Addressing Indigenous Inequities Could Boost Economy by 0.5%: RBC Report

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Inequities related to housing, wages and education are hampering the economic participation of Indigenous Peoples in Canada, and a new report from RBC Economics says closing those gaps could boost Canada’s economy as a whole.

RBC’s report, released Wednesday, looked at gaps in key housing, education and internet infrastructure that it said is holding back Indigenous Peoples’ participation in the economy. The report pegged the overall infrastructure gap as totalling $350 billion, citing figures from the Assembly of First Nations. 

For the purposes of its report, RBC said it was defining Indigenous Peoples as individuals who self-identify as First Nations, Inuit and Metis.

The economics researchers said that the infrastructure gap is contributing to higher unemployment and lower labour participation rates in the Indigenous population, as well as lower wages for Indigenous workers compared to the wider Canadian population.

Investing in closing the infrastructure gap would significantly increase Indigenous production and help increase Canadian GDP, the report said.

“Boosting Indigenous participation rates and employment rates to current non-Indigenous rates would not only boost Indigenous output by up to 17 per cent, but would add half a percent to the productive potential of the Canadian economy annually,” it said.

LIVING CONDITIONS

Indigenous populations are more likely to live in remote regions, the RBC report said, which is one factor that could be contributing to the wider infrastructure gap.

“In the face of high costs for essentials alongside logistical challenges and poor infrastructure, Indigenous communities face limited access to building materials,” it said.

As a result, one in six Indigenous people live in homes in need of immediate repair, and Indigenous individuals are twice as likely as non-Indigenous Canadians to live in over-crowded housing arrangements, according to the report.

Another barrier that exists for Indigenous people living in remote communities is the lack of reliable access to high-speed internet, which “limits access to educational and economic opportunities present in more connected communities.”

‘PERNICIOUS WAGE GAP’

The report said the infrastructure gap also contributes to a significant wage discrepancy between the Indigenous and non-Indigenous populations in Canada.

“Canada’s Indigenous population is younger and works longer hours than their non-Indigenous counterparts but a pernicious wage gape persists,” it said.

“Working-age Indigenous employees earned 92 cents in average hourly wages for every dollar earned by the non-Indigenous population in 2022.”

The report noted that a lack of education infrastructure plays a significant role in the wage gap, which is more pronounced amongst those with lower education levels.

Currently, it said there is also a gap between the Indigenous and non-Indigenous population when it comes to obtaining post-secondary education, “with the Indigenous population almost three times less likely to hold a university degree.”

BRIDGING THE EMPLOYMENT GAP

The report said that improving educational outcomes for Indigenous Peoples in Canada would also likely improve overall participation in the labour market and reduce a “historically elevated unemployment rate.”

“While Indigenous Peoples make up five per cent of the population, the Indigenous economy accounted for 2.5 per cent of Canadian output ahead of the pandemic,” it said. 

Improved Indigenous participation would also fill a growing need in Canada as demographics continue to shift, the report said, noting that 40 per cent of the population falls under the age of 24, compared to only one-quarter of the non-Indigenous population.

“As the Canadian population ages and labour shortages become more acute, with the right infrastructure in place, Indigenous youth are well-positioned to fill these gaps as demographics shift,” it said.

Source : BNN Bloomberg