Indigenous economic prosperity.

Since the inception of the 2012 Economic Benchmarking report, substantial progress related to Indigenous economic development has been made, however the journey towards economic parity for Indigenous Peoples in Canada continues.

The report focuses on "Core and Underlying Indicators" critical for determining Indigenous economic progress.

Core Indicators: Employment, Income, Community Well-Being.
Underlying Indicators: Education, Entrepreneurship, Governance, Lands and Resources, Infrastructure.

From 2012 to 2020, all measured economic indicators showed a growing Indigenous economy. At the national level, Indigenous gross domestic product and output as well as jobs held by Indigenous Peoples posted positive growth every year since 2012. The only exception was in 2020, mainly because of the worldwide COVID-19 pandemic. All provinces and territories also saw their main economic indicators increase during the 2012 to 2020 period. The number of Indigenous entrepreneurs is also rising, with self-employment rates increasing among First Nations, Métis, and Inuit since 2016.

Despite this growth, persistent systemic barriers and gaps remain, and efforts to promote Indigenous self-sufficiency and socioeconomic parity must be sustained. What if these gaps were closed? What if education and training opportunities were expanded? What if Indigenous workers enjoyed the same access to economic opportunities as non-Indigenous workers? Just how much more could the Indigenous labour force contribute to the Canadian economy, if gaps in average employment income and employment rate were eliminated?

To estimate this, in 2012, the value of GDP attributable to Indigenous output was estimated at $81.9 billion and by 2020, the value had grown to $97.0 billion, representing a growth of 18.5%. Every year prior to the COVID-19 pandemic, Indigenous gross domestic product experienced growth, from $41.7 billion in 2012 to $54.1 billion in 2019. This figure represents the significant contribution that Indigenous Peoples have towards the overall Canadian economy. The National Indigenous Economic Development Board remains committed to advancing economic reconciliation and recognizes that much of the economic potential of Indigenous Peoples remains unrealized.

Beyond these figures, several key themes have emerged throughout this iteration of the report:

The COVID-19 pandemic significantly impacted employment rates and labour force participation rates, and men and women experienced these effects differently.

The COVID-19 pandemic has had significant and multifaceted impacts on the economic outcomes of Indigenous Peoples. For example, Indigenous Peoples faced higher rates of job losses and unemployment during the pandemic and many Indigenous workers are employed in sectors like hospitality, retail, and tourism, which were heavily impacted by lockdowns and restrictions.

Reduced working hours and job losses led to significant income reductions for many Indigenous families, exacerbating existing economic disparities. In addition, Indigenous-owned businesses, particularly small and medium-sized enterprises, experienced closures or severe disruptions due to the pandemic. Limited access to capital and financial resources in comparison to non-Indigenous business-owners also made it difficult for these businesses to survive prolonged periods of reduced revenue.

Many Indigenous businesses also struggled to adapt to new market conditions, such as shifting to online sales or implementing health and safety protocols, due to limited digital infrastructure and resources found in remote Indigenous communities.

From a gendered perspective, in 2021, the unemployment rate for Indigenous men was 6.3 percentage points higher than for non-Indigenous men, while for Indigenous women, it was 3.8 percentage points higher than for non-Indigenous women. Since 2016, the gap has decreased: previously, it was 9.7 percentage points for men and 6.0 percentage points for women.

The experience on-reserve impacts labour force participation, and the gap between Indigenous and non-Indigenous individuals is widening at an alarming rate.

Employment rates for First Nations on reserve remain the lowest, at 19.9 percentage points lower than non-Indigenous rates, though the gap is narrowing as non-Indigenous employment rates fell during the pandemic. As of 2021, the employment rates were 50% for Indigenous populations compared to 57% for non-Indigenous populations.

Among the distinction groups, Métis historically have higher labour force participation rates than non-Indigenous people, and this gap has been further reduced. Inuit populations experienced a drop in labour force participation, widening the gap with non-Indigenous people.

In the 15 years since the 2006 Census, the labour force participation rate gap between First Nations on reserve and non-Indigenous individuals has increased by 22.8%. This is a significant increase over time and represents a concerning trend that highlights the growing disparity in economic opportunities and workforce inclusion for Indigenous communities on reserves. This widening gap underscores the urgent need for targeted interventions and policies to address the systemic barriers that continue to hinder the economic participation of First Nations people on reserves.

Despite overall income growth, significant gaps persist between Indigenous and non-Indigenous populations, particularly in rural areas.

Despite overall income growth over the years, significant gaps persist between Indigenous and non-Indigenous populations, particularly in rural areas. Métis populations continue to have the highest income levels, while First Nations on-reserve earn the lowest. As previously mentioned, the employment experience on reserve may impact income levels.

Some of the increase of income levels may be due to dependency on government transfers, which remains high, especially among First Nations on-reserve and Indigenous women.

