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The potential increase mentioned previously, however, encompasses more than only an
increase in educational attainment. It also includes the impact of increased employment rates and
increased income for Aboriginal Canadians at a given level of educational attainment. To find
lower-bound and upper-bound estimates of the impact of increasing educational attainment for
Aboriginal Canadians, we compare scenarios for which only the level of educational attainment
is changed. Lower-bound estimates capture the effect of education if the labour market variables
remain at their base case values. The upper-bound estimate captures the benefits of increased
education in a world where labour market outcomes at a given level of educational attainment for
both Aboriginal and non-Aboriginal Canadians are identical by 2017, but separates the effect of
increased education from that of increased labour market outcomes at a given level of
educational attainment.
The report finds that an increase of in the educational attainment of Aboriginal Canadians
by 2017 to the level non-aboriginal Canadians had in 2001 would increase annual average
growth rate of the Canadian GDP by up to 0.036 percentage points, or almost half the total
potential annual effect. The cumulative effect on GDP in Canada over the 2001-2017 period
would be up to $71.1 billion. In 2017, Canadian GDP would be $9.5 billion higher. If only half
the gap was eliminated, the cumulative increase over the 2001-2017 period would be up to $36.5
billion, or an increase of $4.9 billion in 2017 only. Clearly, education is an important factor for
increasing output attributable to the Aboriginal population.
Apart from increased output, there is also a significant potential effect on productivity
growth. The average annual labour productivity growth, estimated at 1.7 per cent over the 2001-
2017 period, would increase by 0.037 percentage points in the best case scenario. Again,
however, this represents the aggregate effect of all the changes in the Aboriginal population. The
isolated effect of increased educational attainment if the gap is completely eliminated would be
an increase of up to 0.016 percentage points.
Conclusion
A few key messages can be taken from this report. First, assuming Aboriginal Canadians
increase their level of educational attainment, their potential contribution to Canada‘s economy,
while small in aggregate terms, is still significant. Second, the key to increasing educational
attainment is to increase the number of Aboriginal Canadians graduating from high school, as
this not only increases the potential economic contribution of these individuals but also creates a
larger pool of potential university graduates. Third, to maximize the potential of Aboriginal
Canadians not only should the educational level of their youth be increased, but also that of their
older people. In this context, programs to provide high school education targeted at all
Aboriginal Canadians without high school education under 35 or even older could be considered.
Fourth, the analysis in this paper ignores the dynamic effect that increased education can have of
the leadership capacity of the Aboriginal community and therefore may underestimate the
contribution of increased education of Aboriginal Canadians to future output and productivity
growth. Better educated Aboriginal Canadians will be more effective leaders and thereby provide
better direction for the economic development of Aboriginal communities.