The Potential Contribution of Aboriginal Canadians to Labour Force, Employment, Productivity and Output Growth in Canada, 2001-2017

Investing in disadvantaged young people is one of the rare public policies with no equity-efficiency tradeoff. This report estimates the potential benefit for the Canadian economy of increasing the educational attainment level of Aboriginal Canadians. We find that increasing the number of Aboriginals who complete high school is a low-hanging fruit with significant and far-reaching economic and social benefits for Canadians. Not only would it significantly contribute to increase the personal well-being of Aboriginal Canadians, but it would also contribute somewhat to alleviating two of the most pressing challenges facing the Canadian economy: slower labour force growth and lackluster labour productivity growth. In fact, we find that in the best case scenario where by 2017 the educational attainment and the labour market outcomes at a given level of educational attainment of Aboriginal Canadians reach the same level non-Aboriginal Canadians had in 2001, the potential contribution of Aboriginal Canadians is up to an additional cumulative $160 billion (2001 dollars) over the 2001-2017 period. That represents an increase of $21.5 billion (2001 dollars) in 2017 alone. Moreover, the potential contribution of Aboriginal Canadians to the total growth of the labour force between 2001 and 2017 is projected to be up to 7.39 per cent of the total labour force growth, much higher than their projected 3.37 per cent share of the working age population in 2017. Finally, we find that the potential contribution of Aboriginal Canadians to the annual growth rate of labour productivity in Canada is up to 0.037 percentage point.