Indigenous peoples’ contribution to the Canadian economy is estimated at $ 56 billion and growing. Let’s take a closer look at the progress made over the past decade and explore the potential for shared economic, social and cultural prosperity that can be unlocked.
A young and rapidly growing indigenous population
The 2021 census showed that the Indigenous population is the fastest growing group in Canada. Between 2011 and 2021, Canada’s Indigenous population grew by 30% , compared to 9% for the non-Indigenous population.
In addition, the Indigenous population was on average 8.2 years younger than the non-Indigenous population. Young adults represent almost half of the Indigenous population, while the figure is less than a third for non-Indigenous people . Among Indigenous people of working age, just over one in six (17.2%) are "nearing retirement" ( 55 to 64 years ), compared to 22% of the non-Indigenous population .
Thanks to rising education levels, the number of Indigenous people aged 25 to 64 in full employment increased by 49% between 2014 and 2023 , while employment for the same age category in all other groups increased by only 13% .
All of these factors contribute to the rapid growth of the Indigenous economy. The contribution of Indigenous people to Canada’s gross domestic income (GDI) has nearly doubled since 2013 , to approximately 2.4% in 2021. The size of the Indigenous economy was larger than those of Prince Edward Island and New Brunswick combined.
Chart 1: Gross domestic income attributable to Aboriginal people in Canada
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Source: Statistics Canada, BDC calculations, Table 36-10-0695-01
Reading grid: This graph shows that the gross domestic income attributable to the Aboriginal economy in Canada increased from $ 38 billion to $ 56 billion , which represents an increase of 58% compared to 2012 .
The crucial role of indigenous peoples in the green transition
Canada is well positioned to become a leader in the transition to a greener economy and generate enormous economic benefits for Indigenous peoples and all Canadians.
Indigenous communities will play a leading role in the expansion of Canada's electricity infrastructure, which is set to double and triple at a cost of between $ 1.1 and $1.7 trillion over the next 20 years.
According to Indigenous Clean Energy , a non-profit organization that supports Indigenous-led approaches to Canada's energy transition, "as clean energy becomes an increasingly powerful driver of economic development, job creation and the move to net-zero emissions, Indigenous communities are poised to lead the transition in Canada, as they are the largest owner of clean energy assets in the country after privately held and Crown utility corporations."
Indigenous entrepreneurs are well positioned to participate in this effort. The construction and maintenance contracting sectors, in particular, are the two largest sources of economic activity for Indigenous people in Canada. The green transition is expected to create many opportunities for these sectors, which would represent a major step rcs database forward towards economic reconciliation.
Chart 2: Top five sectors with Indigenous-led GNI, as a percentage of total GNI
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Source: Statistics Canada, BDC calculations, Table 36-10-0695-01
Reading grid: This graph shows that the five main sectors of the Aboriginal economy are real estate and rental and leasing services, construction, manufacturing, retail trade and mining, quarrying, and oil and gas extraction.
Critical Minerals: A Major Opportunity to Seize
Critical minerals will be essential to the green transition. Canada has abundant reserves of critical minerals and is a world leader in the production of potash, uranium and palladium.
Canada's Critical Minerals Strategy states that "developing critical minerals value chains provides a significant opportunity to grow the Indigenous economy through jobs, businesses, services and equity investment."
If completed, proposed critical mineral mining projects could add an estimated $ 63 billion to Canada’s GDP, create 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 have released reports indicating that related projects involving more than 155 Indigenous communities represent more than $ 525 billion in potential revenue.
Aboriginal share of entrepreneurship to increase by 23% over the next decade
Less than 1% of entrepreneurs in the United States and Australia are Indigenous. In Canada, the situation is a little more positive, with Indigenous people representing 1.9% of the total entrepreneurial pool.
Despite this, they remain underrepresented . In 2023 , 4.4% of people aged 15 and over in Canada were Indigenous, and their entrepreneurship rate was 1.1% , well below the rate of 2.3% for the Canadian population as a whole. The entrepreneurship rate is almost twice as high for all Canadian men as for Indigenous men.
There is also a gender gap in Indigenous entrepreneurship. The rate of entrepreneurship among Indigenous men is twice that of Indigenous women.
However, these challenges can also be seen as opportunities. The number of Indigenous entrepreneurs is expected to increase by 23% over the next decade, twice the 10% increase projected for Canadian entrepreneurship. The share of Indigenous people in Canadian entrepreneurship is therefore expected to grow steadily, reaching 2.2% by 2034 .
Figure 3: Projection of the share of Aboriginal people in entrepreneurship in Canada
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Source: Statistics Canada, BDC forecasts using Statistics Canada population projections (reference scenario) and adjusted entrepreneurship rates observed in 2023. For this projection, entrepreneurship rates were recalculated for the segment of the population aged 15 to 74.
Reading grid: This graph shows that the share of Indigenous people in entrepreneurship in Canada is expected to increase from 1.94% in 2023 to 2.17% in 2034 .
Closing the economic gap would increase GDP by 1.5%
Despite this strong increase in entrepreneurship among Canada's Indigenous population, there will continue to be a significant gap between Indigenous and non-Indigenous entrepreneurship rates.
In 2023 , the entrepreneurship rate for Indigenous people was 1.2 percentage points lower than the general entrepreneurship rate for Canadians aged 15 and over.
