The growing contribution of Indigenous peoples to the Canadian economy

The Indigenous population is young and growing fast

The 2021 Census highlighted that the Indigenous population is the fastest-growing group in Canada. Between 2011 and 2021, Canada’s Indigenous population increased by 30%, while the non-Indigenous population grew by 9%.

The Indigenous population is also 8.2 years younger, on average, than the non-Indigenous population. Young Indigenous adults represent almost half of the Indigenous population, while young adults represent less than a third of the non-Indigenous population. Just over one in six working-age Indigenous people (17.2%) were "close to retirement" (55 to 64 years), compared with 22% of the non-Indigenous population.

Thanks to growing education levels, the number of Indigenous people aged 25-64 in full employment increased by 49% between 2014 and 2023, while employment for all other groups in the same age category grew by 13%. 
These factors are contributing to the rapid growth of the Indigenous economy. The contribution of Indigenous people to gross domestic income (GDI) has almost doubled since 2013, representing about 2.4% of Canadian GDI in 2021. The size of the Indigenous economy was larger than the combined economies of P.E.I and New Brunswick.

Figure 1: Indigenous gross domestic income in Canada

Indigenous peoples are playing a crucial role in the green transition

Canada is well-positioned to lead in the transition to a greener economy and generate immense economic impact for Indigenous peoples and other Canadians. 

Indigenous communities will play a significant role in the doubling and tripling of the clean electricity infrastructure in Canada, which is expected to cost $1.1 to $1.7 trillion over the next twenty years. 

Indigenous Clean Energy, a not-for-profit organization that advances Indigenous-led action in Canada’s clean energy transition, notes that  “as clean energy becomes an ever-bigger driver of economic development, job creation and net-zero progress, Indigenous communities – the single largest owner of clean energy assets in Canada next to private and crown utilities – are set to lead Canada’s transition.”  

Indigenous entrepreneurs are well-positioned to participate in this effort. Construction and maintenance contracts, in particular, are the two largest sectors in terms of economic activity for Indigenous people in Canada. The green transition should create many opportunities in these sectors, which could represent a significant opportunity for economic reconciliation.

Figure 2: Top five industries with GDI attributable to Indigenous people in percentage of total GDI

A large opportunity in critical minerals

Critical minerals will be essential to the green transition. Canada has abundant critical mineral reserves and is a world leader in potash, uranium and palladium production.

Canada’s Critical Mineral Strategy notes that “the development of critical mineral value chains presents a significant opportunity to grow the Indigenous economy through jobs, businesses, services, and ownership opportunities.”

Developing the currently proposed critical mineral mining projects could add an estimated $63 billion to Canada’s GDP, 95,000 jobs, and generate $12 billion in tax revenue during the development phase, according to TD Economics. Meanwhile, the First Nations Major Projects Coalition and the BC First Nations Energy & Mining Council released reports stating that there is a potential for more than $525bn in related projects involving over 155 Indigenous communities.

The number of Indigenous entrepreneurs is expected to grow by 23% in the next decade

Indigenous entrepreneurs account for less than 1% of all entrepreneurs in the U.S. and Australia. The situation is somewhat better in Canada where Indigenous entrepreneurs account for 1.9% of all entrepreneurs. 

However, they remain underrepresented. In 2023, 4.4% of Canadians aged 15 years and over were Indigenous, and their entrepreneurship rate stood at 1.1%, well below the 2.3% rate for all Canadians. The entrepreneurship rate among all Canadian men is almost twice as high as that among Indigenous men.

There is also a gender gap among Indigenous entrepreneurs. The rate of entrepreneurship amongst Indigenous men is twice that among Indigenous women. 

However, these challenges can also be seen as opportunities. The number of Indigenous entrepreneurs is expected to grow by 23% in the next decade, which is more than double the 10% increase projected for other Canadian entrepreneurs. Consequently, the share of Indigenous entrepreneurs is anticipated to steadily rise, reaching 2.2% by 2034.

Figure 3:  Forecast of the share of Indigenous entrepreneurs among all entrepreneurs in Canada

Closing the economic gap would increase GDP by 1.5%

Unfortunately, despite this large increase in entrepreneurship among Indigenous people in Canada, a large gap between Indigenous and non-Indigenous entrepreneurship rates will remain.

In 2023, the entrepreneurship rate of Indigenous Peoples was 1.2 percentage points lower than the overall entrepreneurship rate for Canadians aged 15 years and above.

Closing the gap would require doubling the current rate of Indigenous entrepreneurship, which would benefit Indigenous communities as well as the Canadian economy as a whole.

Figure 4: Entrepreneurship rate in Canada, by sex*, 2023

Increasing Indigenous entrepreneurship rates in Canada would help close the economic gap between Indigenous and non-Indigenous people. A 2016 study found that closing the gap in economic participation between Indigenous and non-Indigenous people would result in an annual increase in GDP of $27.7 billion, or a 1.5% boost.  

We all have a role in creating change

We can all take actions in our daily lives to make economic reconciliation a reality. As consumers, we can support Indigenous-owned businesses. As employers, we can strive to increase Indigenous representation in our workforce and to provide an inclusive working environment. As businesses, we can collaborate with or procure from Indigenous-owned companies. And, as allies, we can provide mentorship and partnership to Indigenous entrepreneurs in their business endeavors.  

Reconciliation is a personal journey. It requires the ability to reflect on our biases, misconceptions and the role we may play in perpetuating harm. It may be uncomfortable, and mistakes may be made. However, the important part is to learn and to take personal accountability. 

If you’d like to learn more, we’ve provided a short list of resources below that can help you get started. You can also visit your local Indigenous organization, or the National Truth and Reconciliation Commission can be a good first step to learn more.

More resources

Online

• Participate in The National Truth and Reconciliation Centre’s Lunch & Learn activities
• Take the Four Seasons of Reconciliation course
• Enroll in the University of Alberta’s Indigenous Canada course

News 

• CBC | Indigenous

Books

• Joseph, Bob. 21 Things You May Not Know about the Indian Act. Indigenous Relations Press, 2018.
• Joseph, Chief Robert. Namwayayut: A Pathway to Reconciliation. Page Two Press, 2022.
• Smith, Christy and Mchphie, Michael. Weaving Two Worlds. Page Two Press. 2022.
• Hilton, Carol Anne. Indigenomics – Taking a Seat at the Economic Table. New Society Publishers, 2021. 
• Joseph, Bob and Joseph, Cynthia F. Indigenous Relations – Insights, Tips & Suggestions to Make Reconciliations a Reality. Page Two Press, 2019.  
• Kimmerer, Robin Wall. Braiding Sweetgrass – Indigenous Wisdom, Scientific Knowledge and the Teachings of Plants. Milkweed Editions, 2015.
• Craft, Aimée and Regan, Paulette. Pathways of Reconciliation: Indigenous and Settler Approaches to Implementing the TRC’s Calls to Action. University of Manitoba Press, 2020.