Aboriginal People, Economic Conditions

Historically, Aboriginal economies were based primarily on sharing (a familistic, egalitarian pooling of resources) in the 26 simple or Band-level societies to the north; on reciprocity (a calculated, give-and-take exchange) in the 17 intermediate or "tribal"-level societies to the south; and on redistribution (a centralized and politically organized administration of the economy) in all 11 developed chiefdoms of the Northwest Coast. These highly ranked Pacific Coast societies did buy and sell slaves, who made up about 10% of the population. No First Nations societies had conventional money, or any medium of exchange with high "liquidity," by which one thing such as coins could buy a wide variety of goods and services. There were no true markets where prices were primarily set by the supply and demand of goods. There was no such thing as employment for wages. During the Fur Trade period, however, the elements of a barter/wage economy infiltrated many Aboriginal communities.

Labour Force Participation

In 1981 only about 38% of status Indians over 15 years of age were "employed," in the sense of working for a monetary income, compared to 60% of the general population over 15. The 1991 labour force participation rate of registered Indians aged 15 years and older living on reserves was only 47%, compared to 68% of the general population over 15, according to the 1996 Aboriginal Affairs and Northern Development (AAND) (formerly Indian and Northern Affairs Canada, or INAC) departmental data. The 1991 Aboriginal People's Survey reported that among the 388 900 adults surveyed aged 15 and older, only 43% were working for a monetary income, compared to 61% of the total Canadian population over 15. Two decades later, the labour force participation rate for the Aboriginal population was 59% compared to 65% for the general population. In general, the unemployment rate for Aboriginal people was more than double that of the population as a whole.

Lower levels of participation in the labour force partially reflect structural constraints. Some Aboriginal people who participate in their Aboriginal economic heritage experience problems integrating with the general Canadian economy. Three factors have been particularly important in modern Aboriginal economies: the specific evolutionary heritage of each of the traditional societies; the extent to which individuals were drawn into the money, market and wage economy; and the federal government's role in the support and administration of the economies of the Aboriginal communities.

In general, the more socially and politically complex Aboriginal societies adapted most successfully, at time of contact, with the non-Aboriginal economy, and this holds true of their participation in the modern economy. Aboriginal people with a heritage that goes back to the chiefdoms of BC or to the southern Nations such as the Blackfoot, Mohawk or Huron, have higher incomes than the Inuit, Dene and northern Algonquin peoples with a band heritage. Historical differences in participation in the modern economy have shown up in the same societies; the Cree and Ojibwa, eg, who moved onto the prairies with the fur trade, made economic advances over those who remained in their homelands in northern Québec and Ontario. This economic boom made Cree and Ojibwa the largest and second-largest Aboriginal societies in Canada respectively.

Within the Aboriginal population, labour force statistics consistently indicate a higher level of dependency and a level of wage employment that is approximately half that of the national average. A significant number of Aboriginal people continue to harvest fish and game for subsistence purposes in the traditional style. Aboriginal people are strongly represented in outdoor and seasonal work, though these occupations typically pay less than indoor and year-round work in professional, technical, managerial, clerical, sales and service occupations.

The median reported income of the Aboriginal population is approximately 30% lower than that of the non-Aboriginal population.

Government Funding

After the Second World War, and especially in the 1960s, the federal government began to play a more active role in the delivery of social, educational and economic development services to Aboriginal communities (see Aboriginal People, Government Programs). From the early 1980s to mid 1990s, federal expenditures directed toward Aboriginal peoples more than tripled, growing from $1.4 billion in 1980-81 to $5.6 billion in 1995-96. The federal government's mandate requires that funding is provided for the 615 bands, registered Indians living on Reserves and the Inuit.

In 2005, the First Nations Implementation Plan was established to close the gap in the quality of life that exists between Aboriginal peoples and other Canadians. The goal of the 10-year plan is to ensure that all Aboriginal people benefit from, and contribute to, Canada's prosperity. Over 60% of AAND spending is committed to basic services including education, social services and community infrastructure. The federal government forecast in 2011 was $7.3 billion to AAND for budgetary expenditures.

Economic Participation

There are 615 First Nations communities comprising 50 nations or cultural groups. Social indicators such as life expectancy, disability and death rates show that Aboriginal people generally face worse living conditions than other Canadians (see Aboriginal People, Social Conditions). Historically, First Nations and Inuit communities did not control their own economic and social development destinies. The Canadian government now believes that Aboriginal peoples have the inherent right to Self-Government.