Community well-being scores have been on the rise.

The Community Well-Being Index is a useful tool to demonstrate gaps and improvements in socio-economic status. The report identifies a need for better data collection to inform policy measures related to economic development, including an emphasis on developing culturally aligned indicators for measuring community well-being, with a focus on factors such as health, environment, language, and social connections.

There has been a long-term increase in Community Well-Being scores for First Nations, with notable improvements from 2016 to 2021. Conversely, Inuit communities have seen long-term gains but short-term declines, widening the gap in Community Well-Being scores.

High-school achievement rates are on the rise, with the exception of Inuit, and a significant gender gap persists.

Education, historically used as a tool for assimilation through residential schools, now stands as a pivotal factor for economic development and well-being. The report emphasizes the importance of education in improving employment and income levels and advocates for increased training and internship opportunities to sustain these gains.

High school completion rates have improved for all Indigenous identity groups except Inuit between 2006 and 2021. Location significantly affects educational attainment, with lower completion rates in remote areas with Indigenous women having higher completion rates than Indigenous men.

Indigenous-controlled educational programs and institutions, such as Mi’kmaw Kina’matnewey in Nova Scotia, have shown remarkable success, with high school graduation rates reaching 95%. This is evidence that incorporating Indigenous culture, language, and history into the curriculum has positively impacted students' educational achievement, identity formation, and mental health.

While no new Comprehensive Land Claims and Self-Government Agreements have been signed since the 2019 Economic Progress Report, significant progress has been made in recognizing Indigenous rights and protecting lands.

The significance of Indigenous access and management of traditional territories cannot be overstated, as it forms the bedrock of cultural identity, traditional knowledge, and ceremonial practices. The autonomy to govern their lands is crucial for Indigenous Peoples to fully benefit from economic development opportunities.

The implementation and adherence to land based agreements have deteriorated over time, with many obligations not being honored. Efforts to address historical injustices and fulfill treaty obligations have been implemented, however no new Comprehensive Land Claims and Self-Government Agreements have been signed since the 2019 Economic Progress Report. Despite this, significant progress has been made in recognizing Indigenous rights and protecting Indigenous lands. For instance, the period from 2015 to 2017 saw an average of 15 claims resolved per year, but in 2022-23, a record 56 claims were resolved, totaling $3.5 billion in compensation.

Non-Indigenous businesses dominate the Canadian economy, however Indigenous Small and Medium-Sized Enterprises outperform broader Canadian Small and Medium-Sized Enterprises in terms of sales revenue and growth.

Non-Indigenous businesses dominate the Canadian economy, comprising 98.68% of private enterprises and 97.17% of self-employed entrepreneurs. This dominance highlights the ongoing disparity, with the gap not showing signs of narrowing.

Despite these challenges, Indigenous entrepreneurs contribute approximately $48.9 billion to the Canadian economy, a figure that could increase if systemic barriers, such as limited access to federal procurement opportunities, are addressed. Analysis of Indigenous firm size reveals that most Indigenous firms have few or no employees, with a significant portion consisting of sole entrepreneurs and small firms (1-4 employees). Notably, Indigenous small and medium enterprises are outperforming the broader Canadian small and medium-sized enterprises in terms of sales and revenue growth.

Indigenous youth hold significant potential to increase economic parity.

Indigenous youth hold significant potential to address labour shortages in Canada due to their growing population. Despite this, they face considerable barriers, including higher rates of incarceration, child apprehension, and suicide compared to non-Indigenous youth. Nonetheless, there are slow improvements in employment indicators for Métis youth, nearing parity with non-Indigenous youth.

Better data collection, cultural preservation and increased support are identified as invaluable assets to economic development.

While substantial progress has been made in various areas, there is more work to be done to address barriers and achieve economic parity for Indigenous Peoples in Canada. In light of this, the report underscores the need for better data collection, cultural preservation and increased support to foster Indigenous economic parity with the rest of Canada.

The Indigenous Economic Progress Report includes 70 recommendations, and 22 strategic considerations aimed at fostering sustainable growth and prosperity within Indigenous communities. These recommendations are designed to empower Indigenous Peoples, promote self-determination, and create opportunities for economic advancement. The recommendations put forward are related to the “Core and Underlying” indicators found within the report.

Implementing the recommendations contained within the Indigenous Economic Progress Report in a collaborative and culturally sensitive manner, supports the economic empowerment and self-determination of Indigenous Peoples, paving the way for sustainable development and prosperity for generations to come.

Summary of Recommendations

Considering the extensive analysis and comprehensive review of Indigenous economic development initiatives contained within this report, a set of recommendations and considerations aimed at fostering sustainable growth and prosperity within Indigenous communities have been formulated. These recommendations are designed to empower Indigenous peoples, promote self-determination, and create opportunities for economic advancement. The recommendations are related to the “Core and Underlying” Indicators found within this report.

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