Executive summary

Assessment

Geography is important to understanding Canada’s Indigenous economy and better data is needed to inform policy decision-making. The Indigenous population is distributed unevenly across Canada, ranging from as little as 2% of the population on Prince Edward Island (2 730 persons) to as much as 86% in Nunavut (30 545 persons) in 2016. The Indigenous population is more likely to be located in predominantly rural regions. Approximately 60% of Canada’s Indigenous population live in rural regions, compared to 27% for the non-Indigenous population. Although the well-being of the Indigenous population is improving, significant gaps compared to the non-Indigenous population remain, and these gaps are larger in rural than in urban areas. For example, the gap in the unemployment rate is 10 percentage points in rural remote areas, compared to 5 percentage points in urban areas. Indigenous communities in rural remote areas face a range of challenges associated with educational attainment, housing, water and sanitation, and digital connectivity. Although there have been significant advances in statistical frameworks to measure these issues, there is a need to improve business and economic data, and include Indigenous communities and institutions in decision-making about ongoing data collection efforts.

Enhancements in processes to secure land tenure and tools to mobilise its development potential will create new economic opportunities for Canada’s Indigenous people. Secure rights to land can increase autonomy, generate revenues and create economic opportunities. These rights are derived from an attachment to land that encompasses material and cultural reproduction that preceded European settlement. Understood in these terms, Indigenous rights to land are communal and indivisible. Specific procedures have been established for Indigenous groups to secure land rights that can be improved by measures such as reducing financial risks and better mechanisms to monitor implementation. The collective nature of Indigenous property rights can create barriers to the use and development of land. The default position in the Indian Act is that the government is in charge of land and resource administration on reserve land. Over time, mechanisms have been introduced to increase Indigenous control over land use planning, land leasing, and harmonising regulatory frameworks with Provinces. Improvements can be realised in the use of these mechanisms through more targeted financial and technical support, better data about land and resource use, and consultation protocols at the sub-national level. The use of traditional lands extends to how natural resource projects (mining and energy), which includes how to operationalise the principle of Free Prior and Informed Consent (FPIC), and guidance to support benefit-sharing agreements.

Enhancing policies and institutions to facilitate access to finance, business expertise and public procurement markets will enable further growth in the Canadian business sector. Indigenous entrepreneurship occurs in an institutional context that emphasises the importance of kinship relations, the reproduction of traditional knowledge and culture, and linking businesses to community economic development. Indigenous entrepreneurs have a higher presence in the primary sector (food and agriculture, forestry, and mining), construction and other non-traded services, and lower presence in higher value business services (e.g. finance and insurance, scientific and technical services). Rates of entrepreneurship are also lower than among the non-Indigenous population. These outcomes reflect the higher proportion of Indigenous peoples living in rural areas, and barriers to business growth such as the indivisible nature of Indigenous lands, discrimination and poor credit histories. The Canadian Government has supported the establishment of Aboriginal Financial Institutions (AFIs), specific loan instruments and business support programs, as well as preferential procurement policies to improve the environment for Indigenous entrepreneurship. However, more can be done to help these institutions to attract private capital, deliver better entrepreneurship training and support services, and to reduce entry barriers for small firms to the public procurement market.

Implementation arrangements that better adapt policies to places and empower Indigenous communities as partners in economic development, are needed. Historically in Canada, Indigenous policies were government-led, directed at Indigenous peoples, and did not support self-determination. In recent decades, there has been progress in shifting toward a partnership approach that empowers Indigenous peoples. Further efforts are needed, however, to implement policies in a way that is tailored to different places, empowers Indigenous communities to deliver on their objectives for development, and contributes to stronger regional economies. A place-based approach to Indigenous economic development succeeds where there is a strong vision for community economic development with mechanisms to prioritise and sequence investment in framework conditions - from infrastructure and services to skills development, mentorship and access to finance. A national policy framework for Indigenous economic development and effective multi-level governance is central to operationalising this approach. This includes enhancing coordination across levels of government to deliver shared outcomes with Indigenous communities, and improving engagement and consultation practices.

Recommendations

1. 1. Indigenous Canada – trends and data needs

   • Improve the quality of data about Indigenous businesses and entrepreneurship by agreeing to a common definition, and establishing a common registry.

   • Improve Indigenous community well-being data by expanding the range of indicators available and developing user-friendly data portals designed for local decision makers.

   • Strengthen engagement with Indigenous organisations regarding data collection by establishing more formalised governance arrangements for the inclusion of Indigenous peoples and organisations in the work of Statistics Canada.

2. 2. The importance of land for Indigenous economic development

   • Improve the framework for Indigenous peoples to secure land through the comprehensive land claims policy by supporting Indigenous groups with the capacity to effectively undertake negotiations.

   • Develop better procedures for First Nations to increase existing reserve land through the Treaty Land Entitlements and State-assisted land acquisitions process including by assisting First Nations to resolve third party disputes, and establishing a shared national/provincial programme of land purchase.

   • Develop better tools for Indigenous groups to use land by providing templates for land code and associated regulations, and by ensuring there are mechanisms in place to have meaningful consultation with regards to land use planning of municipal and other authorities on adjacent lands.

   • Strengthen the negotiating power of Indigenous groups in the context of impact-benefit agreements (IBA), including by elaborating a common set of tools and templates that Indigenous groups can draw upon to start negotiations.

3. 3. Enabling Indigenous entrepreneurship and community economic development

   • Strengthen support to the AFI sector by incentivising private investment and facilitating collaboration to scale up projects.

   • Strengthen the Federal Governments Procurement Strategy for Aboriginal Business by requiring large scale contractors to advertise subcontracting opportunities on the government’s procurement website, and establishing binding procurement targets and set asides.

   • Enhance the role of Canada’s Regional Development Agencies (RDAs) by ensuring staff have regionally specific cultural competency training, there is recruitment and mentoring of Indigenous staff, and that opportunities are created to link Indigenous entrepreneurs with the local business environment.

4. 4. Improving governance and policies for place-based Indigenous economic development

   • Consider the development of a national Indigenous economic development strategy that can support alignment of policy objectives and responsibilities across different levels of government, and define short, medium- and long-term measurable outcomes.

   • Improve coordination across levels of government to implement a place-based approach to Indigenous economic development including by strengthening engagement with provinces to coordinate investments and realise economies of scale in the provision of infrastructure and services.

   • Improve engagement practices with Indigenous communities across all levels of government including by establishing a cooperation regarding the Duty to Consult Memorandum of Understandings with all provinces and territories.

   • Strengthen capacities by supporting the implementation of the Indigenous Community Development National Strategy that delivers appropriate support for community planning, and strengthening incentives for collaboration between First Nation communities and between municipalities/provinces.