In 1989 the Canadian Aboriginal Economic Development Strategy (CAEDS) was designed to provide long-term employment and business opportunities for First Nations and Inuit communities and to assist communities to manage resource development, Aboriginal business activity and community economic planning. The CAEDS focused on economic activity: labour market development, business development and community development. In 1990, the National Aboriginal Economic Development Board (NAEDB) was established to provide advice to government on strategies and programs to promote economic development for Canada's Aboriginal people. The NAEDB is the only national, non-political organization that advises and promotes Aboriginal business in Canada.


Aboriginal communities have historically endured seriously inadequate housing conditions. In the 1960s less than half of on-reserve houses had electricity and few had piped water or sewage systems. By 1996, the AAND report indicated that approximately 90% of Aboriginal residences had sewage disposal systems and about 96% had water delivery systems. Electricity had also been installed to nearly 100% of the communities.

The federal government is responsible for assisting First Nations to supply the potable water infrastructure on reserves, and homes are now built to national building code standards. The 2006 Census indicated that one in five Aboriginal people were in need of core housing compared to 12.4% of other Canadians and that approximately one quarter of all Aboriginal people on reserves live in crowded dwellings (more than one person per room). Since 1998-99 the proportion of on-reserve dwellings with water delivery has remained constant at 98% and by 2004 the proportion of on-reserve dwellings with sewage disposal had reached 96% of all dwellings.

Land and Economy

The land base of the 2675 Aboriginal reserves and settlements tends to be quite small: the average size of a Canadian Aboriginal reserve is just over 1000 ha. By 1998, 12 comprehensive Land Claim settlements were reached. In 1993, the Nunavut Land Claims Agreement became the largest Aboriginal land claim settlement in Canadian history. Most of the land is suitable only for primary production such as fishing and forestry. About 20% of First Nations land has good agricultural potential, but this land is located largely in southern Canada where Aboriginal people already have access to other forms of employment. Furthermore, in the fiscal year of 2003-04, AAND administered land transactions for over 2700 reserves, which represented over 3.1 million hectares of land.

Education and Economic Conditions

The lower incomes and higher levels of poverty and unemployment among Aboriginal people are the result of both structural constraints and individual attributes. Cultural heritage, occupational constraints, lower levels of education, communities far from the main centres of the economy and racial discrimination all play a role in the socioeconomic conditions of Aboriginal people. Almost all Aboriginal people complete elementary school, most have secondary education and a small but growing percentage complete college or university (see Aboriginal People, Education). Although the formal education of Aboriginal adults is below the national average, the gap is closing with non-Aboriginal rural students spending roughly the same number of years in school.

Elementary and secondary education are provided by public schools, band-operated schools or schools under provisional education authorities. First Nations band councils administer all or parts of their educational programs. By using community resources such as including the participation of Aboriginal elders and teaching traditional skills, the special needs of Aboriginal children are met. There has also been a considerable and steady increase in enrolment attendance and retention rates in band-operated schools. According to the 2004 AAND Basic Departmental Data report, the percentage of students enrolled in First Nations-managed and federal schools was 14% higher than it was in 1995-96. Approximately 60% of Aboriginal students who live on reserves and are enrolled in kindergarten, elementary, and secondary schools are enrolled in First Nations-managed schools, compared to 40% who are enrolled in provincial/private schools.

The number of AAND-funded registered Aboriginal people and Inuit attending post-secondary increased from 3599 in 1977-78 to 27 000 in 1995-96; however the core funding of the Post-Secondary Student Support Program (PSSSP) that provides support to status Indians and Inuit has essentially remained constant since 1994, with variable distribution in regions across the country. The number of Aboriginal college students was approaching parity with the total population by 2001 (25% compared to 28%) but participation declined until 2004. At that time, 60% of Aboriginal post-secondary students completed a non-university certificate while 38% received an undergraduate or graduate degree.

Employment rates increase with higher levels of education; census figures reveal that the employment rates for Aboriginal and non-Aboriginal bachelor's graduates are almost identical. Over the last decade, the number of Aboriginal post-secondary students has been growing at roughly the same rate as the overall student population, and Aboriginal students represent approximately 3% of all Canadian undergraduates. In 2006, 7.7% of Aboriginal people had earned a university degree, compared to 23.4% of the general population.

Aboriginal Enterprises

Indications of a prosperous future are seen in several current First Nations enterprises. Aboriginal people are involved in all business sectors including manufacturing, forestry, knowledge-based services, fine art, traditional crafts, high fashion, tourism and software development. Aboriginal entrepreneurs exist in all industries including construction, primary sectors such as agriculture, forestry, fishing and hunting, mining, and oil and gas, and service sectors such as education, scientific and technical services, and health and social services.

From 2001 to 2006 there was a 38% increase of self-employed Aboriginal people in Canada, which was five times that of self-employed Canadians overall. The Aboriginal Business Survey conducted in 2010 found that more than half of Aboriginal businesses reported profits for 2010 and more than a third increased their revenues from 2009-10.

Economic Programs

Aboriginal financial institutions in the 1980s and 1990s were established to provide lending services to Aboriginal clients in remote, rural, and urban areas who would generally have difficulty accessing funding through conventional financial institutions due to the high-risk nature of these loans. In 1984, the Canadian Council for Aboriginal Business (CCAB), a national nonprofit organization, supported Aboriginal business development and provided mentorship in addition to business funding. Aboriginal Business Canada is a program for status or non-status Indians (on or off-reserve), Métis or Inuit entrepreneurs. Originally offered by Industry Canada to provide financing to Aboriginal businesses to promote the growth of commerce as a means of economic self-sufficiency, the program was transferred to AAND in 2006. The vast majority of Aboriginal Business Canada support is non-repayable contributions to small and medium-sized businesses.

In 1996, the National Aboriginal Capital Corporation Association (NACCA) was created by a collective group of Aboriginal financial institutions to develop financial products and services for its Aboriginal network. Community Economic Development Organizations, managed by First Nations communities, also provide various economic development incentives through business, employment and resource development initiatives.

First Nations own or control over 15 million hectares of land and Inuit own or control over 45 million hectares of land.

Métis Economy

Generally, Métis live in the same regions as Aboriginal people, with a greater tendency for urbanization. Some Métis communities in Alberta live on provincially established settlements and are involved in fishing, farming and logging. In some provinces the Métis have separate rights and regulations from other Aboriginal people. Alberta and the Northwest Territories, for example, permit general subsistence fishing for Métis, and Ontario and New Brunswick have special Métis provisions for certain fishing areas.

The 1991 Aboriginal People's Survey found that the unemployment rate for adult Métis was around 22%. Among those who were employed, 26% reported employment income between $20,000 and $39,000, 7% lower than the total Canadian population over the age of 15. By comparison, the 2001 Census reported that the average income for the Métis community was $34,778, which was 14% higher than the general Aboriginal population ($33,416) but still significantly (20%) below the average income for the non-Aboriginal population ($43,486). The Métis labour force participation rate was 69.1% in 2001 compared to 66.5% for the general population and 61.4% for the overall Aboriginal population. Although there have been improvements over the last 20 years, the Métis labour force participation rate is now approximately 70% while the unemployment rate is roughly 12% and the average income for the Métis is approximately $5000 less than for the non-Aboriginal population.

Inuit Economy

In 1984, the federal government and the Inuvialuit signed the first land claim settlement in Canada's three northern territories, the Inuvialuit Final Agreement, as part of the Western Arctic Claims Settlement Act. In addition to control of their land, the Inuvialuit have subsurface rights to oil, gas and minerals, and the right to hunt and harvest anywhere in the claim area. The Inuvialuit Regional Corporation (IRC) and its subsidiaries, including the Inuvialuit Development Corporation, were established to administer the rights and benefits in the agreement.

In the Western Arctic, Inuit participate in the oil and gas industry and related enterprises, mining and resource development. Hunting, fishing and trapping still provide many Inuit with their nutritional food and supplement many incomes. In recent years, the Inuit's economic base has become far more diversified, with an increase in tourism and in the demand for cultural development such as Inuit carvings and prints, which are generally sold through Inuit Co-operatives. These provide a steady source of income to numerous communities.

Nunavut's population is more than 85% Inuit, and more than half of Canada's northern population are Aboriginal. Canadian Northern Economic Development Agency (CanNor) was established in 2009 and part of its mandate is to increase the number of northern and Aboriginal businesses and increase access to funds for entrepreneurs. Development of oil and gas and mining in Canada's north is expected to exceed $24 billion over the next decade and will impact Aboriginal communities, and national and regional economies.